In other news...US's Obama orders takeover of banks, auto companies, student loans, home loans, healthcare, etc. Hmmmmmm!
http://www.businessweek.com/ap/financialnews/D9FNMNMO2.htm
The Associated Press May 15, 2010,
CARACAS, Venezuela
President Hugo Chavez announced Saturday the expropriation of a group of iron, aluminum and transportation companies in Venezuela's mining region.
Among the expropriated companies is Materiales Siderurgicos, or Matesi, which is the Venezuelan subsidiary of Luxembourg-based steel maker Tenaris SA.
Venezuela's socialist president said in a televised that his government was going to take over Matesi because "we couldn't reach an amicable and reasonable settlement with the owners."
Chavez said production at the company has been paralyzed since midway through last year, when Venezuela's president announced plans to nationalize it.
Chavez said he was also going to expropriate Venezuelan-owned Orinoco Iron and aluminum-maker Norpro de Venezuela C.A., which is an affiliate of the U.S. company Norpro in association with France's Saint Gobain, among other companies.
As well, Venezuela will take over transport companies that ship raw materials in areas southeast of Caracas. He did not name the companies.
Since coming to power more than a decade ago, Chavez has nationalized major companies in the electricity, oil, steel and coffee sectors, as well as other private businesses.
Monday, May 17, 2010
Reality Check On Our Nation's Debt!!!
Reality Check: Our nation's debt is currently over $12.9 TRILLION ($117,682 per taxpayer). We are in so deep that even if we seized 100% of the fortune's of Bill Gates $53B & Warren Buffett $47B, we would only be able to pay LESS THAN ONE PERCENT (.77%) of our total debt!
Our nation's debt is currently SO HIGH, (over $12.9 TRILLION, $117,682 per taxpayer) That even if we seized the ENTIRE FORTUNES of the ONE HUNDRED RICHEST PEOPLE IN THE WORLD ($1.4 trillion) we would still only be able to pay 10.8% of our total debt!
Even the entire vast fortune's of the ONE THOUSAND RICHEST PEOPLE IN THE WORLD, would come NO WHERE NEAR paying off our debt.
But you know who is expected to pay off the debt...YOU AND I, OUR CHILDREN, OUR GRANDCHILDREN!!!...
Time to stand up for ourselves don't you think?!
Special Report
The World's Billionaires
03.10.10, 06:00 PM EST
http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html
Live US Debt Clock:
http://www.usdebtclock.org/
Our nation's debt is currently SO HIGH, (over $12.9 TRILLION, $117,682 per taxpayer) That even if we seized the ENTIRE FORTUNES of the ONE HUNDRED RICHEST PEOPLE IN THE WORLD ($1.4 trillion) we would still only be able to pay 10.8% of our total debt!
Even the entire vast fortune's of the ONE THOUSAND RICHEST PEOPLE IN THE WORLD, would come NO WHERE NEAR paying off our debt.
But you know who is expected to pay off the debt...YOU AND I, OUR CHILDREN, OUR GRANDCHILDREN!!!...
Time to stand up for ourselves don't you think?!
Special Report
The World's Billionaires
03.10.10, 06:00 PM EST
http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html
Live US Debt Clock:
http://www.usdebtclock.org/
Great Letter To Editor On Immigration:
(Sent but refused to publish in Orange County Register)
Dear Editor:
So many letter writers have based their arguments on how this land is made up of immigrants. Ernie Lujan for one, suggests we should tear down the Statue of Liberty because the people now in question aren't being treated the same as those who passed through Ellis Island and other ports of entry.
Maybe we should turn to our history books and point out to people like Mr. Lujan why today's American is not willing to accept this new kind of immigrant any longer. Back in 1900 when there was a rush from all areas of Europe to come to the United States, people had to get off a ship and stand in a long line in New York and be documented. Some would even get down on their hands and knees and kiss the ground. They made a pledge to uphold the laws and support their new country in good and bad times. They made learning English a primary rule in their new American households and some even changed their names to blend in with their new home.
They had waved good bye to their birth place to give their children a new life and did everything in their power to help their children assimilate into one culture. Nothing was handed to them. No free lunches, no welfare, no labor laws to protect them. All they had were the skills and craftsmanship they had brought with them to trade for a future of prosperity.
Most of their children came of age when World War II broke out. My father fought along side men whose parents had come straight over from Germany , Italy , France and Japan . None of these 1st generation Americans ever gave any thought about what country their parents had come from. They were Americans fighting Hitler, Mussolini and the Emperor of Japan . They were defending the United States of America as one people.
When we liberated France , no one in those villages were looking for the French-American or the German American or the Irish American. The people of France saw only Americans. And we carried one flag that represented one country. Not one of those immigrant sons would have thought about picking up another country's flag and waving it to represent who they were. It would have been a disgrace to their parents who had sacrificed so much to be here. These immigrants truly knew what it meant to be an American. They stirred the melting pot into one red, white and blue bowl.
And here we are with a new kind of immigrant who wants the same rights and privileges. Only they want to achieve it by playing with a different set of rules, one that includes the entitlement card and a guarantee of being faithful to their mother country. I'm sorry, that's not what being an American is all about. I believe that the immigrants who landed on Ellis Island in the early 1900's deserve better than that for all the toil, hard work and sacrifice in raising future generations to create a land that has become a beacon for those legally searching for a better life. I think they would be appalled that they are being used as an example by those waving foreign country flags.
And for that suggestion about taking down the Statue of Liberty , it happens to mean a lot to the citizens who are voting on the immigration bill. I wouldn't start talking about dismantling the United States just yet.
(signed)
Rosemary LaBonte
Dear Editor:
So many letter writers have based their arguments on how this land is made up of immigrants. Ernie Lujan for one, suggests we should tear down the Statue of Liberty because the people now in question aren't being treated the same as those who passed through Ellis Island and other ports of entry.
Maybe we should turn to our history books and point out to people like Mr. Lujan why today's American is not willing to accept this new kind of immigrant any longer. Back in 1900 when there was a rush from all areas of Europe to come to the United States, people had to get off a ship and stand in a long line in New York and be documented. Some would even get down on their hands and knees and kiss the ground. They made a pledge to uphold the laws and support their new country in good and bad times. They made learning English a primary rule in their new American households and some even changed their names to blend in with their new home.
They had waved good bye to their birth place to give their children a new life and did everything in their power to help their children assimilate into one culture. Nothing was handed to them. No free lunches, no welfare, no labor laws to protect them. All they had were the skills and craftsmanship they had brought with them to trade for a future of prosperity.
Most of their children came of age when World War II broke out. My father fought along side men whose parents had come straight over from Germany , Italy , France and Japan . None of these 1st generation Americans ever gave any thought about what country their parents had come from. They were Americans fighting Hitler, Mussolini and the Emperor of Japan . They were defending the United States of America as one people.
When we liberated France , no one in those villages were looking for the French-American or the German American or the Irish American. The people of France saw only Americans. And we carried one flag that represented one country. Not one of those immigrant sons would have thought about picking up another country's flag and waving it to represent who they were. It would have been a disgrace to their parents who had sacrificed so much to be here. These immigrants truly knew what it meant to be an American. They stirred the melting pot into one red, white and blue bowl.
And here we are with a new kind of immigrant who wants the same rights and privileges. Only they want to achieve it by playing with a different set of rules, one that includes the entitlement card and a guarantee of being faithful to their mother country. I'm sorry, that's not what being an American is all about. I believe that the immigrants who landed on Ellis Island in the early 1900's deserve better than that for all the toil, hard work and sacrifice in raising future generations to create a land that has become a beacon for those legally searching for a better life. I think they would be appalled that they are being used as an example by those waving foreign country flags.
And for that suggestion about taking down the Statue of Liberty , it happens to mean a lot to the citizens who are voting on the immigration bill. I wouldn't start talking about dismantling the United States just yet.
(signed)
Rosemary LaBonte
Thursday, May 06, 2010
FREDDIE MAC seeks $11 billion dollars from feds to cover losses...
http://sg.news.yahoo.com/afp/20100505/tts-us-economy-property-finance-972e412.html
Thursday May 6, 2010
WASHINGTON (AFP) - – Troubled US government-backed mortgage firm Freddie Mac on Wednesday asked for an additional 10.6 billion dollars from the Treasury Department to cover losses.
Announcing a 6.7 billion dollar loss in the first quarter, Freddie Mac said it would need the new funding by June 30 this year.
The Washington-area company has already received more than 50 billion dollars in taxpayers cash to cover losses from toxic assets.
It warned that further demands would be on the way: "Freddie Mac expects to request additional draws," the firm said in a statement.
"The size and timing of such draws will be determined by a variety of factors that could adversely affect the company's net worth."
In 2008, the government pledged to ensure that Freddie Mac, and its larger sister organization Fannie Mae, kept a "positive net worth."
The deal was designed to prop up the vital US housing market from collapsing totally and pushing the economy over the precipice.
But in a sign that the US housing sector is still in difficulty, Freddie said the percentage of its loans not paid on time or in full rose to 4.13 percent in the first three months of the year.
In the final three months of last year the rate stood at 3.98 percent.
The future of Fannie and Freddie has become the latest bone of contention between Democrats who argue they must remain government-backed to aid low-income housing and Republicans who advocate their privatization.
In March, Treasury Secretary Timothy Geithner swatted aside pressure for a swift reform of the mortgage giants as data pointed to a still struggling real estate market.
Geithner told Congress any restructuring of Fannie Mae and Freddie Mac, which received a 100-billion-dollar-plus government bailout at the height of the housing crisis, "must be done as part of a reform of the wider housing finance system."
Geithner argued reforms would "take several months" to develop and should only be "enacted and executed at a time of greater market stability."
Thursday May 6, 2010
WASHINGTON (AFP) - – Troubled US government-backed mortgage firm Freddie Mac on Wednesday asked for an additional 10.6 billion dollars from the Treasury Department to cover losses.
Announcing a 6.7 billion dollar loss in the first quarter, Freddie Mac said it would need the new funding by June 30 this year.
The Washington-area company has already received more than 50 billion dollars in taxpayers cash to cover losses from toxic assets.
It warned that further demands would be on the way: "Freddie Mac expects to request additional draws," the firm said in a statement.
"The size and timing of such draws will be determined by a variety of factors that could adversely affect the company's net worth."
In 2008, the government pledged to ensure that Freddie Mac, and its larger sister organization Fannie Mae, kept a "positive net worth."
The deal was designed to prop up the vital US housing market from collapsing totally and pushing the economy over the precipice.
But in a sign that the US housing sector is still in difficulty, Freddie said the percentage of its loans not paid on time or in full rose to 4.13 percent in the first three months of the year.
In the final three months of last year the rate stood at 3.98 percent.
The future of Fannie and Freddie has become the latest bone of contention between Democrats who argue they must remain government-backed to aid low-income housing and Republicans who advocate their privatization.
In March, Treasury Secretary Timothy Geithner swatted aside pressure for a swift reform of the mortgage giants as data pointed to a still struggling real estate market.
Geithner told Congress any restructuring of Fannie Mae and Freddie Mac, which received a 100-billion-dollar-plus government bailout at the height of the housing crisis, "must be done as part of a reform of the wider housing finance system."
Geithner argued reforms would "take several months" to develop and should only be "enacted and executed at a time of greater market stability."
Saturday, May 01, 2010
GM paid back government loan -- with taxpayer money -- to get more taxpayer money!
"In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!"
The General Accountability Office concluded, ""The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM."
http://www.forbes.com/2010/04/23/general-motors-economy-bailout-opinions-columnists-shikha-dalmia.html
GM is paying back Uncle Sam to shake him down for more money.
Uncommon Sense
Still Government Motors
Shikha Dalmia, 04.23.10, 3:40 PM ET
GM CEO Ed Whitacre announced in a Wall Street Journal column Wednesday that his company has paid back its government bailout loan "in full, with interest, years ahead of schedule." He is even running TV ads on all major networks to that effect--a needless expense given that a credulous media is only too happy to parrot his claims for free. Detroit Free Press' Mike Thompson, for example, advises bailout proponents to start "warming up their vocal chords" to jeer their opponents with chants of "I told you so."
But before belting out their victory aria, GM-boosters ought to hear the whole story--not just the fairytale version about Government Motors' grand comeback that Mr. Whitacre is feeding them.
Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn't, the company, which couldn't raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, "The GM Bailout: Paid Back in Full," most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.
Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate--a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)
But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.
But wait! Even that's not the full story given that GM, which has not yet broken even, much less turned a profit, can't pay even this puny amount from its own earnings.
So how is it paying it?
As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan.
GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development--although hardly one worth hyping in ads and columns--if it were not for a further plot twist.
--------------------------------------------------------------------------------
Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible.
In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!
GM boasts that, because it is doing so well, it is paying the $6.7 billion five years ahead of schedule since it was not due until 2015. So will there be an accelerated payback of the rest of the $49.6 billion investment? No. That goal has been pushed back, as it turns out.
In order to recover that investment, the government has to sell its equity. It plans to do that only when GM becomes a publicly traded company once again. GM was hoping to turn a profit by the end of 2010 and float an initial public offering this winter. However, GM Chief Financial Officer Chris Liddell, when queried about that timeline a few days ago, demurred. The offering will be made, he said, "when the markets and the company are ready."
(Take that, taxpayers!)
The reality is that there is no certainty that GM will ever be able to make taxpayers whole. Some analysts such as Center for Automotive Research's Sean McAlinden and Global Insight's George Magliano believe that it will--eventually. McAlinden maintains that this will happen when the company's market capitalization touches $60 billion. (At GM's peak in 2000, this level was only $57 billion.) This is a challenging but not an impossible goal--provided the economy does not dip into another recession, he maintains. Magliano too maintains that the company will be able to pay back taxpayers if the industry is able to ramp up annual vehicle sales from the expected 10.8 million this year to 17 million in 2014 and GM captures 20% of these sales.
The General Accountability Office, on the other hand, remains deeply pessimistic. It concluded in a December report (which a more recent April report has said nothing to contradict, despite media spin to the contrary) that: "The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially more than they have in the past."
Mr. Whitacre's bailout payback ploy is a desperate attempt to win back the car-buying public deeply disgusted by the spectacle of GM rattling its tin-cup before Uncle Sam. But the fact of the matter is that the company is still deep in the hole. It might claw its way back – or it might not. But surely it's premature for its media boosters to pop open the champagne bottle without getting their story straight?
Shikha Dalmia is a senior analyst at Reason Foundation and a biweekly Forbes columnist
The General Accountability Office concluded, ""The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM."
http://www.forbes.com/2010/04/23/general-motors-economy-bailout-opinions-columnists-shikha-dalmia.html
GM is paying back Uncle Sam to shake him down for more money.
Uncommon Sense
Still Government Motors
Shikha Dalmia, 04.23.10, 3:40 PM ET
GM CEO Ed Whitacre announced in a Wall Street Journal column Wednesday that his company has paid back its government bailout loan "in full, with interest, years ahead of schedule." He is even running TV ads on all major networks to that effect--a needless expense given that a credulous media is only too happy to parrot his claims for free. Detroit Free Press' Mike Thompson, for example, advises bailout proponents to start "warming up their vocal chords" to jeer their opponents with chants of "I told you so."
But before belting out their victory aria, GM-boosters ought to hear the whole story--not just the fairytale version about Government Motors' grand comeback that Mr. Whitacre is feeding them.
Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn't, the company, which couldn't raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, "The GM Bailout: Paid Back in Full," most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.
Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate--a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)
But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.
But wait! Even that's not the full story given that GM, which has not yet broken even, much less turned a profit, can't pay even this puny amount from its own earnings.
So how is it paying it?
As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan.
GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development--although hardly one worth hyping in ads and columns--if it were not for a further plot twist.
--------------------------------------------------------------------------------
Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible.
In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!
GM boasts that, because it is doing so well, it is paying the $6.7 billion five years ahead of schedule since it was not due until 2015. So will there be an accelerated payback of the rest of the $49.6 billion investment? No. That goal has been pushed back, as it turns out.
In order to recover that investment, the government has to sell its equity. It plans to do that only when GM becomes a publicly traded company once again. GM was hoping to turn a profit by the end of 2010 and float an initial public offering this winter. However, GM Chief Financial Officer Chris Liddell, when queried about that timeline a few days ago, demurred. The offering will be made, he said, "when the markets and the company are ready."
(Take that, taxpayers!)
The reality is that there is no certainty that GM will ever be able to make taxpayers whole. Some analysts such as Center for Automotive Research's Sean McAlinden and Global Insight's George Magliano believe that it will--eventually. McAlinden maintains that this will happen when the company's market capitalization touches $60 billion. (At GM's peak in 2000, this level was only $57 billion.) This is a challenging but not an impossible goal--provided the economy does not dip into another recession, he maintains. Magliano too maintains that the company will be able to pay back taxpayers if the industry is able to ramp up annual vehicle sales from the expected 10.8 million this year to 17 million in 2014 and GM captures 20% of these sales.
The General Accountability Office, on the other hand, remains deeply pessimistic. It concluded in a December report (which a more recent April report has said nothing to contradict, despite media spin to the contrary) that: "The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially more than they have in the past."
Mr. Whitacre's bailout payback ploy is a desperate attempt to win back the car-buying public deeply disgusted by the spectacle of GM rattling its tin-cup before Uncle Sam. But the fact of the matter is that the company is still deep in the hole. It might claw its way back – or it might not. But surely it's premature for its media boosters to pop open the champagne bottle without getting their story straight?
Shikha Dalmia is a senior analyst at Reason Foundation and a biweekly Forbes columnist
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