Tag Archives: bailout

Smooth Moves, Mitt

19 Sunday Feb 2012

Posted by in Election 2012, Politics, Republicans, Romney, Unions

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If Mitt Romney has any questions about why his hopes and dreams of winning the Republican nomination are circling the drain, he need look no further than the nearest mirror. Just the two latest examples; First, he brilliantly chose the week that GM announced record profits to re-iterate his opposition to President Obama’s rescue of GM and Chrysler. Two days ago he upped the ante with a little union bashing and support for making Michigan a right-to-work (for less) state:

“I’ve taken on union bosses before, and I’m happy to take them on again,” he told a crowd at an office furniture warehouse on Feb. 15 in Grand Rapids, Michigan. “I sure won’t give into the UAW. Romney also has been citing unions as a major reason for his opposition to the federal bailouts of General Motors Co. and Chrysler Group LLC — a position he spelled out in a widely publicized Feb. 14 column in the Detroit News.”

Somebody apparently forgot to pass along these two vital pieces of information to Mr. Romney regarding his home state:

“Union membership in the state is on the rise, bucking the national trend. Last year, 18.3 percent of the Michigan workforce was represented by a union, up from 17.3 percent in 2010, according to the U.S. Bureau of Labor Statistics…More than a quarter of Michigan Republican primary participants in 2008 were from households that included a union member, exit polling showed.”

Oops.

“In his current race, he stresses his support for right-to- work legislation that would bar agreements making union membership and payment of dues a job requirement. “We’re to make it a level playing field,” he told a roundtable discussion of self-described Tea Party activists in Monroe, Michigan, yesterday. “We’re going to have right to work” (for less).

Mitt can’t get his own supporters on board for that one:

“[E]ven Rick Snyder, the fiscally conservative Republican governor of Michigan who endorsed Romney yesterday, has made clear he won’t take up right-to-work legislation in the state anytime soon, saying he considers other issues more pressing. Other Romney backers similarly shy away from the issue. “I can’t go there,” said Jack Kirksey, mayor of Livonia, Michigan, when asked about right-to-work legislation.”

Rick Santorum won’t even go there:

“Santorum, whose wins in three states last week made him the main alternative to Romney in the nomination race, is taking a softer line on unions as he casts himself as the Republican candidate best able to appeal to blue-collar Rust Belt voters.

Speaking in Detroit yesterday, the former U.S. senator from Pennsylvania voiced his support for private-sector unions, citing a grandfather who was treasurer of his coal mining union.”

For  reaction to Romney’s Michigan strategery, I turn to noted political analyst, Mr. B. Bunny:

Romney Doubles Down on GM, Chrysler Rescue

15 Wednesday Feb 2012

Posted by in Politics, Romney

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Mitt Romney’s op-ed in yesterday’s Detroit News, doubling down on while at the same time conflicting what he wrote about President Obama’s rescue of GM and Chrysler in November of 2008, pretty much comes down to this: Mitt is upset because union workers got to keep their jobs and health care benefits, the automakers’ “secured creditors” (read big banks) took a bit of a loss, and Mitt’s corporate-raider, Gordon Gecko wannabe buds didn’t get a chance to carve up and liquidate the two automakers (and as the cherry on the sundae put those evil union thugs in the unemployment line) for their own fun and profit.

“Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry. The indisputable good news is that Chrysler and General Motors are still in business. The equally indisputable bad news is that all the defects in President Obama’s management of the American economy are evident in what he did.”

So Obama’s management style was proven defective even though it worked. What the….?

“My view at the time — and I set it out plainly in an op-ed in the New York Times — was that “the American auto industry is vital to our national interest as an employer and as a hub for manufacturing.”

Thus was also Romney’s “view at the time”:

“If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.”

Good call, Mitt. Romney then ventures into very familiar territory: the land of self-contradiction. He says what Chrysler and GM needed at the time was a “managed bankruptcy.” Six paragraphs later he laments the outcome of the…uh…managed bankruptcy:

“By the spring of 2009, instead of the free market doing what it does best, we got a major taste of crony capitalism, Obama-style.

Thus, the outcome of the managed bankruptcy proceedings was dictated by the terms of the bailout. Chrysler’s “secured creditors,” who in the normal course of affairs should have been first in line for compensation, were given short shrift, while at the same time, the UAWs’ union-boss-controlled trust fund received a 55 percent stake in the firm.”

“Free market doing what it does best” as defined by the Bain vulture capitalist who like to fire people. And never mind that in the 2008 piece Romney wrote:

“But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.”

The largest of those secured creditors at the time? The ones who “were given short shrift?” JP Morgan Chase. They took a $2 billion loss on loans to Chrysler. Well boo frickin’ hoo for Jamie Dimon and the gang at Chase, who pocketed a cool $68.6 billion in bailout money from the feds.

And about that “union-boss controlled trust fund”:

“He’s complaining, of course, that VEBA (the trust fund run by professionals that allowed the auto companies to spin off contractual obligations–retiree healthcare–to the unions) got a stake in Chrysler while Chrysler’s secured creditors took a haircut.

So, in part, he’s basically complaining that the bailout preserved the healthcare a bunch of 55+ year old blue collar workers were promised. He’s pissed they got to keep their healthcare.”

…Still, the UAW retirees who still have healthcare today instead of Jamie Dimon having another yacht probably don’t feel the same way as Mitt does.”

I just can’t figure out why Romney’s once upon a time commanding lead over Rick Santorum in Michigan is going, going, gone. Pay attention, Mittster. That sound you hear is the fat lady clearing her throat.

White House Moving to Wall Street

04 Tuesday Jan 2011

Posted by in economy, Goldman Sachs, Obama, Obama administration, Politics, special interests, Wall Street

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Breaking news: In order to cut down on travel time through the revolving door for President Obama’s outgoing and incoming team of  advisers, the White House is moving from 1600 Pennsylvania Avenue. Here’s the new location:


Might as well be:

“President Barack Obama is considering naming William Daley, a JPMorgan Chase & Co. executive and former U.S. Commerce secretary, to a high-level administration post, possibly White House chief of staff, people familiar with the matter said.

[…]

After serving as president of SBC Communications for more than two years, he joined New York-based JPMorgan, the second- biggest U.S. bank by assets, in 2004, serving as Midwest chairman and the bank’s head of corporate responsibility.”

Corporate responsibility. Like a 25% increase in outsourcing to India in 2009. Like using the $25 billion in bailout money that was intended to loosen up lending to become “more active on the acquisition side.” That kind of “corporate responsibility?”

Oxy (clap clap clap) moron (clap clap clap). Oxy (clap clap clap) moron (clap clap clap).

Why Daley?

“The administration is seeking to repair relations with the business community after coming under fire from industry groups, including the U.S. Chamber of Commerce. The nation’s biggest business lobbying group opposed Obama’s health-care and financial-regulatory overhauls and committed $75 million to political ads in the midterm congressional elections, mainly directed against Democrats.

…Obama is generating more optimism among corporate executives after a series of actions and overtures, including a deal to extend the Bush-era tax cuts, efforts to boost exports such as a U.S.-South Korea free-trade agreement, and a loosening of controls on some technology sales.”

Well isn’t that just wonderful. Makes me feel all warm inside.

Then there’s the search for someone to replace Larry Summers as head of the National Economic Council (NEC):

“…it seems that the shortlist to replace Larry Summers at the NEC has been whittled down to three men — Gene Sperling, Roger Altman, and Richard Levin…The…notable characteristic of the three is that they’re all multi-millionaires with close ties to Wall Street. None more than Altman, of course, who has his own bank. But Levin is on the board of American Express, which paid him $181,362 in 2009, and where he has shares and “share equivalent units” worth $539,000.”

That leaves Gene Sperling, currently one of Geithner’s underlings, and the person who is reportedly the leading candidate for the job:

“Goldman Sachs paid Sperling $887,727 for advice on its charitable giving. That made the bank his highest-paying employer. Even Geithner’s chief of staff Patterson, who was a full-time lobbyist at the firm, did not make as much as Sperling did on a part-time basis. Patterson reported earning $637,492 from Goldman Sachs [in 2008].”

Ezra Klein:

“It is very hard to believe that Goldman Sachs wasn’t attempting to buy influence with a politically savvy economist who had good relations — and would later go to work for — the incoming Democratic administration.”

More on Sperling:

“…he has played key roles crafting the administration’s economic policies, most recently in forging Obama’s compromise with Republican leaders to extend the 2001 and 2003 income tax cuts.”

Just peachy.

Foreclosure Fraud Just the Tip of the Iceberg

12 Tuesday Oct 2010

Posted by in bailout, Congress, economy, Financial Crisis, financial reform, financial regulation, Foreclosures, Justice Department, Obama administration, special interests, too big to fail, Wall Street

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Dylan Ratigan, Ohio Secretary of State Jennifer Brunner, and Karl Denninger of The Market Ticker unravel foreclosure fraud:

To reiterate, the fraud in foreclosures that we’re seeing now is just the tip of the iceberg. The purpose is to try and cover up, and cover for, the fraud in the mortgage process all the way back to the origination of the mortgages, which were then packaged into securities and fraudulently sold to investors as AAA quality, a rating gained by paying off the ratings agencies. As our parents always told us, one lie requires another one to cover up the first one, which requires another lie to cover up the second one, and so on, and so on, and…….

In my opinion, that’s why the Senate tried to sneak through the legislation that President Obama vetoed—it would have given the big banks protection from liability in this entire mess. As an aside–again just my opinion– but the only reason the president vetoed the bill was because of the attention it received and the light that was shone on its alleged “unintended consequences” (and if you’ll buy that….) My cynical nature when it comes to politicians tells me that “sending the bill back for modifications” translates into, ‘We’ll try again when the heat’s off.’

It’s also why, according to David Axelrod, the hope in the White House is that “this moves rapidly and that this gets unwound very, very quickly.” And why the White House opposes a national moratorium on foreclosures. A moratorium would give investigators and especially some 40 states’ attorneys general time to delve back into fraud and deceit at every level of the process

As Mr. Denninger explained, the only remedy is to force the big banks to buy back the toxic securities that they sold to investors under false pretenses. They can’t do that, which means Chase, BofA, et al, are insolvent. Actually, they’re insolvent now but for the phony profits from peddling this garbage to unsuspecting investors.

There is a provision in the financial reform legislation for resolution authority, that is breaking up large financial institutions that pose a “systemic risk” to the entire economy. Will Congress use it or will they do what they have done in the past and bail out their Wall Street cronies and contributors—again. If Republicans take control of Congress will they hold true to their campaign rhetoric of “no more bailouts” or will they dance to the tune of their big donors on Wall Street?

We may soon find out.

Who’s In Charge Here, Washington or Wall Street?

06 Monday Apr 2009

Posted by in Politics

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There are both encouraging and discouraging signs today in the battle over who’s in charge, Wall Street or Washington. First the good news. Finally, somebody in D.C. gets it.

“Elizabeth Warren, chief watchdog of America’s $700 billion bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration’s approach to saving the financial system from collapse.

She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173 billion in bailout money, and banking giant Citigroup, which has had $45 billion in funds and more than $316 billion of loan guarantees.”

With one simple sentence Warren summed up what, in my opinion, should be the consensus among those in the Obama administration.

“The very notion that anyone would infuse money into a financially troubled entity without demanding changes in management is preposterous.”

That’s the good news, now for the bad. There are some “administration officials”( I smell Larry Summers) who are busy looking for loopholes in congressional restrictions placed on financial institutions who receive bailout money.

“The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefitting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.”

“Persuading”, aka bribing.

“The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.”

“Special entities” acting as “middlemen”, aka money launderers.

Speaking of limiting executive pay, Rep. Alan Grayson’s Pay for Performance Act, which does exactly that, passed the House 247-171, with 10 Republicans voting yes.

But there’s rain on that parade, too. Rep. Melissa Bean of Illinois, one of the so-called Blue Dog Democrats, sponsored an amendment which would “allow institutions that enter into a payment schedule with Treasury on terms set by Treasury to no longer be subject to the bonus and compensation restrictions created by the Act.“

It passed 228-198 with the support of 63 Democrats, most of whom also voted for Grayson’s bill. Go figure.