Timothy Geithner

Senate Committee Approves Fannie/Freddie Phaseout, But Bill Keeps Government Role

Johnson, CrapoEveryone in Washington favors "reform." Unfortunately, the term can be highly deceptive. Such is the case of the Housing Finance Reform and Taxpayer Protection Act of 2014 (S.1217), a bill that would abolish troubled mortgage giants Fannie Mae and Freddie Mac in favor of a federally-backed private insurance system. Last Thursday, the Senate Banking Committee approved the measure by a 13-9 vote. Yet the bill, sponsored by Sens. Tim Johnson, D-S.D., and Mike Crapo, R-Idaho (in photo), may never reach the Senate floor - and not undeservedly. For the real problem with Fannie Mae and Freddie Mac, which now are profitable and have more than repaid their federal bailout debt, is not their existence; it is their subjection to tight federal control.

Chinese Company Wins Auction for Taxpayer-Backed A123 Systems

A123 logoThe auction for the assets and business of green stimulus recipient A123 Systems has been won by Chinese auto parts manufacturer Wanxiang Group, which aggressively sought the electric vehicle battery maker at least since the summer.

The successful bid – reported to be about $260 million – follows weeks of warnings by the U.S. government, congressmen and a group of former military and other leaders that transfer of the Massachusetts-based company would compromise American jobs, technology and security. The auction attempts to address some of those concerns, as Wanxiang was not awarded any of A123’s contracts with the U.S. Department of Defense. Instead the company’s “government business,” including all its military contracts, was awarded to Illinois-based Navitas Systems.

Opposition Grows to Sale of A123 Systems to China

A123 logoThe Chinese government, unsurprisingly, has approved a potential sale of stimulus-funded ($279 million-plus) A123 Systems to one of its own automobile parts manufacturers, should the Wanxiang Group’s bid be the highest this week for the bankrupt electric vehicle battery maker.

That was the easy part.

So far Republican Sens. Charles Grassley (Iowa) and John Thune (S.D.) have repeatedly raised questions and concerns about the possible transfer of A123’s business, jobs and technology from the U.S. – where taxpayers have thrown in approximately $132 million only to see many times that amount in losses since its 2009 initial public offering – to China. They’re no longer the only voices speaking out against the transaction.

A123's Executives Get Their Richly Undeserved Bonuses

A123 logoPresident Obama’s penchant for flushing taxpayer money down the green energy toilet lives at least another four years, and his crony supporters continue to benefit.

The latest example is the pending sell-off of assets by bankrupt A123 Systems, which was awarded upward of $279 million in stimulus funds, plus other assorted government grants and contracts. The top executives who presided over its failure – and supported the president’s cap-and-tax initiatives early in his term – are likely to receive millions of dollars in bonuses, thanks to their scheming earlier this year and a bankruptcy court judge.

VIDEO: Treasury Rejects Sale of GM Stake

NLPC Associate Fellow Mark Modica was interviewed last night on Fox Business Network's Willis Report. Here's a transcript:

Big Obama Donor 'Investigated' DOE Loan Program

Herbert Allison

When is a government watchdog not really a watchdog?

When he rolls over and lays at the feet of his master rather than sink his teeth into a program that he’s been tasked to guard.

Such appears to be the (unsurprising) case with Herbert Allison, Jr. (pictured), a former Wall Street executive (Merrill Lynch and TIAA-CREF) until he was appointed president and CEO of Fannie Mae in 2008, after it was put into conservatorship. Subsequently President Obama named (and the Senate confirmed) him as overseer of the Troubled Asset Relief Program (TARP), the $700 billion asset acquisition fund that bailed out Wall Street financial institutions. He served in that role for about 15 months, until September 2010.

The MF Global Collapse Explained (And Why It Should Be a Crime)

Corzine photoAnybody using the financial services industry puts their faith and trust in a whole lot of people they have never seen or ever will. We all rely on regulators and regulations that are instituted by state and federal governments.  In fact, almost anybody who has any savings probably has them parked in one of our financial institutions. To sharpen your focus on this, remember that about 80% of the balance of your checking account is tied up in loans that some strangers have promised to repay.

Obama Mortgage Borrower Bailout Prevents Foreclosures, Slows Recovery

housing chartThe mortgage foreclosure crisis in this country may have been superseded by events in Japan, Libya and elsewhere for now, but in its own way it's taking a heavy toll. And it's likely to get worse, given the context of evidence that an Obama-initiated homeowner subsidy program to stem the tide isn't working and of a new federal agency poised to extract $20 billion from lenders on behalf of heavily delinquent borrowers.

CNBC: Flaherty Says Bailouts Fuel Wall Street Pay

Today I debated Wall Street pay with Keith Boykin of The Daily Voice. CNBC hosts were Melissa Francis, Larry Kudlow and Trish Regan. Here is a transcript:

Political Pressure Saved ShoreBank Management

Geithner photoAmong other things, it looks like the Chicago lobbying to save ShoreBank paid off. Earlier this month I discovered a letter sent by Windy City power player and big Democrat donor Lester McKeever, Jr., to Treasury Secretary Timothy Geithner, which urged his intervention. "It is my hope," McKeever wrote, "and one shared by others who care deeply about its most vulnerable communities, that the ShoreBank recapitalization plan with investment coming from the U.S. Treasury will enable it to continue servicing its customers and fulfilling its mission."

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