Our Changing Globe

Posts Tagged ‘politics’

The top 10 recipients of the government’s $700 billion financial bailout plan (TALF) paid lobbyists around $9.5 million during the first three months of this year.

GM (General Motors Corp.) which just announced that it will most likely default on a $1 billion bond payment that’s due June 1, spent $2.8 million on lobbying in the first quarter of 2009.

GM has already received $13.4 billion in government loans and is pushing for an additional $5 billion.

Other bailout recipients that spent more than $1million in an attempt to influence future government decisions were;

• A.I.G – which has already received $70 billion
• Citigroup Inc. – 45 billion
• JPMorgan Chase & Co. – $25 billion
• Bank of America Corp., received $5 billion and spent $660,000 on lobbying which is 20% down from the last quarter of 2008.
• Wells Fargo & Company, $25 billion in bailout money, and $700,000 on lobbying.
• Goldman Sachs, received $10 billion and spent $670,000
• Morgan Stanley got $10 billion and spent $540,000
• U.S. Bancorp got $6.6 billion and paid out $170,000
• PNC Financial Services Group, received $7.8 billion and spent $135,000 which is almost double its last quarter’s lobbying costs.

The companies in question deny using bailout money for lobbying, but seven of them spent more attempting to influence the government than they did in the last quarter of 2008, and Craig Holman of the watchdog group Public Citizen said “It’s completely unjustifiable. They say they’re not using public money for these purposes, but in effect these companies are steering taxpayer funds to lobbying, and campaign contributions”, and added, “What AIG’s reporting is, in fact, influence peddling”.

Consumer confidence is important, but what should we believe when one headline tells us that, “The banks have enough cash”, whilst another screams, “Mortgage delinquencies among the most creditworthy homeowners rose by 50% last month”.

After Treasury Secretary Timothy Geithner said, “the vast majority of the nation’s banks have enough capital”, U.S. stocks advanced the most in almost two weeks, and Walter “Bucky” Hellwig, who helps oversee $30 billion at Morgan Asset said, “Geithner’s comments that most banks are OK got money coming back into stocks because that pretty much allays yesterday’s fears about stress tests and banks having to raise more capital”.

Even General Motors Corp. rose 2.4 percent to $1.70 after a government auditor said the Treasury will supply the automaker with $5 billion in additional aid.

Meanwhile, David Heupel, who helps manage $60 billion at Thrivent Financial for Lutherans said, “There are still signs of a tough economic environment, but companies that have really cut down their expenses are starting to see a little glimmer of life”.

The “tough economic environment” part of his comment would appear to be something of an understatement however, because the number of so-called prime borrowers who are at least sixty days behind on mortgages owned or guaranteed by Fannie Mae and Freddie Mac rose to 743,686 in January, from 497,131 in December, and that’s almost double the October total.

Fannie Mae and Freddie Mac who are the biggest U.S. mortgage-finance companies, either owning or guaranteeing 56% of all U.S. home loans, just announced that mortgage delinquencies among their “most creditworthy homeowners”, rose by 50% in just one month, and they blamed the fall on both drops in income and too much debt, with 34% of borrowers telling Fannie and Freddie that they were earning less money, and around 20% citing too much debt as their reason for missing their mortgage payments, with a further 8.1% blaming unemployment.