bailouts

Fannie Mae/Freddie Mac Shareholders Publicize Suit against Federal Taking of Assets

Fannie Mae and Freddie MacFannie Mae and Freddie Mac formally are known as Government-Sponsored Enterprises, or GSEs. These days the "S" might stand for "stolen." A group of their shareholders are arguing as much in federal court in Perry Capital v. Lew. The U.S. Treasury Department, claim the plaintiffs, overstepped its authority by impounding profits in perpetuity through its "sweep" rule of 2012. On Wednesday, February 5, the group, Shareholder Respect, held a conference in Washington, D.C. to highlight its view that the rule violates the terms of the temporary conservatorship under which Fannie Mae and Freddie Mac have been forced to operate since 2008.

Did GM Delay Recall With Deadly Results? Problems Reported Years Ago

Chevy CobaltGeneral Motors recently recalled close to a million vehicles for a deadly problem that resulted in six deaths. The models involved were Chevy Cobalts and Pontiac G5s from the 2005 through 2007 model years. The question is, why did NHTSA and GM wait so long to recall vehicles with a dangerous defect when the problems surfaced years ago?

GM Promotes Gay Rights as Company-Wide Problems Mount

General Motors continues to find innovative ways to make political points while losing market value. The company continues its heavy ad spending, this time at the Olympics. The marketing wizards at GM are trying to tap into the LGBT consumer market, which equals approximately 3.5% of the total population. At the same time, GM shares are getting hit once again as higher inventory levels are leading to heavy discounting. The company still looks a lot like Government Motors.

GM’s Debt Rises as Earnings Disappoint; Warns on First Quarter

GMGeneral Motors announced disappointing earnings results today and issued a warning that first quarter results will underwhelm as well. The reasons behind the earnings' miss are surely going to be explained away by pundits and proponents of the company still known as Government Motors to many. Sorting through the smoke and mirrors can lead to some important and simple explanations as to what is going on at GM.

Bailed-Out GM Falls to Third Place in Global Sales, January Sales Disappoint

Mary Barra and VoltGeneral Motors shares are dropping again today as January sales figures disappointed Wall Street. Sales for the month fell 11.9% from a year ago with weakness across the board. The news follows last week's announcement that GM has now dropped to number three in global sales, being surpassed by both Toyota and Volkswagen.

Obama/Barra Embrace Shows GM is Still Government Motors

Barra SOTUThe Obama Administration may have sold the last of the taxpayers' shares in General Motors, but it appears that politics will continue to play a powerful role in the management of the company. New GM CEO Mary Barra did not seem too concerned about appearances when she attended the State of the Union as Obama's guest. Her predecessor Dan Akerson in previous months had gone to great lengths to distance GM from the federal government.

Chevy Malibu Problems Epitomize GM's Struggle

Government MotorsGeneral Motors is now approaching its fifth year of existence since emerging as a new entity as a result of the 2009 auto bailouts which saw taxpayers fund a bankruptcy process to the tune of $50 billion. Much has been debated about the "success" of GM since the controversial government-orchestrated restructuring. While GM management recently announced a dividend in an attempt to ensure investors of financial stability, a more telling indicator of the likelihood of future profitability may be found through an analysis of how competitive the company's vehicles are.

Curious Timing for GM Dividend Announcement

The internet was ablaze Tuesday evening with stories presenting a perceived positive move by General Motors' outgoing government-appointed management. All hail! "General Motors to pay first dividend since 2008," trumpeted the headlines. GM shares immediately spiked up in after-hours trading with shares rising about $1.60 or 4% on the news. Unfortunately for those duped by the proclamation, GM followed the story hours later with a profit warning. For the time being, the bad news outweighed the good with GM shares reversing course and ending the day Wednesday with a loss of over one and a half percent on a day that the market rallied.

Awards Won’t Drive Sales for Recalled Chevy Silverado

Silvardo awardGeneral Motors seems to be really good at winning awards for its vehicles. The Chevy Silverado just took home the North American Truck of the Year Award at the Detroit Auto Show. The truck also was just embarrassingly recalled due to a potential fire hazard. Unfortunately for GM, the bad news outweighs the good as awards do not always result in increased sales. Just look at the award-winning Chevy Volt as an example.

Mel Watt Sworn in as Fannie Mae/Freddie Mac Conservator

Melvin Watt sworn in as FHFA headAs a Democratic North Carolina congressman, Melvin Watt had a hand in creating the mortgage meltdown. Now he’s the new head of an agency charged with helping to reverse the meltdown. Irony is well and alive in Washington, D.C.  Yesterday former Rep. Watt (in photo) was sworn in to a five-year term as director of the Federal Housing Finance Agency (FHFA), created in 2008 to oversee Fannie Mae and Freddie Mac. These two companies now hold or guarantee roughly $5 trillion in assets. The Democratic-majority Senate had confirmed Watt on December 10 by 57-41 following a failed effort in October to block a Republican filibuster.

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