bailout

In the grand old days before the Irish real estate boom collapsed, the ruling Fianna Fáil party used to campaign the fun way. Infamously, the party held blowout fundraisers every year in a tent at the Galway races. Bankers and property magnates would show up, caked in bling, surrounded by attractive young women and occasionally even their wives, and get drunk with their elected representatives and regulators. 

The automobile magazine Motor Trend has awarded the Obama-approved, government-subsidized Chevrolet Volt its annual "Car of the Year" appellation, reports MSNBC:

Motor Trend says the Volt has some of the most advanced engineering ever seen in an American car. The Volt can run up to 50 miles in pure electric mode before a backup gas engine kicks in to give it more range.

Andrew Ross Sorkin has a very interesting column this week examining the signal sent by GM’s purchase of AmeriCredit.  The short answer: GM looks like it’s trying to revive the old patterns of demand before the recession.  It’s doing so by following some of the same business practices that led to its bankruptcy filing last summer.

Since 2008, the federal government and the Federal Reserve have spent some $3 trillion to secure the financial system and prevent a second Great Depression. What did all this money buy us? A really expensive life jacket.

Before he started the late New York Sun, Ira Stoll had a great blog called Smartertimes.com, in which he pointed out the Gray Lady's errors, inconsistencies, and absurdities on a regular basis.

Former President George W. Bush recently gave a speech before a business group meeting in Houston, Texas. In the speech, he explained how he came to endorse bailouts for financial companies, auto companies, etc., toward the end of his term. He said that his personal inclination was to avoid bailouts – that if people or companies do imprudent things they need to suffer the consequences – including bankruptcy. He felt our system depended on that.

I’m confident there’s a stronger intellectual case against the Greek bailout than conventional wisdom acknowledges. And I suspect the issue will have more political resonance than many insiders expect.

Here’s Mike Pence’s effort to save us from another bailout:

Financial regulatory “reform” has been wending its desultory way through Congress for quite a while, and one can lose track of where things stand and what’s important.

My eyebrow rose last week when I read that GM CEO Ed Whitacre's Wall Street Journal op-ed was titled "The GM Bailout: Paid Back in Full." This isn't true--GM may have paid off loans from the federal government, but the Treasury is still GM's majority shareholder, at a cost of about $50 billion. That money won't be recouped (at a probable loss) until GM goes public. Wall Street Journal headline writers: The GM bailout is not paid back!

Treasury secretary Timothy Geithner was president of the New York Federal Reserve when the government nationalized insurance giant AIG and paid counter-parties to the company's credit default swaps 100 cents on the dollar. That was in 2008. In January 2010, taxpayers have poured $180 billion into AIG (so far!) and Congress has uncovered evidence that the Fed did not disclose the full details of its interactions with AIG counter-parties such as Goldman Sachs. Here's GOP congressman Darrell Issa of California in the Washington Examiner:

Many financial experts expected AIG to negotiate with the counterparties for a discounted rate, thus achieving the best possible deal for U.S. taxpayers.  Instead, the New York Fed arranged to pay full price in what amounted to a backdoor bailout of large financial companies.  Aware that the bailout details would anger taxpayers, the Fed applied pressure on AIG to keep the details quiet and out of all SEC filings

Evidence obtained by the House Oversight and Government Reform Committee now demonstrates that officials at the New York Fed ordered AIG officials not to disclose details about the decision to pay the counterparties the full price.

To facilitate the cover up, the Fed instructed the Special Investigator General for the Troubled Asset Relief Program (SIGTARP), Neil Barofsky, not to release documents to the Committee that would aid an ongoing investigation.

Geithner went to the Hill this morning to answer questions about AIG. Needless to say, the meeting wasn't amicable. Geithner is a lot more comfortable around rich bankers than he is around the people's representatives.