General Motors Is Headed For Bankruptcy — Again

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Oh, say it isn’t so.

President Obama is proud of his bailout of General Motors.  That’s good, because, if he wins a second term, he is probably going to have to bail GM out again.  The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling.  It would be too embarrassing politically.  Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

Continue reading at Forbes

IRS Turns TARP Into the Theft that Keeps on Thieving

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Here’s an interesting and frustrating read at the same time…….One must ask: Why do these government leaders believe it would be bad for the government to extend tax cuts for individuals yet good for the government to extend tax cuts to businesses it owns?…….Ordinarily companies that undergo major restructuring have restrictions placed on their tax benefits. But the IRS has ruled companies that received bailout money under the Troubled Asset Relief Program will not face those restrictions.”

IRS Turns TARP Into the Theft that Keeps on Thieving

From Steve Stanek, a research fellow for budget and tax issues at The Heartland Institute:

How ironic that President Obama and other leading Democrats oppose extending tax cuts for “the wealthy” even as the United States government announces tens of billions of dollars of tax breaks for the wealthiest of all: itself.

News comes today of a decision by the Internal Revenue Service to grant $45 billion of tax breaks to General Motors, which happens to be majority owned by the United States government by virtue of the government’s taxpayer bailouts. Other companies that received billions of taxpayer bailout dollars also will receive favorable tax treatment, raising the final tax break total.

One must ask: Why do these government leaders believe it would be bad for the government to extend tax cuts for individuals yet good for the government to extend tax cuts to businesses it owns?

The answer comes from the Wall Street Journal’s article on this obscenity against taxpayers and assault on free enterprise and fair competition: “The government’s rationale, said people familiar with the situation, is that the profit-shielding tax credit makes the bailed-out companies more attractive to investors.”

Of course. Later this month General Motors will be selling shares of stock, and the company wants a high price. So does the government, which owns more than 60 percent of General Motors and hopes to recoup some of its “investment” by selling its shares at a high price. Same goes for the other bailed-out companies that also will be allowed to shed future tax liabilities.

Neither GM nor Ford officials would respond to requests for comment. Ford, of course, is an American automaker that took no taxpayer bailout money. Ford also did not follow GM into bankruptcy, which means Ford is meeting its financial obligations. GM has walked away from billions of dollars of financial obligations. And for this GM is rewarded by the IRS.

Ordinarily companies that undergo major restructuring have restrictions placed on their tax benefits. But the IRS has ruled companies that received bailout money under the Troubled Asset Relief Program will not face those restrictions.

GM received $60 billion in taxpayer largesse. Now it gets to walk away from $45 billion in tax liabilities. So we are piling a bailout on top of the earlier bailout.

TARP: the theft that keeps on thieving.

Some What Reasonable

Barack Obama has awakened a sleeping nation

3 Comments

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


James Carville pollster shows Democrats stumbling even further with electorate

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Well even some of the Democratic pollsters are seeing the light!

James Carville’s Democracy Corps commissioned a poll at the end of July to test the mood of the electorate, and Brian Faughnan of Liberty Central gleefully discovers that voters are furious at Democrats. Despite the “Recovery Summer” sales pitch by the White House, voters are growing increasingly pessimistic about the economy, and increasingly inclined to deliver a protest vote in November. Brian points to a few of the charts included in the analysis from Citizen Opinion, Carville’s pollster, and this one seems most relevant:

Until Joe Biden started pitching “Recovery Summer,” voters seemed reasonably split on whether to cast votes in protest of the administration’s policies, and may have even closed the gap a bit since the beginning of the year. In June, however, the drop in economic indicators began to be too big to ignore or jolly over with a sales pitch. The extension of bad news on employment also became so obvious that the media mainly stopped pretending to be surprised by it. The poll shows a wide margin of people planning protest votes.

This also goes along with a collapse in support for Democratic leadership on economics:

The most interesting part of this chart is that it shows little bounce for Democrats in March and April, when at least a few of the indicators looked more positive. Also note that Democrats have traditionally outpolled Republicans on the economy over the last couple of decades, and often on deficits as well. This is a big shift in American politics if this trend holds up; a -13 on economics is huge in these midterms especially. It could mean that the GOP has the opportunity to discredit Democrats for a long time to come, assuming that a win in the midterms means muscling the White House into a course correction.

It’s not just Democrats that voters have begun to reject, either. A majority have lost faith in President Hopeandchange, too:

The argument that Obama somehow rescued us from something worse than what we see now has worn very thin indeed. Only 41% buy that argument after eighteen months of Obama’s term of office. A majority in Carville’s poll sees the exploding deficit and the moribund economy as Obama’s fault, and a key cause of our current economic malaise.

These numbers are a disaster for Democrats, and an opportunity for Republicans to show real leadership on deficits, government spending, and economic development. This time around, it’s the GOP taking Carville’s mantra of “It’s the economy, stupid,” and hopefully putting it to good use.

Hot Air

The Case for Impeachment of Barack Hussein Obama

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Here’s an excellent article by Tom Tancredo in the Washington Times about not taking the Oath of Office seriously enough to be called high crimes and misdemeanors.

TANCREDO: The case for impeachment

Obama has violated his oath of office over immigration

Eleven years ago, like every citizen elected to serve in Congress or any person appointed to any federal position, I swore an oath to “support and defend the Constitution of the United States against all enemies foreign and domestic.”

I’ve always thought it significant that the Founders included domestic enemies in that oath of office. They thought liberty was as much at risk from threats within our borders as from outside, and French political thinker and historian Alexis de Tocqueville agreed with that warning.

In the immediate aftermath of the terrorist attacks of Sept. 11, 2001, the greatest threat to our nation was clear – and foreign. While Islamic terrorism still represents the greatest external threat to America and American lives, the avowed program of the Obama regime has changed the picture in a fundamental way.

For the first time in American history, we have a man in the White House who consciously and brazenly disregards his oath of office to protect and defend the Constitution. That’s why I say the greatest threat to our Constitution, our safety and our liberties, is internal. Our president is an enemy of our Constitution, and, as such, he is a danger to our safety, our security and our personal freedoms.

Barack Obama is one of the most powerful presidents this nation has seen in generations. He is powerful because he is supported by large majorities in Congress, but, more importantly, because he does not feel constrained by the rule of law. Whether he is putting up the weakest possible defense of the Defense of Marriage Act despite the Justice Department‘s legal obligation to support existing law; disenfranchising Chrysler and GM bondholders in order to transfer billions of investor dollars to his supporters in the United Auto Workers; or implementing yet a third offshore oil-drilling moratorium even after two federal courts have thrown out two previous moratoriums, President Obama is determined to see things done his way regardless of obstacles. To Mr. Obama, the rule of law is a mere inconvenience to be ignored, overcome or “transcended” through international agreements or “norms.”

Mr. Obama‘s paramount goal, as he so memorably put it during his campaign in 2008, is to “fundamentally transform America.” He has not proposed improving America – he is intent on changing its most essential character. The words he has chosen to describe his goals are neither the words nor the motivation of just any liberal Democratic politician. This is the utopian, or rather dystopian, reverie of a dedicated Marxist – a dedicated Marxist who lives in the White House.

Because of the power he wields over budgets, the judiciary, national defense and even health care, his regime and his program are not just about changing public policy in the conventional sense. When one considers the combination of his stop-at-nothing attitude, his contempt for limited government, his appointment of judges who want to create law rather than interpret it – all of these make this president today’s single greatest threat to the great experiment in freedom that is our republic.

Yes, Mr. Obama is a more serious threat to America than al Qaeda. We know that Osama bin Laden and followers want to kill us, but at least they are an outside force against whom we can offer our best defense. But when a dedicated enemy of the Constitution is working from the inside, we face a far more dangerous threat. Mr. Obama can accomplish with the stroke of his pen what bin Laden cannot accomplish with bombs and insurgents.

Mr. Obama‘s actions, not just his words, show the threat he poses. A level of government deficit spending unheard of since World War II and trillion-dollar deficits as far as the eye can see represent an unacceptable threat to our economic security and our children’s future. Mr. Obama could be the first president to guarantee that the next generation of Americans has a lower standard of living than their parents.

Mr. Obamas most egregious and brazen betrayal of our Constitution was his statement to Sen. Jon Kyl, Arizona Republican, that the administration will not enforce security on our southern border because that would remove Republicans’ desire to negotiate a “comprehensive” immigration bill. That is, to put it plainly, a decision that by any reasonable standard constitutes an impeachable offense against the Constitution. For partisan political advantage, he is willfully disregarding his obligation under Article IV, Section 4 of the Constitution to protect states from foreign invasion.

Story Continues →

Fed Would Be Shut Down If It Were Audited, Expert Says

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While we’re trying to get all this info from the federal reserve by the hardest, maybe we should consider sticking to the Constitution for coining our money. The founding fathers warned us about the “central banks” long ago, because they had dealt with them back then and knew what would happen. Remember, “those who fail to from learn history are doomed to repeat it.”

The Constitution gives Congress the power to “coin” money….not to delegate it to  “private banks”, i.e. federal reserve.

Article 1 Section 8

….To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;…….

Fed Would Be Shut Down If It Were Audited, Expert Says

The Federal Reserve’s balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant’s Interest Rate Observer, told CNBC.

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

“If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” he said. “The Fed is undercapitalized in a way that Citicorp is undercapitalized.”

Grant said he would support legislation currently making its way through Congress calling for an audit of the Fed.

Moreover, he criticized the way the Fed has managed the financial crisis, saying the central bank’s target rate should not be around zero.

“I think zero is the wrong rate for almost any economy,” Grant said, adding the Fed has “embarked on a vast experiment in moral hazard. Interest rates are the traffic signals in a market economy, and everything’s green. … You have to wonder whether these interest rates are the right clearing rate or rather they are the imposition of a central bank.”

Amid a disparity between analysts predicting there will be no rate hikes soon and the fed funds futures indicating tightening by the end of the year, Grant said he thinks the Fed indeed will begin raising rates as inflation creeps into the picture.

Fed funds futures have fully priced in as much as a half-point rise in the target rate from its current range of zero to 0.25 percent.

“If the hairs on the back of your neck stand up when there’s too much unanimity of opinion, then one begins to worry about this,” he said. “The Fed proverbially has been late.”

CNBC.com

Fed Unveils Lending Details After Lawmaker Pressure

The Federal Reserve unveiled its most detailed picture yet of its record $1 trillion expansion of credit, as Chairman Ben S. Bernanke responds to congressional pressure for greater transparency from the central bank.

For the first time, the Fed announced details on the number of borrowers and the ratings of securities pledged as collateral for loans. The data come in a new monthly report released by the central bank today in Washington.

Officials still stopped short of identifying the firms, a measure called for by some lawmakers and the subject of freedom-of-information requests and lawsuits.(Which I might add, the federal reserve it not bound to because it isn’t federal…..it’s private.)

Fed officials believe naming companies would undermine the central bank’s efforts to stabilize the economy, a senior Fed official said at a press briefing today.

Congressional Votes

The Fed’s effort at greater transparency in its emergency lending programs is a response to an April 2 nonbinding budget amendment sponsored by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, and the panel’s ranking Republican, Alabama Senator Richard Shelby, Bernanke said. That proposal passed 96-2.

The Fed didn’t mention the tougher measure, also nonbinding, sponsored by Sanders, which passed 59-39 on the same day. Bloomberg News filed a lawsuit against the Fed in November seeking the names of borrowers.

Sanders, in a statement last month, threatened to pass the measure again “in a stronger form” if Bernanke failed to accept it. Bernanke told Sanders in February that identifying borrowers would be “counterproductive” and result in “severe adverse consequences for the economy.”

Read entire article at Bloomberg.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

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