Kevin Colby: News, culture, political blog

GMAC Financial Services is a global finance company operating in and servicing North America, South America, Europe and Asia-Pacific. It was founded in 1919 as a wholly-owned subsidiary of General Motors, Corp. In November of 2006 Cerberus Capital Management, a private firm, and a handful of partners purchased a controlling 51% interest in GMAC. GM continued to hold the remaining 49% ownership stake. But in late December 2008, when GMAC began to participate in the Treasury Department’s bailout of the financial sector, Cerberus reduced its ownership in GMAC by distributing shares of the company to its co-investors. This enabled Cerberus to avoid becoming a bank holding company, which would have brought the company under greater federal oversight.

Under Treasury’s Troubled Asset Relief Program (TARP), GMAC received $5 billion in exchange for preferred stock and warrants. In addition, Treasury agreed to lend GM up to $1 billion so it could participate in a rights offering at GMAC as it reorganizes into a bank holding company.   In January GM made use of that loan, using $886 million to increase its ownership stake in GMAC to just under 60%.

According to Forbes, GMAC is the country’s fourth largest private U.S. company. Among all U.S. companies, Fortune lists GMAC as the country’s 78^th largest.  GMAC is the sponsor of one of college football’s annual bowl games. Fortune also ranks GMAC as among the biggest financial losers (based on 2007 financials) of the Fortune 500. Early this year GMAC posted a $7.46 billion profit after five straight quarters of posting a loss. In the fall of 2008, due to low cash reserves, GMAC was forced to choose between financing GM dealerships’ operating expenses and financing car loans for vehicle purchases. GMAC chose to support the dealerships and for a time did not write any car loans. The company has since resumed financing car loans. At least one analyst believes the U.S. auto industry might be better off if a company like GM were to declare bankruptcy.

?Financial Documents

2008 GMAC 10K (Annual Report)

2-02-2009 GMAC 8K

1-21-2009 GMAC 8K

1-16-2009 GM Purchases GMAC Shares 8K

9-30-08 GMAC 10Q

6-30-08 GMAC 10Q

3-31-08 GMAC 10Q

2007 GMAC 10K (Annual Report)

?Federal contracts

No federal contracts located (last accessed 03/04/2009).

?Lobbying reports (if any)

GMAC | Sidley Austin |

?Political Contributions

Center for Responsive Politics (last accessed 03/04/2009)

?Related Articles

March 4, 2009 February Light-Vehicle Sales Slip (Barron’s)

March 4, 2009 Suzuki dealer ends financing with GMAC (Huntsville Times)

March 3, 2009 Auto Sales: Worst February in 40 Years (BusinessWeek)

March 3, 2009 TALF’s Terms Bring Little Relief To Struggling Auto Makers (CNNMoney)

February 12, 2009 GM talking with China’s SAIC to raise cash (Reuters)

February 10, 2009 GM bankruptcy could speed restructuring - analyst (Reuters)

February 9, 2009 Fed Needs to Stop Approving (Goofy) Bank Holding Companies (Seeking Alpha)

February 9, 2009 GMAC steps back from the brink (Automotive News)

February 6, 2009 Can The TALF Save Detroit? (Forbes)

February 6, 2009 Fitch puts auto floorplan notes under review (MSNMoney/AP)

February 3, 2009 UPDATE 3-GMAC has $7.46 bln profit, main units still in red (Reuters)

February 3, 2009 GMAC posts profit, but main units lose money (Financial Post)

February 3, 2009 GMAC auto finance business loses $1.31 billion (Automotive News)

January 24, 2009 GM gets $884 million for GMAC restructuring plan (The Windsor Star)

January 23, 2009 GM Increases GMAC Stake to Near 60% (TheStreet.com)

January 2, 2009 U.S. throws GMAC $6 billion lifeline (CNNMoney.com)

December 31, 2008 Bailout Trims Cerberus’s GMAC Stake (Wall Street Journal)

December 29, 2008 GMAC Receives $5.0 Billion Investment from the U.S. Treasury (press release)

December 24, 2008 GMAC - Fed opens door to bailout funds (CNNMoney)

Information obtained from Taxpayers for Common Sense

General Motors Corporation (GM) is a U.S.-based automobile manufacturer, founded in 1908 and headquartered in Detroit, Michigan. GM is the world’s second largest automaker. It manufactures its vehicles in 34 countries around the globe, and sells and services vehicles in 140 countries. The company employs approximately 252,000 people. The company sells cars under the Chevrolet, Buick, Saab, GMC, Pontiac, Cadillac, Hummer, and Saturn, Opel, Vauxhall, Isuzu, Holden, and Daewoo brands. The company also has nearly 7,000 auto dealers in the U.S.

In addition, General Motors holds a 49% share in GMAC Financial Services. GMAC was previously a wholly-owned subsidiary of GM, until 2006 when it sold a majority share to Cerberus Capital Management for $14 billion.

General Motors has received $14.3 billion in Troubled Asset Relief Program (TARP) funds. This includes an $864 million loan, and stock exchanges of $4 billion on December 31, 2008, $5.4 billion on January 21, 2009, and $4 billion on February 17, 2009.

The company’s restructuring plan, which was required as a condition of the receipt of federal bailout dollars, indicates that General Motors will need as much as $16.6 billion additional federal dollars to return the company to solvency.

Information was obtained from Taxpayers for Common Sense.

After reporting a $61.7 billion quarterly loss – the biggest single quarter loss ever – in early March AIG asked for and was granted an additional $30 billion from the federal government. The following day Federal Reserve Chairman Ben Bernanke expressed his anger at the way the company had exploited loopholes to get into its current financial situation.    According to Bernanke, “A.I.G. exploited a huge gap in the regulatory system. There was no oversight of the financial products division. This was a hedge fund, basically, that was attached to a large and stable insurance company.” And this quasi-hedge fund, Mr. Bernanke went on, to nobody’s surprise, made irresponsible bets and took huge losses.

American International Group, Inc. (AIG) is a holding company which, through its subsidiaries, is engaged in a range of insurance and insurance-related activities in the United States and abroad. AIG’s primary activities include both General Insurance and Life Insurance & Retirement Services operations. Other significant activities include Financial Services and Asset Management. AIG’s major product and service groupings are General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. Through these operating segments, AIG provides insurance, financial and investment products and services to both businesses and individuals in more than 130 countries and jurisdictions. In September 2008, AIG sold its 50% stake in London City airport. In December 2008, AIG’s United States life insurance companies sold its residential mortgage-backed securities portfolio to Maiden Lane II LLC. The company was founded in 1967 and is based in New York, New York. According to Fortune 500’s annual list, AIG was the 13^th largest of all corporations in America in 2008, and was the 2^nd largest among property and casualty insurance companies that year.

In late November 2008, AIG announced its participation in the Treasury Department’s Troubled Assets Relief Program (TARP). Under the program AIG received $40 billion from Treasury in exchange for preferred stock and warrants. Only Bank of America and Citigroup have received more money from TARP.

A recent analysis by the group tasked with overseeing the use of TARP funds, the Congressional Oversight Panel (COP), concludes that AIG received much more in federal government support than the initial $40 billion infusion. According to the report (.pdf – table, p. 7), the government received AIG assets worth only $14.8 billion – a 63 percent subsidy based on the government’s $40 billion payment to the company. Separately, AIG received $110 billion in support from the Federal Reserve Bank of New York.

Recently the company withdrew as a member of the U.S. Climate Action Partnership, a group pushing for implementation of a cap and trade system to reduce greenhouse gas emissions. Critics said the company should not be using taxpayer money to advocate public policy. The company also will let expire its sponsorship of British soccer powerhouse Manchester United. Under the deal, AIG reportedly paid about $19 million per season to have its logo on the team’s jersey.

?Financial Documents

2008-11-25 AIG 8K

AIG Solution Agreement

2008-09-30 AIG 10Q

AIG Proxy

2007 AIG Annual Report

2007 AIG 10K

?Federal contracts

USAspending.gov (last accessed 02/10/2009)

?Lobbying reports (if any)

AIG | Akin Gump Strauss Hauer & Feld | Angus & Nickerson | DC Navigators | DLA Piper | The Nickles Group | Ogilvy Government Relations | Sonnenschein Nath & Rosenthal

?Political Contributions

Center for Responsive Politics (last accessed 02/10/2009)

?Related Articles

March 3, 2009 Bernanke Says Insurer AIG Operated Like a Hedge Fund (Bloomberg)

March 3, 2009 AIG’s Black Box (Wall Street Journal)

March 3, 2009 Fed Chief Says Insurance Giant Acted Irresponsibly (NY Times)

March 2, 2009 A.I.G. Reports Loss of $61.7 Billion as U.S. Gives More Aid (NY Times)

February 10, 2009 Selling AIG to Scarce Buyers Is Mission Impossible for Reynolds, (Bloomberg)

February 9, 2009 AIG Received Added Subsidy in TARP Spending, Panel Says (TradingMarkets.com)

February 9, 2009 AIG Consumer Lender Rating Downgraded to Junk by S&P (Update2) (Bloomberg)

February 6, 2009 AIG and Citi deals gave Treasury least value (Reuters)

February 6, 2009 AIG Withdraws From US Climate Action Partnership (CNNMoney.com)

February 6, 2009 Dim future outlook for American International Group, Inc. (NYSE:AIG) (hotStocked.com)

February 5, 2009 AIG unit took added risks in sideline business: report (Reuters)

January 21, 2009 AIG ends soccer sponsorship (CNNMoney.com)

Information was obtained from Taxpayers for Common Sense.

What the hell is wrong with her?  Hillary Clinton has pledged $900 million to war torn Gaza. The last time I checked Israel bombed their ass.  I love how the fact we have $900 million  just to piss away on some bullshit terrorist country.  So where are we going to get this money?  Well how about this story

Northern Trust — the bank that got caught last week for throwing a series of lavish parties and concerts in L.A. — is giving back the $1.6 billion in federal bailout money!

But here is the true story about Northern Trust which is a bank based out of Chicago.

It received $1.6 billion under the government’s $700 billion Troubled Asset Relief Program (TARP). According to the bank, it did not seek TARP assistance, but it agreed to participate in the program at the request of the Treasury Department. The TARP funds were essentially forced on Northern Trust. Northern Trust has made it clear in corporate statements that TARP “funds are not allocated to operating expenses, including marketing, advertising, corporate sponsorship or charitable activities.”

Back in the fall of 2007, the bank signed a five-year contract to sponsor the Northern Trust Open, which is a PGA tour event. We are talking about a year before TARP even existed, okay folks? On February 19th-22nd .. just last week .. the bank held its second annual golf tournament. Phil Mickelson won, for anyone that cares. The event included parties and concerts and goody bags from Tiffany’s. Does it look bad? Yeah. But is that the whole story? Of course not.

Then comes John Kerry, Barney Frank and the rest of the wealth-envy crowd. They are upset with the “extravagant spending practices of U.S. banks” that receive taxpayer money. John Kerry actually pulls out this line, “Americans who play by the rules are losing their jobs and struggling to pay their mortgages … It’s an embarrassment that this legislation is necessary, but some companies clearly need a reality check to get their priorities straight so taxpayer money is used to get their house in order and not to pay for lavish parties.”

But now, under pressure, Northern Trust CEO Frederick Waddell sent a letter to members of the House Financial Services Committee, saying his bank will repay the government funds “as quickly as prudently possible.”  I would send a check back in an envelope that says: You can stick this up your fat slobbering ass Barney.

An interesting article by Herman Cain:

A National Bad Attitude

Consistent bad news will eventually lead to a bad attitude, and a bad attitude leads to failure. Just ask any high achiever in business, sports or any endeavor of life.

Since the summer of 2008, we have been fed a constant diet of more and more bad news about the economy, the credit crisis, the housing crisis, the recession, political scandals, a dysfunctional federal government, crooked politicians, crooked lenders, crooked borrowers and crooked executives.   Read the full story.

The First Bancorp, Inc., is the bank-holding company for The First, N.A., with headquarters in Damariscotta, Maine. The First Bancorp, Inc., was known formerly as First National Lincoln Corporation. First Bancorp operates 14 offices in coastal Maine. In early January First Bancorp began participating in the Treasury Department’s Capital Purchase Program. Under the program the company received (pdf) $25 million from Treasury in exchange for preferred stock and warrants.

?Financial Documents

2009-01-09 The First Bancorp 8K

2008-09-30 The First Bancorp 10Q

2007 The First Bancorp Annual Report

2007 The First Bancorp 10K

?Federal contracts

No federal contracts located.

?Lobbying reports (if any)

No lobbying documents located.

?Political Contributions

No political contributions located.

?Related Articles

January 21, 2009 The First Bancorp Reports Record Results for 2008, Up 7.5% Over 2007 (Yahoo Finance)

December 29, 2008 The First Bancorp Shareholders Approve Preferred Stock Issuance for U.S. Treasury Investment (Yahoo Finance)

December 4, 2008 First Bancorp To Receive $25 Million Under Treasury Program (TradingMarkets.com)

Information was obtained from Taxpayers for Common Sense.

Interesting articles by Herman Cain:

It’s the Political Stimulus

This extended celebration of President Obama’s official move into the White House, plus the current economic crisis, has given the Democrats in Congress a convenient cover to try to steamroll their long-awaited list of socialist policies and pet pork projects into law. In the process, we the people get the shaft again.  Read the full story.

Obama: Right Inspirational Style, Wrong Signals

When we get past the historical significance of President Obama’s political victory, and we get past the rightly deserved celebrations, there are some themes spoken by now-President Obama that are beginning to cause me great concern for the future of our country. Read the full story

Who Cares About $350 Billion?

An awful lot is going on that can distract our attention from the fact that the federal government is about to allocate $350 billion that may accomplish nothing whatsoever. Read the full story.

Some great articles from Taxpayers for Common Sense:

No Time for Partisanship

With our national economy on the ropes and job losses skyrocketing, the House of Representatives this week passed the $819 billion economic stimulus legislation. It is the largest stimulus legislation in U.S. history and passed without one Republican vote.

The one point of political consensus is that we have huge problems in our economy. And there is some agreement that our nation’s deteriorating economic condition means Congress must quickly move to reduce the impact of the deepening recession. But the agreement ends there. The partisan bickering this week has instead centered on what is the best type of stimulus—increased government spending or tax cuts. This controversy stems from principled beliefs on both sides. But too often, politics eclipse principles, and important policy debates become focused on rhetorical points instead of making the best decisions.  Read the full story.

Stimulus Aid to States: Some Room for Improvement

States are struggling in the current recession, and unlike the federal government, most are required to balance their budgets.   Consequently the House stimulus package includes a chunk of federal aid for state governments. Examples include picking up more of a state’s Medicaid tab, increased funding for state and local law enforcement, provisions for the federal government to bear a larger share of bridge and highway repairs and construction, and a new $79 billion pot of money for state and local governments called the State Fiscal Stabilization Fund. Additional provisions that are intended to create jobs and jump start parts of local economies could also indirectly help states’ bottom lines, according to proponents. In all, the National Governors Association estimates that $318 billion of the $825 billion stimulus bill is directed at state and local governments.  Read the full story.

Clean Coal Gets Boost in House and Senate Stimulus Bills

Both the House and Senate included increase for clean coal technologies in their stimulus bills. The House provided $2.4 billion for carbon capture and storage technologies and the Senate provided $4.6 billion for fossil fuel energy research and development. Of the $4.6 billion, the Senate earmarked $2 billion for one or more near zero-emissions power plants which use carbon capture and storage. This sounds similar to the FutureGen project DOE recently abandoned because of massive increases in cost. The Senate also earmarks $1 billion for the Clean Coal Power Initiative with the remainder allotted for carbon capture and sequestration projects.  Read the full story.

Bank Bailout: GAO to Treasury Department – More Effort Needed

The U.S. Government Accountability Office has just released its second report on the progress of the Treasury Department’s in implementation of the Troubled Asset Relief Program (TARP). Out of a possible $700 billion to be allocated under the program, about $294 billion had been distributed as of January 23, 2009, according to the report.  Read the full story.

Some interesting articles to read:

A tax cheat has become our Secretary of the Treasury. Tim Geithner, the man behind the “Troubled Asset Relief Program.”   And then the government wonders why it can’t keep track of the money that it has sent to banks that us taxpayers had to bailout or else our whole economic system would explode.  Yeah, it’s working really well now isn’t it.

Now, if Geithner was a Republican in the Bush Administration, do you think that the Liberal media and the Democrats would have let him off the hook?   We have an economic crisis, so we’re told that its just fine if we have a tax cheat running the department that includes the Internal Revenue Service.  So if we have crooks running the IRS, tell me, where is the change?