The Federal Government Secretly Bailed out General Electric

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Did you know that GE was secretly bailed out along with everyone else? GE is the parent company of NBC and GE’s CEO, Jeff Immelt, sits on Obama’s board of economic advisors? Hmmm? This article is from a fellow blogger on WordPress Scotty Starnes’s Blog , give him a visit, his blog is loaded with some good info as well.

 

FED SECRETLY BAILED OUT GE — GE NEWS OUTLETS FAILED TO REVEAL IN FED COVERAGE

Now why wouldn’t MSNBC report that their parent company, GE, received a taxpayer-funded bailout? Does anyone else see a conflict of interest since GE’s CEO, Jeff Immelt, sits on Obama’s board of economic advisors? I’m sure its all a coinky-dink that MSNBC pushes Obama’s agenda on its network.

From the Washington Post:

The financial crisis stretched even farther across the economy than many had realized, as new disclosures show the Federal Reserve rushed trillions of dollars in emergency aid not just to Wall Street but also to motorcycle makers, telecom firms and foreign-owned banks in 2008 and 2009.

The Fed’s efforts to prop up the financial sector reached across a broad spectrum of the economy, benefiting stalwarts of American industry including General Electric and Caterpillar and household-name companies such as Verizon, Harley-Davidson and Toyota. The central bank’s aid programs also supported U.S. subsidiaries of banks based in East Asia, Europe and Canada while rescuing money-market mutual funds held by millions of Americans.

What did the taxpayers receive? Nothing but the bill for our government to bail out everyone but us.

The biggest users of the Fed lending programs were some of the world’s largest banks, including Citigroup, Bank of America, Goldman Sachs, Swiss-based UBS and Britain’s Barclays, according to more than 21,000 loan records released Wednesday under new financial regulatory legislation.

The data reveal banks turning to the Fed for help almost daily in the fall of 2008 as the central bank lowered lending standards and extended relief to all kinds of institutions it had never assisted before.

Fed officials emphasize that their actions were meant to stabilize a financial system that was on the verge of collapse in late 2008. They note that the actions worked to prevent a complete financial meltdown and that none of the special lending programs has lost money. (Some have recorded healthy profits for taxpayers.)

If this is true, where is our check?

But the extent of the lending to major banks – and the generous terms of some of those deals – heighten the political peril for a central bank that is already under the gun for a wide range of actions, including a recent decision to try to stimulate the economy by buying $600 billion in U.S. bonds.

The Federal Reserve is buying debt even after Fed Chair Ben Bernanke testified before Congress that this wouldn’t happen. What happens when you testify and lie? Ask Bill Clinton.

“The American people are finally learning the incredible and jaw-dropping details of the Fed’s multitrillion-dollar bailout of Wall Street and corporate America,” said Sen. Bernard Sanders (I-Vt.), a longtime Fed critic whose provision in the Wall Street regulatory overhaul required the new disclosures. “Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

The Fed launched emergency programs totaling $3.3 trillion in aid, a figure reached by adding up the peak amount of lending in each program.

Add another $2.3 trillion to that figure because the Federal Reserve’s “quantitative easing” scheme.

Continue reading>>>

Barack Obama has awakened a sleeping nation

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I got this in an email today and it is authentic. It’s from Gary Hubbell , who is a hunter, rancher, and former hunting and fly-fishing guide. Gary works as a Colorado ranch real estate broker. He can be reached through his website, aspenranchrealestate.com

Barack Obama has awakened a sleeping nation

Gary Hubbell
Aspen Times Weekly          February 2010

cid:00a001caca14$9121f980$180fa8c0@Jim

Barack Obama is the best thing that has happened to America in the last 100 years. Truly, he is the savior of America ‘s future. He is the best thing ever.

Despite the fact that he has some of the lowest approval ratings among recent presidents, history will see Barack Obama as the source of America ‘s resurrection. Barack Obama has plunged the country into levels of debt that we could not have previously imagined; his efforts to nationalize health care have been met with fierce resistance nationwide; TARP bailouts and stimulus spending have shown little positive effect on the national economy; unemployment is unacceptably high and looks to remain that way for most of a decade; legacy entitlement programs have ballooned to unsustainable levels, and there is a seething anger in the populace.

That’s why Barack Obama is such a good thing for America .

Obama is the symbol of a creeping liberalism that has infected our society like a cancer for the last 100 years. Just as Hitler is the face of fascism, Obama will go down in history as the face of unchecked liberalism. The cancer metastasized to the point where it could no longer be ignored.

Average Americans who have quietly gone about their lives, earning a paycheck, contributing to their favorite charities, going to high school football games on Friday night, spending their weekends at the beach or on hunting trips – they’ve gotten off the fence. They’ve woken up. There is a level of political activism in this country that we haven’t seen since the American Revolution, and Barack Obama has been the catalyst that has sparked a restructuring of the American political and social consciousness.

Think of the crap we’ve slowly learned to tolerate over the past 50 years as liberalism sought to re-structure the America that was the symbol of freedom and liberty to all the people of the world. Immigration laws were ignored on the basis of compassion. Welfare policies encouraged irresponsibility, the fracturing of families, and a cycle of generations of dependency. Debt was regarded as a tonic to lubricate the economy. Our children left school having been taught that they are exceptional and special, while great numbers of them cannot perform basic functions of mathematics and literacy. Legislators decided that people could not be trusted to defend their own homes, and stripped citizens of their rights to own firearms. Productive members of society have been penalized with a heavy burden of taxes in order to support legions of do-nothings who loll around, reveling in their addictions, obesity, indolence, ignorance and “disabilities.” Criminals have been arrested and re-arrested, coddled and set free to pillage the citizenry yet again. Lawyers routinely extort fortunes from doctors, contractors and business people with dubious torts.

We slowly learned to tolerate these outrages, shaking our heads in disbelief, and we went on with our lives.

But Barack Obama has ripped the lid off a seething cauldron of dissatisfaction and unrest.

A former Communist is given a paid government position in the White House as an advisor to the president. Auto companies are taken over by the government, and the auto workers’ union – whose contracts are completely insupportable in any economic sense – is rewarded with a stake in the company. Government bails out Wall Street investment bankers and insurance companies, who pay their executives outrageous bonuses as thanks for the public support. Terrorists are read their Miranda rights and given free lawyers. And, despite overwhelming public disapproval, Barack Obama has pushed forward with a health care plan that would re-structure one-sixth of the American economy.

Literally millions of Americans have had enough. They’re organizing, they’re studying the Constitution and the Federalist Papers, they’re reading history and case law, they’re showing up at rallies and meetings, and a slew of conservative candidates are throwing their hats into the ring. Is there a revolution brewing? Yes, in the sense that there is a keen awareness that our priorities and sensibilities must be radically re-structured. Will it be a violent revolution? No. It will be done through the interpretation of the original document that has guided us for 220 “FANTASTIC’years – the Constitution. Just as the pendulum swung to embrace political correctness and liberalism, there will be a backlash, a complete repudiation of a hundred years of nonsense. A hundred years from now, history will perceive the year 2010 as the time when America got back on the right track. And for that, we can thank Barack Hussein Obama.

Aspen Times


Obama Bank “Bank Tax” Is Destructive, Hypocritical and Unconstitutional

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Well here we go again with the federal government doing whatever they want to do and in the middle of everything changing the rules. On top of all that with the proposed “bank tax” they are violating the Constitution and favoring some while not favoring others. I thought the 14th says we’re to have equal protection?

Obama Bank “Bank Tax” “Financial Crisis Responsibility Fee” Is Destructive, Hypocritical and Likely  Unconstitutional

The so-called “Bank Tax” ~Financial Crisis Responsibility Fee is a tax in search of a target. Today, the President declared, “We want our money back.” Yet his proposed tax on financial institutions with assets of $50 billion or more would be levied on the banks that paid back the bailout money – with interest – and on institutions that may not have even taken TARP funds, while most likely exempting Fannie, Freddie and the car companies that still owe billions upon billions to taxpayers.

The hypocrisy doesn’t end there. At a time when President Obama and his administration have been cajoling banks to make more loans, this tax would directly hit that ability, particularly if it’s levied – as the President suggested today – on the level of debt an institution has. This would be contractionary and put a big crimp on economic expansion. And as a multitude of economic studies have shown, taxes on corporation are nearly always passed on to consumers. These taxes would likely hit bank depositors in the form of new fees and lower interest payments.

CEI stood against the bailouts and thought the government should have let poorly managed firms fail. Some of the TARP recipients, like BB&T Corp., hadn’t engaged in the foolish mortgage and credit practices, yet were pressured by the government to take the bailout money so the “bad banks” wouldn’t be stigmatized by taking TARP money. Regardless, being a recipient of a government subsidy should not allow the government to control the firm’s profits and compensation any more than a stadium subsidy should allow the government to cap the wages of superstar athletes.

Finally, by taxing some businesses and not others, and casting the tax as a penalty for past misdeeds, the Obama administration has raised constitutional issues of whether this tax runs afoul of the equal protection clause and is a “bill of attainder” that singles out certain people for punishment. A New York federal court recently ruled that Congress’s singling out of the group ACORN for defunding because of past actions was a punishment that could only be levied by a court, violating the bill of attainder clause. Under this expansive interpretation, this tax too could be considered punishment without trial and also a bill of attainder.

OpenMarket.org

Supreme Court Screws Chrysler Bondholders

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Why were the “secured bondholders” disregarded by the Supreme Court? Legally binding contracts were ignored! Are we not a country that abides by the “rule of law” anymore? As unbelievable as it is, it’s beginning to look like the White House strong armed this deal against the secured bondholders disregarding contract law.

White House puts UAW ahead of property rights

Tom Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.

This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.

After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.

The White House denied that it strong-armed Perella Weinberg. The firm issued a statement saying it decided to accept the settlement, but it pointedly did not deny that it had been threatened by the White House. Which is to say, the threat worked.

WashingtonExaminer.com

Supreme Court Screws Chrysler Bondholders

The pension fund of the state of Indiana and a few other brave souls decided to defy the United States government and challenge the White House’s remarkable intervention and engineering of the Chrysler bankruptcy filing.

Chrysler went bankrupt for several reasons, but the bottom line is that they had accumulated massive amounts of debt which they could not possibly repay.  The process of going through bankruptcy can be complicated for a large company, but there is a method to the madness.  In general, the assets are sold off to the highest bidders and the money recovered is then distributed to the creditors.

A company raises capital by selling debt.  A common way to sell debt is by issuing bonds.  The purchasers of the debt are the bondholders.

Not all creditors are created equal.  There are a long line of people trying to get their money back, and the bankruptcy law specifically stipulates who has the highest priority.  At the front of the line are the “secured” bondholders.   At the back of the line are the holders of common shares.  Somewhere in the middle are preferred share holders.

The White House intefered in Chrysler’s bankruptcy.  Legally binding contracts were ignored.  The secured creditors were given the message,

“Sorry but this is how it is and we really don’t care what the law is.  We are the law and we can do whatever we want.”

Most of the secured creditors caved in to the pressure from the White House, but a few, such as the Indiana State Pension Fund and the Indiana State Teacher’s Retirement Fund decided to assert their legal rights and took it all the way to the Supreme Court.

At first it seemed the Supreme Court would do the right thing when they issued a temporary a “stay” to the government’s bankruptcy filing.  Then they ruled that the bankruptcy filing could go forward.

Did the Supreme Court cave in from White pressure?  Whatever happened to our system of “checks and balances”?  The Supreme Court had the opportunity to block the inapropriate abuse of power by the president, but they did not.

Why is this story of presidential power run amuck not blaring from the front covers of the New York Times and Wall St. Journal?

Why is this story not on the cover of Open Salon (Hint, Hint).

open.Salon.com

Un-Constitutional Takeover of GM and Chrysler

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Un-Constitutional Takeover of GM and Chrysler

When will the people of America wake up and make a stand to stop what Barack Hussein Obama is doing to our country? Look at what is happening. Just in the short time he has been in office he has transformed  what still was America (before he was elected) into a country whose government owns major businesses and industries! This is Socialism.(Fascist?) This is the beginnings of another Venezuela. Like he said in LA the other day “You ain’t seen nothin’ yet”.

Remember way back? – it all started with the government wanting to ban “transfats” from the menus of restaurants. And everyone thought it was so cute how the government had a concern about your health – but little did the people of America know that this was the beginnings of the massive Progressive movement (worse than the 1930s) that wants to control every aspect of your life – that has taken over Washington and that is lead by Obama.

Why did our government give $100 Billion to GM? For what reason? They are now bankrupt and the money is long gone. Is anyone asking when it will be paid back? Is the media asking? When will the media confront Obama for this insanity, corruption and hypocrisy?Where is the outrage from the taxpayers? Only one in five agree to the bailout – where are the other four out of five? Where is the outrage? We the taxpayers must wake up!

Where in the Constitution does it say that the Federal government can takeover a private American company? (No where!)  The corruption that is occurring is happening right before your eyes and no one is doing anything to stop it. At the absolute least this should have been brought before Congress for a discussion and for the American taxpayer to have their say in what was happening. Washington is now running like there is no tomorrow – spending money that doesn’t exist and seemingly only living for today without any concern for all the future generations that shall come after us both monetarily and with regards to policy. (Borrowing 50 cents on the dollar spent)

If you think the government can effectively make a car and that these morons in government can run a profitable car company with a viable in demand product - I have some ocean front property to sell you in Las Vegas. The Obama administration is actually picking and choosing which car dealerships it shall close – based on whether the owner is Republican or Democrat! (as is demostrated in part 2 of the Glenn Beck video) This is massive corruption. As the Obama group closes these thousands of dealerships – they are also costing over 100,000 jobs - (I thought he was going to create 600,000 jobs) this will greatly cripple the local communities involved and merely puts more people on the government dole – close up these contributing Republicans, put them out of business – put them on the dole and empower your supporters – quite a plan – and very corrupt.

Where are the people talking about the blatant abuse of the Constitution that is occurring? Where are the champions of the Constitution? Shouldn’t that be the real focus here? Do you think the government will ever get out of the auto business now that it has sunk its teeth into it? How can this be reversed? Does it take waiting three and a half more years before we can rise up and get this maniac out of office? Or does it take someone to rise up and actually prove that Obama wasn’t even born in America? Look at the people he is appointing to his different cabinets and to the Supreme Court? Does this seem like an America loving person to you?

Somehow Obama has weaseled his way into our governmental system and we as taxpayers have a duty and obligation to stop the progress of his agenda. We must stop his appointing of so called “czars” who seem to have impunity to Congress and who are empowered to make decisions without the discussion and consent of our Congress.

This is insanity – this is Marxism – this is Socialism – this is NOT America.

he American “sheeple” are just letting Obama and the 1000 other politicians in Washington just rob us blind and run over us all. We must rise up and voice our opinion AGAINST Obama and his march into a nanny state – right into Socialism. There are 138 Million taxpayers and only 1000 politicians – are we going to let them make these disastrous economic decisions without our consent? These are decisions that shall negatively effect our lives for as long as we are alive! And more so the lives of our children!

I do not want to be part of this – do you? If you don’t then please don’t be part of the Obama sheeple – stand apart – stand for the Constitution – sign in as an American for the Constitution and make your voice heard today - somehow and somewhere - if you don’t – if we the taxpayers don’t then this government will continue its take over of every single right you now have that you thought could never – ever – be taken away. Make you stand today!

www.AmericansForTheConstitution.com

There’s a reason Obama refuses to accept repayment of TARP money.

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This article says exactly what I’ve been saying…..the federal government is taking over more & more of the economy and businesses, then dictating to them what to do, i.e. fire GM’s CEO.

Obama Wants to Control the Banks

There’s a reason he refuses to accept repayment of TARP money.

by Stuart Varney

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn’t much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street’s black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell ‘em what to do. Control. Direct. Command.


It is not for nothing that rage has been turned on those wicked financiers. The banks are at the core of the administration’s thrust: By managing the money, government can steer the whole economy even more firmly down the left fork in the road.

If the banks are forced to keep TARP cash — which was often forced on them in the first place — the Obama team can work its will on the financial system to unprecedented degree. That’s what’s happening right now.

Here’s a true story first reported by my Fox News colleague Andrew Napolitano (with the names and some details obscured to prevent retaliation). Under the Bush team a prominent and profitable bank, under threat of a damaging public audit, was forced to accept less than $1 billion of TARP money. The government insisted on buying a new class of preferred stock which gave it a tiny, minority position. The money flowed to the bank. Arguably, back then, the Bush administration was acting for purely economic reasons. It wanted to recapitalize the banks to halt a financial panic.

Fast forward to today, and that same bank is begging to give the money back. The chairman offers to write a check, now, with interest. He’s been sitting on the cash for months and has felt the dead hand of government threatening to run his business and dictate pay scales. He sees the writing on the wall and he wants out. But the Obama team says no, since unlike the smaller banks that gave their TARP money back, this bank is far more prominent. The bank has also been threatened with “adverse” consequences if its chairman persists. That’s politics talking, not economics.

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.

Which brings me to the Pay for Performance Act, just passed by the House. This is an outstanding example of class warfare. I’m an Englishman. We invented class warfare, and I know it when I see it. This legislation allows the administration to dictate pay for anyone working in any company that takes a dime of TARP money. This is a whip with which to thrash the unpopular bankers, a tool to advance the Obama administration’s goal of controlling the financial system.

After 35 years in America, I never thought I would see this. I still can’t quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.

Mr. Varney is a host on the Fox Business Channel

Wallstreet Journal.com

Obama Forcing Management Decisions on Corporate America

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When government no longer represents the interests of the people, but instead represents the interests of corporations, it is a Fascist state. Despite what the American Supreme Court says, Corporations are merely legal agreements that are formed to generate profit, not people. When corporations infiltrate and dictate the agenda of a government, then that country can be said to be a fascist state. Communist, democratic, dictatorships, and socialist countries can all fall into the trap of fascism. And by “trap” I  mean that when a country becomes fascist, it is usually the beginning of the end of that country.

So what is fascism ? Lawrence Britt, writing in Free Inquiry magazine, Volume 23, Number 2, summarizes fourteen common traits of a fascist society.

1. Powerful and Continuing Nationalism

2. Disdain for the Recognition of Human Rights

3. Identification of Enemies/Scapegoats as a Unifying Cause

4. Supremacy of the Military

5. Rampant Sexism

6. Controlled Mass Media

7. Obsession with National Security

8. Religion and Government are Intertwined

9. Corporate Power is Protected

10. Labor Power is Suppressed

11. Disdain for Intellectuals and the Arts

12. Obsession with Crime and Punishment

13. Rampant Cronyism and Corruption

14. Fraudulent Elections

Obama Forcing Management Decisions on Corporate America

Monday, March 30, 2009
By Philip Elliott, Associated Press


In this June 26, 2008 photo, then-Democratic presidential candidate Barack Obama appears with General Motors Chairman Rick Wagoner during an economic discussion in Pittsburgh. (AP Photo/Keith Srakocic, File)

Washington (AP) – Neither General Motors nor Chrysler submitted acceptable plans to receive more federal bailout money, the Obama administration said as it set the stage for a crisis in Detroit that would dramatically reshape the nation’s auto industry.

President Barack Obama raised the possibility that two of Detroit’s teetering carmakers could be forced into bankruptcy today, blasting General Motors and Chrysler for failed leadership, unrealistic business plans and a slow rate of reform.

The White House pushed out GM’s chairman and directed Chrysler to move quickly to forge a partnership with Fiat if it expects to receive additional government assistance

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever.

In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Frustrated administration officials said Chrysler cannot function as an independent company under its current plan. They have given Chrysler a 30-day window to complete a proposed partnership with Italian automaker Fiat SpA, and will offer up to $6 billion to the companies if they can negotiate a deal before time runs out.

If a Chrysler-Fiat union cannot be completed, Washington plans to walk away, leaving Chrysler destined for a complete sell-off. No other money is available.

Shawn Morgan, a Chrysler spokeswoman, said the company wants to work with the Treasury Department and Obama’s auto task force but declined to comment on the White House’s plans.

“With the administration’s announcement on the restructuring of the automotive industry imminent, it would be inappropriate to comment on speculation,” Morgan said in a statement early Monday.

For GM, the administration offered 60 days of operating money to restructure. A frantic top-to-bottom effort began Sunday after chairman and CEO Rick Wagoner stepped aside under pressure from the White House.

In a major management shake-up, new directors will make up the majority of GM’s board, the automaker said.

“The board has recognized for some time that the company’s restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience,” Kresa said in a written statement.

Officials said GM had failed to make good on promises made in exchange for $13.4 billion in government loans, although there are currently no plans to call in those loans.

Administration officials still believe GM’s chances are good, given its global brand and its research potential. Officials say they are confident GM can put together a plan that will keep production lines moving in the coming years. They planned to send a team to Detroit to help with that restructuring.

Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years.

In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more. The White House balked and instead started a countdown clock.

Administration officials acknowledged the short turnaround time was harsh; one described it as a nanosecond in a business cycle.

Two people familiar with the plan said officials will demand further sacrifices from the automakers and bankruptcy would still be possible if the automakers failed to restructure. Those officials spoke on condition of anonymity because they were not authorized to make details public.

GM and Chrysler, which employ about 140,000 workers in the U.S., faced a Tuesday deadline to submit completed restructuring plans, but neither company was expected to finish its work. The White House’s plan renders them, as well as a potential discussion about the companies’ borrowed money, moot.

GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

An exasperated administration official noted that the companies had not done enough to reduce debt; in some cases, it actually increased during this restructuring and review process.

Under the terms of a loan agreement reached during the last administration, GM and Chrysler are pushing the United Auto Workers to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care. They also want labor costs from the union to be competitive with Japanese automakers with U.S. operations.

Little progress has been made between the companies and the union.

Entire article at CNS news.com

U.S. May Give Car Czar or Treasury Secretary Power to Force Bankruptcies

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Well here we go after this has been batted around and looked like the Big 3 weren’t going to get any help. When you knew in reality they would….it’s just politics waiting for the Big 3 to give in to more government control and strings attached to the bailout. In this case a “Car Czar” whoever heard of such a thing. This won’t be popular for me to say, but our government getting involved in the banking, insurance and now auto industry with the power to make or break a business through forcing bankruptcy is turning our economy into facist economy whether you want to admit it or not.

As you read this remember…..GM has a bigger presence outside the U.S. than in it, employs more people in other countries than here, and actually makes money selling cars everywhere from Sao Paulo to Shanghai. Its U.S. revenue has sunk 24% in the last three full years, but in the rest of the world, GM can boast a 28% increase.” <click to read entire article)

U.S. May Give Car Czar Power to Force Bankruptcies

The U.S. Treasury may adopt a plan that would let a car czar or the Treasury secretary force General Motors Corp. and Chrysler LLC into bankruptcy if the automakers don’t show they can survive without government aid, a U.S. senator said.

GM and Chrysler would be required to submit viability plans by March 31 or lose any further U.S. support, Carl Levin, a Democrat from Michigan, told reporters in Detroit yesterday. The Treasury plan would resemble a measure passed by the U.S. House last week that was rejected by the Senate.

“I expect that the terms would be similar to the ones that were in the House bill,” Levin said. “The power rests in the hands of either the czar or the Secretary of the Treasury to force bankruptcy by March 31.”

The administration isn’t likely to reach a decision on aid until later this week, with tomorrow being the earliest, a government official said on condition of anonymity. GM and Chrysler are seeking $14 billion to keep operating through the first quarter. Without an infusion of cash, the largest U.S. automaker and No. 3 Chrysler may be only weeks from insolvency.

White House spokesman Tony Fratto declined to speculate on when a plan might be finished, though he said yesterday on Bloomberg Television that the administration wants to make sure taxpayers will get their money back.

‘Rigorous Oversight’

“Of course there will be conditions to any taxpayer financing,” Fratto said. There will be rigorous oversight to make sure that these companies are doing what they promised to do, and we want to make sure that everyone is making the concessions that they’re going to have to commit to make.” ( meanwhile the Federal Reserve and Treasury Secretary Paulson changed what they said they’d do after the banker bailout was passed and the Federal Reserve is declining Bloomberg’s Freedom of Information Act request to force the Federal Reserve to show where the $2 trillion of taxpayer money went.)

Levin said the Bush administration understands the urgency of the automakers’ situation. “It’s a matter of weeks before they absolutely must have the funds in hand,” he said.

Under the approach the administration is likely to use, Treasury Secretary Henry Paulson and his successor would “in effect” be the car czar because the Treasury Department would oversee the aid, Levin said.

GM rose 7 cents, or 1.7 percent, to $4.15 at 9:51 a.m. in New York Stock Exchange composite trading. The shares have tumbled 83 percent this year.

Paulson said yesterday the Bush administration was moving with “deliberative speed” in considering possible financing for U.S. automakers.

“We’ve got some time,” Paulson said in an interview with Fox News and Fox Business Network, according to a transcript.

‘Very Critical’

“The terms would be very critical, and we would have to assure ourselves that this was a step on the path to long-term viability,” he said. It was too soon to speculate on what terms might be required of the companies or unions if the government provided aid, Paulson said.

The likeliest U.S. aid package will be loans and a so- called prepackaged bankruptcy to get the automakers through to 2009, Moody’s Investors Service said in a note today. There’s only a one-in-four probability the U.S. will bail out the automakers with no bankruptcy, analyst J. Bruce Clark said.

The Bush administration agreed Dec. 12 to consider options, including use of the Troubled Asset Relief Program, after Senate Republicans refused to take up the plan passed by the House on Dec. 10. Senate Republicans sought more specific automaker conditions, such as pay in line with foreign manufacturers’ operations in the U.S.

GM spokesman Greg Martin declined to comment on the possible terms of a bailout. “I will say that as other options for aid are considered, our commitment to an aggressive restructuring plan remains unchanged,” Martin said in an e- mailed statement.

Levin said he believes there is $15 billion left in the TARP program to aid automakers’ operations.

‘Tipping Point’

South Carolina Governor Mark Sanford, a Republican, asked Bush in a letter yesterday not to consider the bank bailout fund for automakers because it would open the “floodgates” for other troubled industries.

“We are at a tipping point in moving from a market-based economy to a politically based economy,” Sanford said.

House Speaker Nancy Pelosi, a California Democrat, said at a news conference yesterday she expects the White House to approve the money for automakers and that something will have to happen “imminently.”

“All the signals coming from the White House are that they know that bankruptcy is not an option, and that TARP funds are the only recourse that they have,” Pelosi said.

Global Plight

The automakers’ global plight was illustrated today when European car sales recorded the biggest monthly decline since 1999. GM’s deliveries on the continent fell 39 percent in November and Chrysler vehicle sales plunged 56 percent, the European Automobile Manufacturers’ Association said. Overall deliveries dropped 26 percent.

Read the entire article at Bloomberg.com

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