States, Obama Shake Down Banks in $25 Billion Mortgage Settlement

foreclosure_0It took about 500 days of negotiation. But on Thursday, February 9, attorneys general representing nearly all 50 states made the announcement: Five banks will pay a combined $25 billion over three years in civil penalties and loan write-downs for having serviced mortgage foreclosure paperwork over the previous four years without proper review. The settlement, say supporters, will compensate homeowners for prior predatory lending practices, reform the banking industry and give the economy a boost. But the context of the case suggests an ulterior motive: socializing the housing market. This by no means is the first such attempt during the Obama years. And the true cost of this shakedown, the largest of its kind since the 1998 tobacco industry settlement, may be far higher than $25 billion.

National Legal and Policy Center less than two weeks ago reported on President Obama’s broad housing policy initiative, “Plan to Help … Read More ➡

GE Steps Up Support for GM Chevy Volt Folly

Last week, Greencarreports.com reported that crony corporation, General Electric, will be purchasing only Chevy Volts for employee use. The move will help General Motors proclaim that the Volt is a success (and help ensure that GE sells more charging stations) as thousands of orders for the vehicle hit the books, conveniently timed to coincide with the run up to the 2012 presidential election.

The Volt has not caught on with the majority of consumers as the benefits of traveling 20 to 45 miles on an electric charge before getting about 30 miles per gallon on premium fuel do not outweigh the cost of over $40,000. The wealthy purchasers who have been able to afford the car defend the vehicle and proclaim it to be a technological wonder.

GM has had various unsubstantiated excuses for the low sales of the Volt ranging from lack of supply to a right wing conspiracy … Read More ➡

UAW Bonuses Add Insult to Injury

Last night, NLPC President Peter Flaherty criticized GM’s bonuses to United Auto Workers while the company is stil deep in the hole to taxpayers. He appeared on CNN’s Situation Room. Here’s a transcript:

Candy Crowley: New evidence that General Motors has made a big financial comeback after taxpayers bailed out the auto giant a few years ago. The company proudly announced it has posted record profits, but critics aren’t happy about the way GM is spending that money. Here’s our Lisa Sylvester.

Lisa Sylvester: Hi there, Candy. Well, all three U.S. automakers are back from the brink. GM had a very profitable year in 2011 with its North American operations. Now the question is, though, should those profits be shared with the workers, even though U.S. taxpayers are still on the hook for the company?

(BEGIN VIDEOTAPE)

Lisa Sylvester (voice-over): November 2008, the CEOs of the big three … Read More ➡

GM Pays Less Tax Than Buffett’s Secretary; UAW Gets Bonuses

General Motors reported year end earnings figures today. The company made about $9 billion dollars in 2011. How much of its “fair share” is GM paying in taxes? Zero. In fact, from GM’s financial report, they actually received a “benefit” of $110 million for the year. The UAW benefited as well, as they are set to receive $7,000 per worker in profit sharing bonuses.

The sweet tax deal GM receives was set up by the Obama Administration as the company was granted a multi-billion dollar tax credit for loss carry-overs when they exited their bankruptcy proceeding. Normally, the company would not have received the tax credit but the bankruptcy process was anything but normal. Creditors were put in the back of the line to protect UAW interests and tax code was changed so that GM could profit for years without paying its fair share in taxes. President Obama now campaigns … Read More ➡

After Layoffs, Execs Get Big Raises at Taxpayer-Funded A123

A123 logoA taxpayer-funded electric vehicle battery company, that is considered in great danger due to its dependency on troubled EV company Fisker Automotive, has awarded its top executives big salary increases despite a steep downward trajectory in its stock price.

Massachusetts-based A123 Systems — which received $279.1 million in stimulus money from the Department of Energy, and up to $135 million in incentives from the State of Michigan — boosted the base salaries of two vice presidents and its chief financial officer on February 8.

Chief Financial Officer David Prystash was bumped 27 percent to $380,000; VP of Energy Solutions Robert Johnson’s base salary increased 51 percent from his 2010 level to $400,000; and VP of Automotive Systems Jason Forcier saw his pay rise 32 percent from 2010, to $350,000. The news was first reported by the Boston Web site of Citybizlist.com, which obtained the information from an A123 SEC filingRead More ➡

LightSquared Fiasco Puts Harsh Spotlight on FCC’s Genachowski

Genachowski photoIn a major victory for the National Legal and Policy Center, the Federal Communications Commission (FCC) yesterday reversed itself and revoked a controversial waiver it had granted LightSquared, which would have allowed the company to deploy a national wireless network. The reversal is not only a major setback for LightSquared’s billionaire owner Phil Falcone, but puts a harsh spotlight on the role of FCC Chairman Julius Genachowski.

According to Cecelia Kang of the Washington Post Tech blog:

The FCC’s decision is expected to all but end LightSquared’s aspirations to provide mobile broadband services via satellite airwaves — a plan that was touted from its inception by FCC Chairman Julius Genachowski. Under his tenure, the FCC granted the company a key conditional waiver in January 2011 that was meant to help fast-track the network.

A friend of President Obama’s from Harvard Law School, Genachowski has brought a culture of wheeling … Read More ➡

Why is GM Spending Millions to Re-Hype the Chevy Volt?

In the words of Yogi Berra, it looks like déjà vu all over again as General Motors plans to “relaunch” the Chevy Volt. Just in case you missed the first rollout that saw certain financial news networks dedicate loads of airtime to help GM build the hype surrounding a vehicle that was to be a savior for GM as support was garnered for a taxpayer bailout and subsequent IPO, we now get a second take on the failed first production.

Many of the same cast will appear as cronies at Motor Trend will be cited for giving the Volt Car of the Year award. If there was any question that Motor Trend is in the tank for GM and the Volt, just look at their report on January Volt sales where they stated, “As for the most improved models, there were some interesting inclusions: the best model was the … Read More ➡

What’s Behind Eastwood’s Super Bowl Ad?

It is mostly unanimous that Clint Eastwood’s Super Bowl ad appearance was a stirring and emotional tribute to America and Detroit. The ad was heartfelt, despite the fact that bailed out Italian-owned auto company, Chrysler, paid for it. Unless NBC offered some significant discounts to their ad rates, the ad cost Chrysler about $14 million. Considering the political nature of the ad and the fact that Chrysler vehicles were not touted in the ad, I must ask the cynical question; what’s in it for Italian-owned Chrysler?

Chrysler CEO, Sergio Marchionne, is a pretty smart guy. I don’t think he would cavalierly spend $14 million just to pay tribute to America and Detroit. An article in Businessweek touches on one possible ulterior motive when it states, “Chrysler continues to seek low-interest loans from the U.S. Energy Department to develop and produce fuel-efficient cars. The company sought $3.5 billion in such loans … Read More ➡

GM’s Dubious Super Bowl Ad Claims

Some very humorous (if not cost-effective) ads were exhibited by General Motors during this year’s Super Bowl game. GM continues to freely spend its stockpile of taxpayer supplied cash reserve as it even aired a spot touting the Chevy Volt. At a cost of $3.5 million for a 30 second spot the expense equals about 15% of the total revenues GM brought in during the entire month of January for the Volt when sales fell to a dismal level of 603. What is the reasoning behind spending so much to advertise a vehicle that sells in such small numbers and is not profitable if not political? But the ad that may lead to more controversy than the Volt folly was the one in which GM claims their trucks are more dependable than Ford’s; a claim that is highly debatable and not backed by studies at Consumers Reports (CR).

The ad … Read More ➡

Green Tech Doesn’t Need Taxpayer ‘Investment’

Google logoPresident Obama said in his State of the Union speech last month that he would not “walk away from the promise of clean energy,” and according to a Politico report, he “doubled-down” on the promise by highlighting (more) commitments to federal grants and incentives for wind energy, solar power and natural gas vehicles in quasi-campaign speeches out West.

“We’re not going to cede the wind industry or the solar industry or the battery industry to China or Germany because we’re too timid to make that same commitment here in the United States,” the president said at another appearance at Buckley Air Force Base in Colorado. “We’ve got to double down on a clean-energy industry that’s never been more promising.”

The president speaks as if these energy technologies would wither without government support. But last year USA Today reported that big companies were “aggressively” jumping into clean technology, with one … Read More ➡