Tales from Bailout Nation Pt. XXVII

...and like that, it's gone.

The special inspector general for the Troubled Asset Relief Fund (TARP) has reported that the Treasury Department’s initial estimates of the cost of the American International Group bailout are likely too low, according to Bloomberg. In a report on Tuesday, Neil Barofsky said the government’s latest projection of a $5 billion loss on AIG’s TARP investment “represents a dramatic shift from the $45 billion loss that Treastury had projected in its AIG investment just six months earlier.”

Barofsky acknowledged that there has been improvement in the situation over the past six months, but said the dramatic revision was likely more a product of “a change in Treasury’s methodology for calculating the loss,” and called the discrepancy a “serious question.” However, a Treasury official defended the estimate and insisted that the methodology has remained consistent, clashing with claims from the watchdog that the latest estimate “fails to meet basic transparency standards,” for withholding information about a new calculation protocol. The Treasury official said the lower loss estimate treats the government’s AIG position like common stock due to recent a recapitalization transaction announcement.

$40 billion makes like Keyzer Soze.

You wouldn't be blamed one bit for thinking no one knows what the hell is happening here and also thinking this stinks to high heaven.

Barofsky has appeared to be a stand-up guy in watch-dogging Bailout Nation so if we are taking any sides in this, it's got to be his.

Apply Occam's razor: if General Motors can simply draw from a seperate line of TARP credit and apply it to original TARP loan and then lie about it claiming the retirement of that debt was from sales revenue, what's to prevent the Treasury-AIG partnership from engaging in similar shenanigans?

Given their track record why should we believe them?

Instead of scolding the electorate or opining that voter frustration is due to poor "salesmanship", perhaps this country's electoral leadership should look at the fact that they have exercised such malfeasance and have done so in such a dishonest fashion that the country's default position on everything they do and say is... You Lie!

We'll trust the eye candy, thank you.

In less than a year, General Motors Co. has roared back from bankruptcy to a quarterly profit. Now comes the hard part: Sustaining the income and repaying billions of dollars in government aid.

There are signs that GM is on track to do just that. Revenue is up 40 percent over the first quarter of last year. U.S. sales rose 17 percent for the quarter, and the automaker made an operating profit in North America, which had been a cash incinerator. Units in Asia and Latin America posted strong numbers, too.

As a result, the automaker announced Monday, its net income rose to $865 million, a dramatic reversal from the $6 billion the company lost in the same period last year.

"Today's news was wonderful, and even better than we ever expected to be this far in the post-restructuring period," said Steven Rattner, former head of the Obama administration's Auto Task Force.

And we should believe all this because..? GM had no problems last month trotting out their CEO and flat-out lying to the American public regarding the true nature of Government Motor's claim they had repaid, in full, their share of the TARP bailout loan (they simply used another line of TARP credit to do so).

We note that an earlier version of this story from yesterday morning failed to point this out so we give credit to this version for broaching it... sort of.

Some experts were skeptical. James Schrager, professor at the University of Chicago Graduate School of Business, said GM has a history of making boastful claims, only to disappoint. A recent television ad in which CEO Ed Whitacre declared that the company had repaid its government loans in full, with interest, was misleading, he said.

(italics, ours)

It was not misleading in any way. It was a flat-out lie.

To a larger point, though, when the government owns 61% of GM stock and was caught red-handed cooking the books, what exactly does turning a profit of $865 million mean? And probably more germane to this exercise, when that same government that owns GM can print money to its heart's content, of what real significance and meaning are balance sheet losses?


P.S. Stever Rattner, who wrote one of the most self-serving articles we've ever read, will be penning a book on how Team Obama rescued General Motors. To say his book will lack credibility is to understate things a tad.

Liar

KT has an excellent piece here comparing the frantic push by the President and his supporters for Obamacare to the disastrous Nivelle offensive of World War I (in fairness to both President Obama and the CinC of the French Army, Robert Nivelle, disastrous doesn’t begin to describe either of their actions). Obama has staked his entire presidency on the passage of this bill and with that riding on it comes some entirely predictable results:

How do we know the President is all in and all in to the exclusion of any rationality and truthfulness? When he starts spewing crap like this.






3,000? 3,000 percent…… ?!

Good things are in store for all Americans with respect to pending health care reform when its biggest cheerleader doesn’t pretend anymore to give lip service to facts but instead just starts making shit up off the top of his head when speaking in public.

Your legacy, sir.




Follower update: American Daily Conservative, Left Coast Rebel and Carol are all in the house. Special shout-out to Carol who with her husband, Gary, is doing the Lord's work with orphans over in Lithuania.

The Friday Evening Dump

(one in a weekly series intended to shine some light on unsavory news being jettisoned from the White House and Capitol Hill right before the weekend)

Hey, do you remember when they told us that if we voted for McCain, it would mean that our health care benefits would be taxed? Well, it looks like they may be right.

The campaign ad was ominous: "John McCain would make you pay income tax on your health insurance benefits. Taxing health benefits for the first time ever."

So warned candidate Barack Obama less than a year ago. In ads and speeches, Obama went on to predict the horrific fallout of McCain's proposal: financial hardship and millions dumped from employer-provided health plans.

Today(ed.: Friday, June 10), spokesmen for President Obama are saying a tax on employer-provided health benefits wouldn't be such a bad thing after all.

Roughly 163 million Americans receive health insurance through their employer. While actually a form of compensation, the value of the employer's contribution to that insurance is not taxed under the federal income or payroll taxes.

So, in addition to being a hypocrite, Obama is only being as nefarious as McCain in implementing this effective tax hike, which if executed on a wholesale basis would result in a tax increase of $2.3 trillion over 10 years for all Americans who receive employer-based health care, right?

Uhhh… not quite. The McCain taxing of health care benefits was to shift the overall health care obligation from the employers to more of a free-market approach whereby individuals and families would be given vouchers funded by the tax to shop around for health care.

The Congressional plan that is doing the heavy lifting for the President is in a mad scramble to raise the $1 to $2 trillion of jack that will be needed to fund his “public option”. Just a little different, wouldn’t you say?

But since a tax on everyone’s health insurance plan is most likely a political non-starter, Congress will probably focus their tax sights on just the most generous of benefit plans. We’re looking at you, middle class.

Unfortunately, this elimination of tax exemption for just the above-average value health plans won’t nearly raise the amount of money to fund the public option. Investor Business Daily surmises only $165 bil will be raised in this manner so Congress will be required to root around and about for additional, ahem, revenue streams. Anyone up for a payroll tax, a value-added tax… an income tax surcharge?

Such wonderful news in the midst of the worst economy since the Great Depression, we’re sure you would agree.

Oh, and dig this, courtesy Innocent Bystanders