Damn. That is One Big Loophole GE Found!
I have to watch Congress dither over withholding money that would bring much-needed health care to the uninsured, and then I get to watch things like this. Compare and contrast!
General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks.
At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.
The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.
As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company, GE chief executive Jeffrey Immelt acknowledged in December.
GE's finance arm is not classified as a bank. Rather, it worked its way into the rescue program by owning two relatively small Utah banking institutions, illustrating how the loopholes in the U.S. regulatory system are manifest in the government's historic intervention in the financial crisis.
The Obama administration now wants to close such loopholes as it works to overhaul the financial system. The plan would reaffirm and strengthen the wall between banking and commerce, forcing companies like GE to essentially choose one or the other.
"We'd like to regulate companies according to what they do, rather than what they call themselves or how they charter themselves," said Andrew Williams, a Treasury spokesman.
Yeah, Andrew, that would be nice.
We bring good things to life!
but they sure do put out shitty programs on NBC. (They should just let "Heroes" die a quick death.)
The shows on USA Network and the rare gem on SyFy (jeebus, I really hate that) is about the only decent form of entertainment out there.
"When are we going to stop trying to tell elected officials what to do. Our job is to spend the taxpayers' money the best way we can." -- Tommy Watkins, Justice of the Peace, Crawford County, Arkansas
Millions of Americans can't see a doctor--even if they're insured.
What the hell is it going to take to get this point across to the media and the general public?
What the hell is it going to take to get this point across to the politicians on both sides of the spectrum in Washington?
If the people don't make some noise, the media will not pay attention, and no pressure will be brought to bear on the politicians.
Somewhat related--I was in the car today and heard Ed Schulz say that he'd received a lot of angry emails from his listeners over the weekend because on Friday he'd gone wall-to-wall with "Oh-my-gawd-the-king-of-pop-is-dead" coverage. His explanation: GE (owner of MSNBC) had demanded that he do it, so he was powerless to cross his bosses.
That explanation makes sense; I know I've been asked to do things by my bosses I didn't agree with, yet I had to keep my job. But it just highlights that corporations steer the media to focus on whatever the hell they want the media to focus on. If that means ignoring health care, or Iran, or the banking theft, or anything of real consequence in order to blather on endlessly about Michael Jackson (or Anna Nicole Smith or...you get the idea), well, the public welfare be damned. People want their entertainment, and that's what sells.
The Big-Fat Redhead from Minnesota will have enough clout to give GE/MSNBC the finger and tell them to stuff it.
That could explain why Keith was already looking bored by hour two of the "exclusive" coverage on Thursday.
"When are we going to stop trying to tell elected officials what to do. Our job is to spend the taxpayers' money the best way we can." -- Tommy Watkins, Justice of the Peace, Crawford County, Arkansas
they just don't care as long as it doesn't affect them or their families; and, they can keep on riding' the Gravy Train!
"Egotism is the anesthetic that dulls the pain of Stupidity" - Frank Leahy
...a good chunk of the media. That's one of the reasons we are so thoroughly fucked.
Captain's Bank for the People. I need $30 Bil.
The Post article states:
Ever notice how the Obama administration is always "working to" do something? Unless of course that "something" is what's wanted by powerful interests. Then, it's hurry up and give the cash (or immunity) away - no questions asked and no strings attached.
Meanwhile: closing Guantanamo; giving prisoners a fair trial; leaving Iraq; determining an objective for escalation in Afghanistan; meaningful environmental, corporate or financial regulation; gay rights in the military; and anything that does not directly benefit powerful interests is never done and remains a "work in progress."
Corruption favors the wealthy.
you never have to actually do anything.
That's the larger lesson of Forp. Yksmohc's enduring observation about the Israeli-Palestinian peace 'process': As long as there is an on-going process, you never actually have to make peace...
Obama's got a lot of special interests to make sure he pleases before making any bold decisions. It's much easier when it can be sold as in the nation's best interest (money to banks or else everything collapses, immunity or the terrorists win). It's much harder when it's counter to the nation's best interests (tax dollars to obscenely rich corporations, torturing and imprisoning innocent people, qualified arab translators in the military). They need to hear ideas from the best and brightest special interests in how to spin it properly to the people.
Hopefully humanity will one day learn to be humane.
I say we bust General Electric down to private.
Diabolus est Deus Inversus
This is a very good idea. Capital leasing firms like GE provide the funds small businesses need to acquire everything from a school bus or garbage truck to a new CNC lathe. This was probably the best idea of the whole bailout. The loans are backed by the purchased asset which sure beats throwing funds at Wall Street. The only way for GE to profit from this is to actually put money into circulation. That's a good thing. Don't believe me? Ask Krugman.
Hasa Diga Eebowai
I'm not an expert on this but here's my two cents.
It may be the best idea of the whole bailout but that's not exactly a high bar to meet.
Why does the American taxpayer need to give one of the wealthiest companies in the world money for them to invest in things that it will make a profit from? Why can't they do it on their own? The only reason they would require taxpayer capital to invest in businesses is if it was a near guaranteed loser of an investment. If there's a decent chance at profit they'd be all over it.
So again, we're throwing money into a sink hole - Or the folks at GE don't like making profits.
The only exceptions I can think of in my limited brain-power would be if they were giving incentives to invest in new technologies, community projects or other such things. But, isn't that what the "stimulus package" was for?
Again, I'm no expert but this just smells fishy. Really rotten mackrel fishy.
Hopefully humanity will one day learn to be humane.
and every other leasing company has to borrow money on the open market in order to do all these lease to purchase deals. In case no one noticed the banks were sitting on their tarp money and there wasn't dick being raised in the open market. Leasing companies got as big as they did because they did something better and cheaper than the banks. Go to your bank and try borrowing money for a new machine tool and you'll find why. They don't know what it is and they don't know what the market for it might be if they wind up owning it so they want at least a fifty percent contribution from the business and high interest because of their own ignorance. Leasing companies not only know those markets their more accurate risk assessments mean lower borrowing costs for the business. That translates directly into more money for capital goods acquisition. I believe were calling that stimulus now. I'd like to know where I can write to tell them how appreciative I am of this very wise decision.
Hasa Diga Eebowai
And I agree that banks only using TARP to further their own limited needs with no interest in opening up the market to us small business folks.
My question is: Why does the taxpayer need to fund lenders? If lenders have money - as GE does - why can't they lend that money?
Again, I'm not an expert. I'm just a guy who doesn't like paying for other people's risks while they make profits off our purchases.
Hopefully humanity will one day learn to be humane.
between having capital and having that capital available to fund new deals. Leasing companies are not banks and they can't lend more than they have. No new cash means no new deals. I wish they had put more money into this sort of venture rather than covering illusory Wall Street derivatives.
Hasa Diga Eebowai
...here? Seems to me they're making money from taxpayer dollars.
"As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program,"
No mention here of them being troubled. The whole bailout idea has been and continues to be a debacle.
It was a good idea, but it failed at execution of the idea.
"When are we going to stop trying to tell elected officials what to do. Our job is to spend the taxpayers' money the best way we can." -- Tommy Watkins, Justice of the Peace, Crawford County, Arkansas
...then? Instead of wasting all the money we have with TARP, just take over the Fed and make it a government owned and run entity. From there, start loaning money directly to the businesses who need it. Screw the banks, let the irresponsible ones fail. I thought that was how business is supposed to work.
Just cut a check in the amount given to the banks divided up among all the Americans that paid taxes in the last three or four years.
You want to stimulate the economy, put money in the hands of the people to pay of credit card debts, reinforce their savings or save their homes or cars from being repossessed.
But that kind of idea may be a bit too progressive.
"When are we going to stop trying to tell elected officials what to do. Our job is to spend the taxpayers' money the best way we can." -- Tommy Watkins, Justice of the Peace, Crawford County, Arkansas
And in the the meantime small business which are the engine of economic growth have access to capital.Because GE is paying lower interest rates they are charging lower interest rates doing something they're much better at then banks.
Hasa Diga Eebowai
does that now make me a bank?
im gonna apply to tarp
10 mil will be fine
also one of the worlds largest Media Company's
...in other words part of the problem.
Politics is for the present, but an equation is for eternity. Albert Einstein
the bill.
if anyone else who posts on this site has ever run a small business or even has the slightest idea how that actually works.
Hasa Diga Eebowai
Yup. I run a small business. In six years it's gone from me doing crappy corporate videos all by myself to now doing commercials for major companies like Target, American Eagle and Nautica. Of course, I'm an art school drop out who never took a business class in his life so I've made some financial mistakes along the way which I'm still recovering from but figuring it all out as I go along.
What's your reason for asking?
Hopefully humanity will one day learn to be humane.
your production equipment or did you lease-to-purchase it. If you didn't lease it you probably should have unless you had capital to spare. My point was that putting TARP money into leasing firms was a very good idea. If GE or anyone else is making money off this it can only mean that they backing good lease-purchases and that is a very good thing.
Hasa Diga Eebowai
I took out a bunch of loans early on which put me deep in the hole. Now, I'm finally at a point where I can fund growth through profits without a need for debt. It also helps that I have a very simple standard of living which makes it much easier to continually invest in my business.
Again, I agree with your premise that it is better than the bank bailouts. My issue is with the idea that GE needs taxpayer dollars. If they've made bad investment decisions too, why must we bail them out too?
http://www.businessinsider.com/sorry-ge-share...
You know much more about this than I do, so thanks for taking the time to explain it.
Hopefully humanity will one day learn to be humane.
as if they're getting money to cover bad deals. It looks more like new money to cover new deals. Money that wasn't available on the open markets due to the liquidity crisis. If they borrowing it, TARP or not, they much more likely to pay it back than the banks who are off loading their crap on the taxpayer. Thanks for asking. It gave me an excuse to sound off and maybe set the record straight. I'm also glad to see you're doing well. Running a business is a never ending learning experience isn't it?
Hasa Diga Eebowai
In that case, it sounds like GE is the only player in town willing to broker new deals and thus is in need of taxpayers to fund these deals.
So, either TARP should have been much more forceful about how banks could spend the money so that they would be made to do their job instead of just wasting money on gaining acquisitions and fattening up their bottom line; or none of these companies should have ever gotten a single penny of taxpayer dollars.
A while back I had Bank of America freeze my account for two months while I repaid a bill I was defaulting on. What is the purpose of treating these massive corporations any different from us little guys? If I screw up my business, it is me and only me who must fix it or another company with better management will move in and take my place. I do not expect, nor would I want to have non-consenting taxpayers bail me out. Just as with these banks, GE, the auto companies, airlines or any of the other industries protected by taxpayers, if they can't manage their businesses properly they should fold and let new businesses take their place. The need for capital won't go away just because a bank fails.
That is my problem with this whole thing. It's not that the GE bailout isn't better than the bank bailouts, it's that neither is right.
Thanks for your kind words too. It's funny, the current success of my business has a lot to do with the troubled economy. Many of the clients I've acquired in the past year used to go with the big bloated production companies. Now with all their cut backs they've opened themselves up to new blood. I've had clients calling me unsolicited that a year ago wouldn't allow my calls past reception. I've got two who are already talking about having me handle the majority of their media needs - basically replacing their ad agencies in many ways. Why? Because I deliver equally, if not better product then the big guys at a quarter the price am easier to work with and prompt.
Personally, that is why I think we need to let some of these big companies take it in the shorts and open the doors for a new way of doing things.
Hopefully humanity will one day learn to be humane.
I too am a low cost supplier. I've acquired new customers because of that. Business is not as good as it might be but it could have been a whole lot worse. I can respect your views re taxpayers money but it's not GE I care about. It's the people who can't find an affordable alternative to capital leasing companies for fleet replacement or new equipment financing. This is, in my opinion, a much better answer to the liquidity problems of small businesses than throwing money at nervous banks.
Hasa Diga Eebowai
Back in February Obama named Jeff Immelt CEO of GE to his new economic advisory board.
I work in the boating industry and GE is the only one providing financing to my dealers. Without them, I am screwed. At least GE is getting money back into the system, unlike many others taking free gov't money and hoarding it.
...but it's helping keep a lot of people in their jobs and receiving health insurance. If GE is forced to choose between its commerce and its financial divisions and they decide to spin GE Capital off, it could hurt a LOT of people.
Its easy to look at a company like GE and see only the greedy bastards at the top, but keep in mind that there are literally thousands - if not hundreds of thousands - of people working there, and GE Capital isn't just some small office.
As @empy notes above, the money GE's getting from this loophole isn't just lining upper managements pockets. It's keeping lower-middle and middle-class people in jobs, providing them health insurance and it's being used by consumers who get credit so they can buy stuff and by various industries to help keep them in business, so they can keep THEIR employees in their jobs (and, one can hope, providing *them* with health insurance, also.)
And, I think you all know that even if GE hadn't gotten anything from this loophole, Congress would STILL be withholding money from health care for the uninsured because - right or wrong - the conservatives can milk the whole "look how much the Democrats want to spend on SOCIALISM - WE'RE trying to save not just your money but our whole system of government!" angle for all it's worth.
GE owns MSNBC, MSNBC is Obama's mouth piece. How is any body surprised, he's just paying them back for their help getting him elected, and pushing his agenda. Obama has to pay back his "friends"
I....like the 60watt soft light kind in my clapper.
.
Not even close. That's Exxon Mobil you're thinking of, GE's down there around 10th.
one corporation is OK with Congress. But a trillion for health care for all of us is too much.
Something's gotta give and it ain't us this time.
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