Corporations Favor EPA Regulation of Greenhouse Gases

Nike logoEarlier this month corporate climateers including Nike and 3M were given awards — supposedly “the equivalent of an Oscar for the climate change mitigation world” — for their efforts to reduce their carbon emissions. The honors were bestowed by the Carbon War Room, which “harnesses the power of entrepreneurs to implement market-driven solutions to climate change.” The Virgin Group’s Richard Branson is one of the nonprofit’s co-founders.

The War Room gave Nike the Gigaton Award for the “consumer discretionary” category. The prize was named for a Clinton Global Initiative project called Gigaton Throwdown, which “encourages companies, entrepreneurs, policy makers, and investors to build big solutions to create climate stability and energy security.” Award winners are chosen by the Gigaton Academy, which consists of alarmist luminaries such as Branson, Ted Turner, UN IPCC chairman Rajendra PachauriNicholas Stern, and a host of rent-seeking alternative energy industry leaders.

As … Read More ➡

What’s Behind GM Upgrades?

JP Morgan Chase and Morgan Stanley have initiated coverage of General Motors stock with a positive recommendation, according to Bloomberg reports.  Coincidentally, both firms are the lead underwriters for GM’s IPO. Underwriting fees paid to both JP Morgan Chase and Morgan Stanley were recently disclosed in a chart published by the Wall Street Journal showing fees and TARP money received by major underwriters for GM.

According to the WSJ, JP Morgan Chase and Morgan Stanley each received $36.9 million for underwriting General Motors’ IPO. The government plans to sell more shares in future IPOs and additional profit potential exists. Of course, the better GM shares do, the more money there is to be made.

The WSJ chart also exposes TARP money that GM underwriters received from the government with $25 billion going to JP Morgan Chase and $10 billion going to Morgan Stanley. Given all the above facts, I would … Read More ➡

UAW Will Cash In on GM Stock Dilution

GM UAW logosEarlier this month, General Motors made a $4 billion cash contribution to its UAW pension fund. Reports state that an additional $2 billion worth of GM common stock will be contributed to the fund. What is not being reported is where the stock is coming from.

In addition to public ownership since the IPO, GM common shares are currently held by the US Treasury, Canadian Government, the UAW and Motors Liquidation Company (creditors of Old GM). Unless the US Treasury is giving away taxpayer shares, new shares will have to be issued for an additional $2 billion worth of common shares to fund UAW pension plans.

Any new stock issuance is dilutive to existing shareholders and lowers the value of GM stock. Considering that US UAW benefit plans are still under-funded by $17 billion (as mentioned in reports) and overseas obligations under-funded by $10 billion (not mentioned in reports), it … Read More ➡

GM’s Accounting Issues Run Deep

GM logoGeneral Motors has recently disclosed on more than one occasion that “we have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective.” It remains to be seen how this warning affects future earnings reports, but we can review GM’s past to see how previous financial reporting internal control flaws played out.

Well prior to General Motors’ previous accounting woes culminated in a bankruptcy filing in June of 2009, we had these statements from then CEO Rick Wagoner, “General Motors Corp. has made significant progress on its turnaround plan in the past year, reducing costs and rolling out new products. It’s important to understand that our goal in this restructuring is not just to change GM’s bottom line from red to black. Our goal is to structure GM for sustained profitability and growth to set us up to be successful for years … Read More ➡

CNBC: Flaherty Criticizes Obama/CEO Summit

I discussed President Obama’s CEO “summit” today with David Callahan, the author Fortunes of Change: The Liberal Rich and the Remaking of America. CNBC hosts are Melissa Francis, Sue Herrera and Michelle Caruso-Cabrera. Here is a transcript:

Michelle Caruso Cabrera: A big day in Washington, a big day at the White House. On the agenda – spending some of the cash that US companies are hoarding and hiring new employees. But is the President really trying to do more for business, or is this just for show? Politics as usual? Peter Flaherty is President of the National Legal and Policy Center. David Callahan is a Senior Fellow at Demos and author of Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America. Peter I am going to start with you. Do you believe anything is going to happen from this? Is the President … Read More ➡

Corporations Push President on Global Climate Fund

Pepsi logoAfter the failure in Copenhagen last year for countries who hoped for a successor agreement to the 1997 Kyoto Protocol on global warming, lower expectations surrounded this year’s version of the UN Framework Convention on Climate Change in Cancun. That’s not the same as saying desires for a massive wealth transfer from developed countries to developing countries was diminished — it’s just that they went about it differently.

One effort was to put pressure on nations to create and finance a Global Climate Fund, and the creation part was successful. As the proceedings commenced, the international poverty-and-justice group Oxfam enlisted several corporations to co-sign a letter to President Obama that demanded the U.S. lead the initiative. The Hill reported:

Companies including Starbucks and Nike say U.S. officials should take the lead in creating a global climate change fund, a move that comes as some Senate Republicans are pressing the State

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ShoreBank Successor Named Crooked Contractor to Board

It’s only been four months since the FDIC seized the Obama-favored ShoreBank, changed management, adjusted some of the director oversight, and kept the machine running as Urban Partnership Bank. But it turns out a name change makes no difference when it comes to institutions born, raised and protected under Chicago politics. Crain’s Chicago Business reports:

Urban Partnership Bank, the successor to ShoreBank, late last week hastily withdrew the application it had submitted to state banking regulators to name as one of its directors Donald Beal, owner of Arrow Lumber Co., the South Side firm just barred from doing future business with the city after admitting to defrauding it.

Arrow Lumber is a customer of Urban Partnership Bank, a bank spokesman confirmed. The new lender was financed by a host of Wall Street giants like Goldman Sachs Group Inc. and formed in August to take over the

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Is GM Using Inventory to Fudge Earnings?

GM logoGeneral Motors recently reported that it has a 93 to 95 day supply of vehicles at dealerships in its latest inventory report. This is well above the industry average of a 67 day supply, as well as exceeding analysts recommended 60 day supply. According to Jim Bunnell, general manager of GM’s dealer networks, the reason is because they expect strong demand for vehicles. There is a more likely reason that should be a cause of concern for GM’s new shareholders.

General Motors records revenue when vehicles are shipped to dealerships. While GM has technically sold these vehicles to the dealerships, retail customers haven’t yet purchased the vehicles. This stresses the dealerships as they are paying for vehicles that have not yet been sold.  There are usually incentives (paid by GM) for dealerships to accept the inventory. Once shipped, the inventory is financed (in most part) by government owned Ally Financial. … Read More ➡

Flaherty Rips Outgoing Pfizer CEO Jeffrey Kindler for Supporting ObamaCare on Fox Business Channel

Yesterday, I discussed the resignation of Pfizer CEO Jeffrey Kindler with Stuart Varney on Fox Business Channel. Here is a transcript:

Stuart Varney:  This leads perfectly into our next guest.  Joining the company right now is Peter Flaherty.  He is the President of the conservative watchdog group, the National Legal and Policy Center.  Peter, I presume you heard what our own Andrea Tantaros just said – that there is an element of politics in Mr. Kindler’s abrupt resignation.  You would agree with that I take it, could you give us a little more detail?

Peter Flaherty:  Stuart, there is a report in the Wall Street Journal this morning that Jeffrey Kindler was abusive to his subordinates and that got back to some board members.  Kindler himself says he was just simply exhausted by the demands of the job.  But I … Read More ➡

Prove GM Success by Getting Taxpayers Out of Ally Financial

Ally Bank photoThe General Motors’ IPO has lead to the Obama Administration declaring victory for a successful GM restructuring. GM executives echo the optimistic view of a now healthy auto company with a “fortress like” balance sheet since the infusion of over $50 billion of taxpayer money. There is still one major test left to see just how healthy GM is.

During the time of General Motors’ recent woes, the US Treasury has sunk over $17 billion of taxpayer money in to Ally Financial (previously known as GMAC) making the US government majority owner. Ally Financial has in turn assured financing for GM and Chrysler vehicle sales and dealership inventories. This taxpayer expenditure is conveniently left out when auto industry bailout costs are calculated. The proclaimed success of GM warrants the demand that taxpayers no longer remain on the hook through backdoor bailouts siphoned through Ally Financial or in the form of … Read More ➡