American taxpayers have already spent more than $13 billion bailing out Chrysler. The Obama administration already forgave more than $4 billion of that debt when the company filed for bankruptcy in 2009. Taxpayers are never getting that money back. But how is Chrysler now paying off the rest of the $7.6 billion they owe the Treasury Department?
The Obama administration's bailout agreement with Fiat gave the Italian car company a "Incremental Call Option" that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for...wait for it...$3.5 billion.
Furthermore, Exhibit 99.1 of the Form 8K filed by GM with the SEC on November 16, 2009, seems to confirm that the source of funds for GM's debt repayments was a multi-billion dollar escrow account at Treasury-not from earnings. In the 8K filing GM acknowledged:
"Of the $42.6 billion in cash and marketable securities available to GM as of September, 30, 2009, $17.4 billion came from an escrow account with Treasury,
"$6.7 billion of the escrow account available to GM was allocable to the repayment of loans to Treasury,
"$5.6 billion in cash would remain in the Treasury escrow account following the repayment by GM of their loans, and
"Upon repaying Treasury, any balance of escrow funds would be released to GM.
Therefore, it is unclear how GM and the Administration could have accurately announced yesterday that GM repaid its TARP loans in any meaningful way. In reality, it looks like GM merely used one source of TARP funds to repay another. The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment
by endurorob_5 June 3, 2011 10:45 AM EDT "The jobs being added don't even cover the increase in population every month."
____
Another strong argument for planned parenthood folks. Good point Endopeo_5!!!!
would somebody please tell obama - and cbs - that there is no "recovery" and that there is no "auto rebound". Unemployment hasn't budged - and is in fact higher with more companies talking about another round of layoffs. There are record numbers on welfare and foodstamps, a double dip in housing, a steadily devaluing dollar, a decrease in manufacturing, rising debt, rising gas and food prices, and inflation is set to kick-in big time. Every economic metric is disasterous. As for the "auto rebound" it is a load of crap. Yes, the taxpayers gave these companies billions to hire more people. However, nobody is buying these cars. The chevy volt is a disaster. GM's sales figures are still abysmal, and GM stock is a lox. GM has been inflating their sales figures by selling cars between dealerships and pocketing the tax advantages provided by the government as profit. In the meantime, the bondholders, preferred stock shareholders are getting screwed, and taxpayers are out $14B which they will never get back.
Just a quick reminder that Obama but the automakers into a psuedo recievership rather than give the automakers bridge loans. The result of the bankruptcies wiped out the bond holders which were held by nearly every retiree. The end result is: A loss to the treasury, significant decrease in income to a huge swath of retirees, wiped out bondholders, significant job loss. The forced bankruptcies of these manufacturering titans once post mortems are performed on the impact to the economy will show this was a major disaster not only to the individuals impacted but the loss in revenue to the treasury in income taxes. Obama is an idiot.
The posting of advertisements, profanity, or personal attacks is prohibited. By using this Web site you agree to accept our Terms of Service. Click here to read the Rules of Engagement.
Reply to Comment The posting of advertisements, profanity, or personal attacks is prohibited. By using this Web site you agree to accept our Terms of Service. Click here to read the Rules of Engagement.
Oooo, Mr. Obama that's not good.
The Obama administration's bailout agreement with Fiat gave the Italian car company a "Incremental Call Option" that allows it to buy up to 16% of Chrysler stock at a reduced price. But in order to exercise the option, Fiat had to first pay back at least $3.5 billion of its loan to the Treasury Department. But Fiat was having trouble getting private banks to lend it the money. Enter Obama Energy Secretary Steven Chu who has signaled that he will approve a fuel-efficient vehicle loan to Chrysler for...wait for it...$3.5 billion.
Furthermore, Exhibit 99.1 of the Form 8K filed by GM with the SEC on November 16, 2009, seems to confirm that the source of funds for GM's debt repayments was a multi-billion dollar escrow account at Treasury-not from earnings. In the 8K filing GM acknowledged:
"Of the $42.6 billion in cash and marketable securities available to GM as of September, 30, 2009, $17.4 billion came from an escrow account with Treasury,
"$6.7 billion of the escrow account available to GM was allocable to the repayment of loans to Treasury,
"$5.6 billion in cash would remain in the Treasury escrow account following the repayment by GM of their loans, and
"Upon repaying Treasury, any balance of escrow funds would be released to GM.
Therefore, it is unclear how GM and the Administration could have accurately announced yesterday that GM repaid its TARP loans in any meaningful way. In reality, it looks like GM merely used one source of TARP funds to repay another. The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment
Does anyone else see a pattern here?
"The jobs being added don't even cover the increase in population every month."
____
Another strong argument for planned parenthood folks. Good point Endopeo_5!!!!
:)
-- Damn girl -- you had me and Ms Zann thinking one of the bully gang thugs went squalling to their CBS Dabby to get you banned -
Go see the article about Palin not upstaging Romney
Man It's great to see you're still here cupcake!
XOXO
Who got the 1.3 billion, were was it spent?
Taxation without representation!