General Electric cuts of loans to Gun Shops: Was there Obama administration influence?

Given how closely General Electric is linked to the Obama administration and the massive government subsidies that it receives, why doesn't anyone in the media try figuring out if their refusal to give loans to gun companies is related to GE trying to please to the Obama administration.

General Electric Co.  is quietly cutting off lending to gun shops, as the company rethinks its relationship to firearms amid the fallout from the school shooting in Newtown, Conn. 

This month, Glenn Duncan, owner of Duncan's Outdoor Store in Bay City, Mich., said he received a letter from GE Capital Retail Bank in which the lender said it had made "the difficult decision" to stop providing financing services to his store. Other gun dealers have received similar notices. . . .

GM giving massive subsidies to try getting people to buy Volts

Remember the previous articles that GM was losing $49,000 per Volt that it sold?  Well, apparently that was an underestimate by about $10,000.  Remember that this car also gets a $7,500 tax credit from the government.  Of course, despite all these huge loses to GM and taxpayers, the Volt is essentially the same car as the gasoline powered Chevy Cruz and the 2013 Cruz starts (25/36 mpg) at about $17,130 ($18,225 with automatic), still than the Volt.  With a $10,000 discount and the $7,500 tax credit, the Volt still costs about $22,500.  

So, let's assume that the price of gas is $4.00 a gallon, that the difference in car prices between the Cruz and Volt is $4,000, that the Cruz gets 30 mpg (assuming half local and half highway driving), and that the Volt costs $.06 per mile (the middle point of the EPA estimates provided here).  The cost of the Cruz per gallon is thus about $.13 ($4/30) so the difference in cost per mile is $.073.  If the car is drive 12,000 miles each year, the savings would be $876 ($.073*12,000).  Even assuming no interest costs, it would take 4.6 years to pay off the $4,000 higher price for the Volt (the difference is actually more than that, especially if you add in the higher sales tax).  Without the $10,000 additional subsidy, it would take 16 years to pay off the higher price for the Volt.  Are you really planning on owning the car for 16 years?  This of course ignores the cost of replacing the batteries and the higher insurance costs for the Volt.

From Fox News:

General Motors rolled out the Chevrolet Volt two years ago with lofty sales goals and the promise of a new technology that someday would help end America's dependence on oil. 

So it seemed like a good thing in August when sales of the $40,000 car set a monthly record of 2,800. But a closer look shows that things aren't what they seem for the cutting-edge car. 

Sales rose mostly because of discounts of almost $10,000, or 25 percent of the Volt's sticker price, according to figures from TrueCar.com, an auto pricing website. Other pricing services gave similar numbers, and dealers confirmed that steeply discounted Volts are selling better than a few months ago. 

GM's discounts on the Volt are more than four times the industry's per-vehicle average, according to TrueCar estimates. Edmunds.com and J.D. Power and Associates say they're about three times the average. Discounts include low-interest financing, cash discounts to buyers, sales bonuses to dealers, and subsidized leases. 

Americans have been slow to embrace electric cars. But the Volt's August sales show they're willing to buy if prices are low enough. . . .

Sales of 2,800 in a month when some of those sales are to the government and to GE, which is trying to curry favor with the government, does not signal people are "embracing" the Volt.

These screen shots were taken today (9/24).  BTW, the Eco version gets 28/42 mpg and still only costs about $19,680.

Obama subsidizing Early Retiree Health Coverage at profitable companies

Why you would want to subsidize companies is beyond me. Why you want to subsidize GE after all the other government subsidies that it is gotten is a mystery. If companies don't want to continue this program because of all the government regulations, possibly the direct approach would be to get rid of those regulations.

The Early Retiree Reinsurance Program was created by the federal health care law passed by Democrats and signed by President Obama last year. The purpose was to encourage employers not to drop health coverage of early retirees before some of the key provisions of the health care law take effect in 2014.
But much of the money has gone to some big-name companies and organizations, including more than $200 million for the United Auto Workers, $140 million for AT&T and $91.7 million for Verizon.
And General Electric, which made news this week for not owing federal taxes on $14.2 billion in profit, got $36.6 million through the retiree program.
"How can you justify giving out so much of taxpayers' money to these profitable corporations?" Florida Rep. Cliff Stearns said at a legislative committee hearing Friday in questioning Steve Larsen, a senior director at the Centers for Medicare & Medicaid Services, which runs the program. . . .

The Biggest wealth transfer of all time

GE gets secret bailout money from the government and then runs positive news coverage on the Obama administration without mentioning the conflict. From the front page of the Washington Post:

. . . the Federal Reserve rushed trillions of dollars in emergency aid not just to Wall Street but also to motorcycle makers, telecom firms and foreign-owned banks in 2008 and 2009.

Fed's efforts to prop up the financial sector reached across a broad spectrum of the economy, benefiting stalwarts of American industry including General Electric and Caterpillar and household-name companies such as Verizon, Harley-Davidson and Toyota. The central bank's aid programs also supported U.S. subsidiaries of banks based in East Asia, Europe and Canada while rescuing money-market mutual funds held by millions of Americans.

The biggest users of the Fed lending programs were some of the world's largest banks, including Citigroup, Bank of America, Goldman Sachs, Swiss-based UBS and Britain's Barclays, according to more than 21,000 loan records released Wednesday under new financial regulatory legislation. . . .

"The American people are finally learning the incredible and jaw-dropping details of the Fed's multitrillion-dollar bailout of Wall Street and corporate America," said Sen. Bernard Sanders (I-Vt.), a longtime Fed critic whose provision in the Wall Street regulatory overhaul required the new disclosures. "Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions."

The Fed launched emergency programs totaling $3.3 trillion in aid, a figure reached by adding up the peak amount of lending in each program.

Companies that few people would associate with Wall Street benefited through the Fed's program to ease the market for commercial paper, a form of short-term debt used by major corporations to fund their daily activities.

By the fall of 2008, credit had frozen across the financial system, including the commercial paper market. The Fed then purchased commercial paper issued by GE 12 times for a total of $16 billion. It bought paper from Harley-Davidson 33 times, for a total of $2.3 billion. It picked up debt issued by Verizon twice, totaling $1.5 billion. . . .

The data revealed that the Fed continued making purchases into the summer of 2009 - after the official end of the recession - showing that it was still concerned about a fundamental part of the financial system even as economic growth was returning. . . .

Foreign-owned banks also benefited from the Fed's commercial-paper facility. The Korean Development Bank, owned by the South Korean government, used the program to the tune of billions of dollars, including a $407 million short-term loan on a single day. Many foreign banks, including the French BNP Paribas, the Swiss UBS and the German Deutsche Bank, took extensive advantage of various programs. Even a major bank in Bavaria benefited, as well as another one headquartered in Bahrain, a tiny island country in the Middle East.

Another Fed program allowed investment banks for the first time to borrow directly from the Fed as officials sought to stem the panic that had taken down Wall Street titan Bear Stearns. The central bank assisted 18 companies through this program. Among the biggest beneficiaries was Citigroup, which in a single day in November 2008 borrowed $18.6 billion from the Fed.

The data also demonstrate how the Fed, in its scramble to keep the financial system afloat, eventually lowered its standards for the kind of collateral it allowed participating banks to post. From Citigroup, for instance, it accepted $156 million in triple-C collateral or lower - grades that indicate that the assets carried the greatest risk of default. . . . .

From the Financial Times:

Foreign banks were among the biggest beneficiaries of the $3,300bn in emergency credit provided by the Federal Reserve during the crisis, according to new data on the extraordinary efforts of the US authorities to save the global financial system. . . .

Barclays was the biggest cumulative borrower from TAF. The UK bank, which bought the US operations of Lehman Brothers out of bankruptcy in September 2008, borrowed a cumulative $232bn from the TAF through various subsidiaries.

Bank of Scotland and RBS of the UK, Société Générale of France, Dresdner Bank and Bayerische Landesbank of Germany, and Dexia of Belgium were all among the top 10 cumulative users of TAF. At any given time, these borrowers owed less than the total amount because the short-term loans were extended after they expired. . . .

Some of the beneficiaries:

New documents show that the most loan and other aid for U.S. institutions over time went to Citigroup ($2.2 trillion), followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bear Stearns ($960 billion), Bank of America ($887 billion), Goldman Sachs ($615 billion), JPMorgan Chase ($178 billion) and Wells Fargo ($154 billion). . . .
Foreign banks also benefited from the Fed's aid. They included Swiss bank UBS, which borrowed more than $165 billion, Deutsche Bank ($97 billion) and the Royal Bank of Scotland ($92 billion).
Many of the individual loans the banks took were worth billions and had short durations but were paid back and renewed many times.
Among the largest recipients were foreign central banks, such as the European Central Bank, Bank of England and the Bank of Japan. They borrowed huge amounts of dollars from the Fed to assist their own banks.
The documents are a reminder of how crippled the financial system had become during the crisis and how much it's recovered since. Banks earned $14 billion from July through September this year. . . .
Big U.S. and foreign banks made repeated use of the programs. Bank of America, for instance, took out 14 loans worth $15 billion each under the Fed program that provided short-term loans. The loans were repaid after either one month or three months. The last was repaid by July 2009.
Barclays, a British bank, tapped the same facility 49 times. Its individual loans ranged from $300 million to $15 billion. Citigroup used the program 26 times.
The documents help illustrate the global scope of the crisis. The Federal Reserve provided credit lines to some of the largest central banks overseas: The European Central Bank took $8 trillion in temporary credit lines, while the Bank of England took $918 billion. That credit ensured that overseas markets wouldn't freeze for a lack of U.S. dollars, the global reserve currency. . . .

Unfortunately, the Fed is refusing to release data on everything that they have done with the money. Another reason for Ron Paul's auditing the Fed bill?

The Federal Reserve withheld details on individual securities pledged as collateral by recipients of $885 billion in central bank loans, denying taxpayers a measure of the risks they faced from its emergency aid. . . .

Is it really appropriate for the White House to call up the heads of TV Networks' parent companies to lobby for TV time for President?

This is one reason that the Federal government should not be giving large amounts of money to GE and other companies. Surely it seems like there is pressure and a possible connection between the aid and the granting of TV time. From Howard Kurtz at the Washington Post:

In the days before President Obama's last news conference, as the networks weighed whether to give up a chunk of their precious prime time, Rahm Emanuel went straight to the top.

Rather than calling ABC, the White House chief of staff phoned Bob Iger, chief executive of parent company Disney. Instead of contacting NBC, Emanuel went to Jeffrey Immelt, the chief executive of General Electric. He also spoke with Les Moonves, the chief executive of CBS, the company spun off from Viacom.

Whether this amounted to undue pressure or plain old Chicago arm-twisting, Emanuel got results: the fourth hour of lucrative network time for his boss in six months. But network executives have been privately complaining to White House officials that they cannot afford to keep airing these sessions in the current economic downturn.

The networks "absolutely" feel pressured, says Paul Friedman, CBS's senior vice president: "It's an enormous financial cost when the president replaces one of those prime-time hours. The news divisions also have mixed feelings about whether they are being used."

While it is interesting to see how a president handles questions, Friedman says, "there was nothing" at the July 22 session, which was dominated by health-care questions. "There hardly ever is these days, because there's so much coverage all the time." . . . .