I really want to encourage people to consider what your news organization or pundit is saying and who is giving REAL news. The US is captured by corporate interest and that includes media and sadly, the once great National Public Media is now trash.....Wall Street all the time!
Our NPR programming just finished a story of financial justice with the auto industry paying off its bailout and now free to act as a economic engine for US workers. As you see below, the story is neither. Should US workers be glad that the auto industry did not go out of business? Did it really need to or was that just a way to break the auto industry unions? THAT'S WHAT IT WAS ALL ABOUT! Remember, auto sales were so bad because of the massive financial fraud that brought down the economy and when we were told Wall Street would not 'loan' money to the auto industry to help weather the crisis, we ask ----WHY DID THEY NEED A LOAN WHEN IT WAS THE FINANCIAL FRAUD THAT BROUGHT THEM DOWN? It is the same as the gas prices that drained the profits of airlines for a decade as speculators took prices sky-high everyone knowing it was illegal market manipulation. Was it just a way to move the airline industry into bankruptcy to shed all of union wages and benefits, because as we know, now that all the airlines have gone through bankruptcy we haven't seen gas prices like that and airlines are making billions in profit.
THIS IS ALL MANIPULATION TO TAKE ALL OF NEW DEAL AND WAR ON POVERTY WEALTH AWAY FROM THE MIDDLE/LOWER CLASS AND BREAK THE UNIONS.
I wanted to look at this one piece of news item......the announcement that General Motors has paid its bailout with the Treasury selling all of the stock handed the government at the time of bankruptcy. Only......none of it is true!
First, let's look at one economist's view of how widespread fraud and corruption is to know I am not making this up!
Corruption of America starts at home, not abroad JPMorgan Chase has been hiring China's "princelings" in exchange for business deals with their parents -- a serious offense that's all to similar to practices here in America
The Justice Department has just obtained documents showing that JPMorgan Chase, Wall Street's biggest bank, has been hiring the children of China's ruling elite in order to secure "existing and potential business opportunities" from Chinese government-run companies.
"You all know I have always been a big believer of the Sons and Daughters program," says one JPMorgan executive in an e-mail, because "it almost has a linear relationship" to winning assignments to advise Chinese companies. The documents even include spreadsheets that list the bank's "track record" for converting hires into business deals.
It's a serious offense. But let's get real. How different is bribing China's "princelings," as they're called there, from Wall Street's ongoing program of hiring departing U.S. Treasury officials, presumably in order to grease the wheels of official Washington? Timothy Geithner, President Obama's first Treasury secretary, is now president of the private-equity firm Warburg Pincus; his budget director Peter Orszag is now a top executive at Citigroup.
Or, for that matter, how different is what JPMorgan did in China from Wall Street's habit of hiring the children of powerful American politicians? (I don't mean to suggest Chelsea Clinton got her hedge-fund job at Avenue Capital Group, where she worked from 2006 to 2009, on the basis of anything other than her financial talents.)
And how much worse is JPMorgan's putative offense in China than the torrent of money JPMorgan and every other major Wall Street bank is pouring into the campaign coffers of American politicians -- making the Street one of the major backers of Democrats as well as Republicans?
The Foreign Corrupt Practices Act, under which JPMorgan could be indicted for the favors it has bestowed in China, is quite strict. It prohibits American companies from paying money or offering anything of value to foreign officials for the purpose of "securing any improper advantage." Hiring one of their children can certainly qualify as a gift, even without any direct benefit to the official.
JPMorgan couldn't even defend itself by arguing it didn't make any particular deal or get any specific advantage as a result of the hires. Under the Foreign Corrupt Practices Act, the gift doesn't have to be linked to any particular benefit to the American firm as long as it's intended to generate an advantage its competitors don't enjoy.
Compared to this, corruption of American officials is a breeze. Consider, for example, Countrywide Financial's generous "Friends of Angelo" lending program -- named after its chief executive, Angelo Mozilo -- that gave discounted mortgages to influential members of Congress and their staffs before the housing bubble burst. No criminal or civil charges have ever been filed related to these loans.
Even before the Supreme Court's shameful 2010 "Citizens United" decision -- equating corporations with human beings under the First Amendment, and thereby shielding much corporate political spending -- Republican appointees to the court had done everything they could to blunt anti-bribery laws in the United States. In 1999, in "United States v. Sun-Diamond Growers," Justice Antonin Scalia, writing for the court, interpreted an anti-bribery law so loosely as to allow corporations to give gifts to public officials unless the gifts are linked to specific policies.
We don't even require that American corporations disclose to their own shareholders the largesse they bestow on our politicians. Last year around this time, when the Securities and Exchange Commission released its 2013 to-do list, it signaled that it might formally propose a rule to require corporations to disclose their political spending. The idea had attracted more than 600,000 mostly favorable comments from the public, a record response for the agency.
But the idea mysteriously slipped off the 2014 agenda released last week, without explanation. Could it have anything to do with the fact that, soon after becoming SEC chair in April, Mary Jo White was pressed by Republican lawmakers to abandon the idea, which was fiercely opposed by business groups?
The Foreign Corrupt Practices Act is important, and JPMorgan should be nailed for bribing Chinese officials. But, if you'll pardon me for asking, why isn't there a Domestic Corrupt Practices Act?
Never before has so much U.S. corporate and Wall Street money poured into our nation's capital, as well as into our state capitals. Never before have so many Washington officials taken jobs in corporations, lobbying firms, trade associations, and on the Street immediately after leaving office. Our democracy is drowning in big money.
Corruption is corruption, and bribery is bribery, in whatever country or language it's transacted in.
Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of "Beyond Outrage," now available in paperback. His new film, "Inequality for All," was released in September. He blogs at http://www.robertreich.org.
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Regarding the GMC payment of bailout told as a good thing:
Let's see.......GM Financial, now ALLY has yet to pay off its bailout as its financial business was steeped in subprime loan fraud. Obama came in and bumped auto workers to $14 an hour.....poverty wages in order to pay for the downturn in auto sales caused by the massive corporate fraud bringing the economic collapse. So, Wall Street is super rich having stolen tens of trillions of dollars and the auto workers paid for the losses with their wages and benefits-----HOW IS THAT GOOD?
This was the most convoluted of conspiracies to defraud the American public in bailing out the worst of businesses while making it a bank that later GM comes back to buy. It boggles the mind!
As far as I can see GMAC/Ally has not paid its bailout and it looks like the crimes of this financial arm were paid for by workers.
6/01/2012 @ 5:17PM
GM Unloads $26 Billion in White-Collar Pensions; Could Union Workers Be Next?
General Motors said Friday it will offer 42,000 white-collar retirees in the U.S. a lump-sum payment in lieu of their monthly pension check and will transfer pension responsibility for 76,000 others to a group annuity plan managed by Prudential Insurance.
It’s the latest, and boldest, step to ease GM’s massive pension burden. Chief Financial Officer Daniel Amman said the changes would erase $26 billion from GM’s $134 billion worldwide pension obligation and “set the groundwork” for further actions. “It really comes down to risk reduction,” he said. “We want to remove this as an issue for us.”
GM no doubt would like to do something similar with its $71 billion pension plan for hourly factory workers and retirees, whose assets are $10 billion short of its obligations. During contract talks last fall, GM and United Auto Workers bargainers spent many hours discussing the pension plan, but no substantial changes were made. Amman told reporters Friday: “We’ve agreed to keep an open channel on that topic.” A UAW spokeswoman was not available for comment.
Pension accounting is a volatile business, and depends on market returns, discount rates and worker mortality rates. Despite steady cash and stock contributions over the years, as well as a shift toward a more stable asset mix, GM’s global pension plans are still $25 billion short of the company’s expected obligation to current and future retirees.
The transfer of about 25% of its total U.S. pension obligation to Prudential will cost GM $3.5 billion to $4.5 billion: $1 billion to “top off” the salaried plan’s assets before they are turned over, and $2.5 billion to $3.5 billion to cover a one-time premium payment to Prudential. (The actual amount depends on how many retirees opt to continue getting their monthly benefits from Prudential.) But it’s worth it: After GM pays off Prudential, it will have no further cash obligations tied to the transferred pensions.
GM, which emerged from bankruptcy in June 2009 after a government bailout, is trying to restore its financial credibility and raise its stock price so that the U.S. Treasury can sell its remaining stake in the automaker. Fitch Ratings Friday called the pension restructuring a “positive step” for GM, and said the company, with $31.5 billion in cash, could easily afford it. But Fitch took no action on the automaker’s debt rating, currently “BB.”
GM isn’t the first to try to unload a huge chunk of its pension debt. . In April, Ford said it would offer 90,000 of its retired engineers and office workers the chance to take a lump sum payment now and forgo their monthly pension checks for the rest of their lives. That program is just getting under way so it is too early to know how many people will accept.
GM’s offer comes with a twist, though: the option to continue receiving the same monthly benefits from Prudential through a group annuity plan. That could be more appealing to retirees worried about whether their money would last if they accepted a a lump-sum. Eligible retirees have until July 20 to decide on their payment options. The transactions are expected to be completed by the end of 2012, and Prudential would then assume responsibility for the pensions in January 2013.
Amman said transferring salaried pensions to Prudential makes sense. “That is their core business. This allows us to spend more time and resources on our core business which is designing, building and selling world-class vehicles.”
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Below you see what was a systemically fraudulent bank allowed right away to escape in 2009
It appears to me that since GMAC was the source of billions of dollars in fraud, that all of the profit made by this bank comes back to the public.
FOLLOW THE PROFIT MADE BY CORPORATIONS INVOLVED IN THE FRAUD BECAUSE IT IS YOUR RETIREMENT!
Some may think I'm being flippant but I am not. The amount of fraud GMAC was involved would bring that much back to the people and GM workers!
Consumers Beware: Ally Bank is GMAC
By MyBankTracker Fri May 15, 2009
GMAC Bank becomes Ally Bank
In becoming a bank holding company back in December, GMAC has taken the opportunity to differentiate themselves in the market by starting fresh – much needed in the banking industry itself.
Building on the foundation of GMAC, Ally is an online bank that looks to show the market that it truly understands what today’s customer is about. With no monthly fees, no minimum balances and no minimum deposits, as well as 24/7 Customer Care Support and the ability to compare rates against its competitors directly, Ally looks to be the bank for a Web2.0 customer.
Ally Bank has taken a step toward transparency by allowing the consumer to compare Ally’s rates against competitors, such as other online banks ING Direct and HSBC Direct, as well as brick and mortar banks such as, Bank of America, Chase, and Wells Fargo. We applaud their progressive and positive approach in bringing transparency to banking.
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Propublica did a great piece on where the bailout money went. This is just one of the last posts on the GMAC bailout and as you can see much of the bailout has yet to be paid. So why is GM being toted as having paid off its debt? Because a Bain's Capital spin-off of the assets in its financial wing allowed it to pretend none of that bailout was connected to them. GM then went right back and bought GMAC/Ally having lost nothing but union pensions and wages!
VISIGOTHS THINK THIS ALL LOOKS SOMEWHAT LEGAL BUT RULE OF LAW DOES NOT ALLOW THE CONVOLUTED TWISTING OF RULES AND LAWS THAT HAPPENED IN THE FRAUD. ROBO-SIGNING NOT ILLEGAL SAYS A MARYLAND COURT? REALLY?
Propublica Bailout Tracker
Events
$5.93B Payback
Nov. 20, 2013 Partial Repayment
On November 20, 2013, Ally completed a private placement of an aggregate of 216,667 shares of its common stock for an aggregate price of approximately $1.3 billion and the repurchase of all outstanding shares of its Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series F-2, held by Treasury, including payment for the elimination or relinquishment of any right to receive additional shares of common stock to be issued (the “Share Adjustment Right”). Ally paid to Treasury a total of approximately $5.93 billion for the repurchase of the Series F-2 Preferred Stock and the elimination of the Share Adjustment Right. As a result of the private placement, Treasury's common stock ownership stake was diluted from 73.8 percent to 63.45 percent. Treasury continues to own 981,971 shares of common stock in Ally.
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Remember, as with AIG, this corporation was soaring in profits from the subprime loan fraud and yet, it was spun off and bailed out.....think of the assets that could and should have been distributed. Think about the auto workers who were left to pay the price of the massive mortgage fraud of which GMAC was deeply involved!
So, just last year....2012 we are made aware of the taxpayer losses along with the workers as the banks and this bank unit made out like the bandits they are! At the same time Bernanke, the FED chief, has QE and 0% going full speed to get all those subprime loans off GMAC accounting records and free money created the ability for it to expand overseas ready to go!
THE GM WORKERS......NOT SO MUCH.
Profits in G.M.A.C. Bailout to Benefit Financiers, Not U.S.
By STEVEN M. DAVIDOFF
Harry Campbell Deal Professor August 21, 2012, 6:57 pm
Among the companies that were bailed out by the federal government during the financial crisis, perhaps the most intractable is proving to be the company formerly known as the General Motors Acceptance Corporation. It’s a case study in how bailouts can linger and profits, when they do come, flow not to the government but to the Warren E. Buffetts of the world.
G.M.A.C. was the financial arm of General Motors.
In the years leading up to the financial crisis, it was also G.M.’s most profitable unit, which tells you something about the auto industry at the time. The company earned more profit from lending money to customers than in selling cars.
In 2005, desperate to raise cash, General Motors sold a 51 percent stake in G.M.A.C. to the private equity firm Cerberus Capital Management. Cerberus beat out a rival, Kohlberg Kravis Roberts, for the privilege, spurring BusinessWeek to write that Henry R. Kravis’s loss “has to sting.”
During the financial crisis, however, the sting was felt on the other side, as G.M.A.C. staved off collapse thanks only to a government infusion of $17.2 billion. The company was renamed Ally Financial — you have probably seen its catchy commercials on television. The Treasury Department owns 73.8 percent of Ally, with Cerberus retaining an 8.7 percent stake.
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Rescuing a financial arm of GM riddled with fraudulent loans by making it a bank!!!!! OH THAT'S A GOOD IDEA!
Remember, GMAC was a financial arm of GM....the two are separate corporations.
Warren correctly asks why an entity collapsing from broad fraudulent practices was being given the ability to operate as a government insured global bank.
MY POINT IN ALL OF THIS IS THAT ALL OF THIS IS ILLEGAL AND AS SUCH ALL OF THIS CAN BE MADE VOID. WE SIMPLY NEED TO REINSTATE RULE OF LAW AND THAT IS DOABLE!
Lawmakers question GMAC rescue
By Binyamin Appelbaum
Washington Post Staff Writer
Friday, February 26, 2010
The federal government went to extraordinary lengths to save the auto financing company GMAC. It was the only bank to get three separate rounds of federal aid -- the most recent in December, even as the broader bailout was winding down -- and it is the only bank in which the government now owns a majority stake.
On Thursday, congressional investigators questioned whether all those efforts were a mistake. Members of the Congressional Oversight Panel, charged by Congress with policing the bailout, pressed Treasury Department officials to explain why the government did not let the company go bankrupt.
They also questioned whether the rescue of GMAC, achieved in part by making it a bank, had created a long-term situation in which the government guarantee of bank deposits was subsidizing sales at General Motors and Chrysler. GMAC is the primary source of financing for GM and Chrysler dealers, and a major source of loans for buyers of their vehicles.
Elizabeth Warren, a Harvard law professor who chairs the panel, said she understood GMAC's utility for GM and Chrysler.
"What I don't understand," she said, "is what the justification is for being an independent bank that takes deposits that has a backup from the United States government."
Ron Bloom, a senior adviser to Treasury Secretary Timothy F. Geithner, told the panel that the rescue of GMAC was necessary to save the automakers, and that the $17.2 billion price tag was a good deal for taxpayers. He said that no other lender or combination of lenders could have quickly replaced GMAC's role in the marketplace.
"Without orders for cars, GM would have been forced to slow or shut down its factories indefinitely to match the drop in demand," Bloom said in prepared testimony. "Given its significant overhead, a slowdown or stoppage in production of this magnitude would have toppled GM."
Under sharp questioning from panelists, Bloom conceded that GM might have survived, but said that the government did not want to take the risk.
But an independent expert, Christopher Whalen of Institutional Risk Analytics, told the panel that the failure of GMAC actually would have helped the auto industry.
"Solvent bank and non-bank competitors of GMAC would have been eager to capture both the floor plan and auto sales business," Whalen said.
GMAC fell into financial trouble in part because of its deep plunge into mortgage lending. Its problems then were compounded by the economic crisis.
In December 2008, the Bush administration invested $5.8 billion in the company and the Federal Reserve gave emergency approval for GMAC to become a bank holding company, allowing it to gather deposits to fund lending.
In May 2009, the Obama administration invested $7.5 billion, and the Federal Deposit Insurance Corp. agreed to help GMAC raise a further $7.4 billion from investors by guaranteeing that it would cover any losses.
And in December, the government gave GMAC $3.8 billion in a third round of federal aid.
As a result of the interventions, the government now owns a 56.3 percent stake in the company.
Federal law draws a strong line between banking and commerce. The government bars manufacturers and other kinds of companies from owning banks, so that the federal guarantee of bank deposits is not abused as a cheap source of funding, allowing companies to take risks at federal expense. The federal guarantee increases the availability of loans; the separation of banking and commerce prevents companies from getting that money too easily.
Automakers have long relied on financing arms to facilitate sales, but until the government's rescue of GMAC, none of those arms had access to deposits as a funding source.
The company has pledged to diversify its operations. Michael A. Carpenter, GMAC's chief executive, told the panel that the company would be able to extend its business model to other manufacturers. He said the company was rebranding itself as "Ally" to emphasize that General Motors was no longer its primary focus. But GMAC also plans to shed its mortgage lending business, which will serve to increase its short-term focus on GM and Chrysler.
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Raise you hand if you understand that an automotive corporation should not have a branch that is involved in the mortgage loan industry! EVERYONE. So, we know from the start that the problem is with how GMAC was built. So, the first thing Rule of Law would do is close GMAC and seize its assets for operating unlawfully in the mortgage business. GMAC was indeed one of the worst in moving subprime mortgage loans and should have been prosecuted and again, seize its assets.
Rather it was bailed out because they said.....an automobile corporation had to have a financing branch. GMAC was not only bailed out-----it was allowed to become a global bank. Now, if you were a VISIGOTH and this was a scheme to make the corporation rich you would turn a finance corporation into a global bank.
This was in 2011 when people still thought that justice may be served and nothing happened!
GMAC Mortgage | Home Loans, Refinance, Mortgage Rates
ProPublica / By Paul Kiel
Mortgage Company Bailed Out By Taxpayers Is Caught Forging Documents to Foreclose on Them
August 1, 2011 |
GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.
GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.
And so GMAC, which was bailed out by taxpayers in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica show.
"The problem is we do not have signing authority—are there any other options?" Jeffrey Stephan, the head of GMAC's "Document Execution" team, wrote to another employee and the law firm pursuing the foreclosure action. No solutions were offered.
Three months later, GMAC had an answer. It filed a document with New York City authorities that said the delinquent Ameriquest loan had been assigned to it "effective of" August 2005. The documentwas dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a "Limited Signing Officer" for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.
An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.
The issue has attracted growing scrutiny in recent months as bloggers, consumer attorneys and media outlets have identified what appears to be part of a pattern of questionable assignments filed across the country.
GMAC, whose parent company renamed itself last year as Ally Financial, was at the center of what became known as the robo-signing scandal. The uproar began last fall after revelations that mortgage servicing employees had produced flawed documents to speed foreclosures. GMAC and other banks have acknowledged filing false affidavits in which bank officials claimed "personal knowledge" of the facts underlying thousands of mortgages. But GMAC and other servicers say they've since tightened their procedures. They insist that their records were largely accurate and the affidavits amounted to errors of form, not substance.
The issues surrounding the Ameriquest loan and others like it appear to be more serious.
"This assignment of mortgage has all of the markings of GMAC finding that it lacked a needed mortgage assignment in order to foreclose and just making it up," said Thomas Cox, a Maine foreclosure defense attorney.
In New York, it's a felony to file a public record with "intent to deceive."
"It's fraud," said Linda Tirelli, a consumer bankruptcy attorney. "I want to know who's going to do a perp walk for recording this."
No criminal charges have been filed in the robo-signing cases.
Asked by ProPublica about the document, GMAC acknowledged Stephan did not have authority to sign on behalf of Ameriquest. The bank said it is still planning to push ahead with foreclosure on the homeowner, who remains in the property.
Company spokeswoman Gina Proia said an internal review last fall into "suspected documentation execution issues" had flagged the loan as problematic and that GMAC is "determining what needs to be done in order to receive the necessary authorization."
"We will determine and complete the necessary steps to remediate and proceed with foreclosure," Proia said.
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So, the scheme goes full circle with GM buying back the business that caused it to go bankrupt only now, ALLY is a global bank that global GM now can use for its global sales.
HOW GLOBAL OF THEM!!!!
General Motors buys Ally Financial foreign operations
general motors financial logo
By Dan Roth Auto Blog
In a move that welcomes former pieces of General Motors back into the fold, GM Financial has reached a deal with Ally Financial, formerly GMAC, to buy a piece of the company's international operations. The $4.2 billion deal is for Ally's Latin America, Europe and China operations.
"GM is entering the most aggressive rollout of new vehicles in its history, and this acquisition will make us an even more formidable competitor by ensuring that competitive financing is available to our customers and dealers around the world," says General Motors CFO Dan Ammann. The ability to finance from a captive unit will let General Motors extend better loan terms to potential customers, which the automaker sees as key to closing a sales gap that's between 10 and 15 percent versus automakers who already have their own financing divisions.
GM will be handing over more than $2 billion in cash to GM Financial, and the unit will more than double its liabilities from $12 billion to $27 billion while also doubling its assets to about $33 billion. GM Financial expects to bolster its yearly pre-tax earnings by $300-$400 million. It will take at least six months to wrap this deal up, provided it gets approvals from various oversight agencies. For more information on the deal, check out the official press release below.
Our NPR programming just finished a story of financial justice with the auto industry paying off its bailout and now free to act as a economic engine for US workers. As you see below, the story is neither. Should US workers be glad that the auto industry did not go out of business? Did it really need to or was that just a way to break the auto industry unions? THAT'S WHAT IT WAS ALL ABOUT! Remember, auto sales were so bad because of the massive financial fraud that brought down the economy and when we were told Wall Street would not 'loan' money to the auto industry to help weather the crisis, we ask ----WHY DID THEY NEED A LOAN WHEN IT WAS THE FINANCIAL FRAUD THAT BROUGHT THEM DOWN? It is the same as the gas prices that drained the profits of airlines for a decade as speculators took prices sky-high everyone knowing it was illegal market manipulation. Was it just a way to move the airline industry into bankruptcy to shed all of union wages and benefits, because as we know, now that all the airlines have gone through bankruptcy we haven't seen gas prices like that and airlines are making billions in profit.
THIS IS ALL MANIPULATION TO TAKE ALL OF NEW DEAL AND WAR ON POVERTY WEALTH AWAY FROM THE MIDDLE/LOWER CLASS AND BREAK THE UNIONS.
I wanted to look at this one piece of news item......the announcement that General Motors has paid its bailout with the Treasury selling all of the stock handed the government at the time of bankruptcy. Only......none of it is true!
First, let's look at one economist's view of how widespread fraud and corruption is to know I am not making this up!
Corruption of America starts at home, not abroad JPMorgan Chase has been hiring China's "princelings" in exchange for business deals with their parents -- a serious offense that's all to similar to practices here in America
The Justice Department has just obtained documents showing that JPMorgan Chase, Wall Street's biggest bank, has been hiring the children of China's ruling elite in order to secure "existing and potential business opportunities" from Chinese government-run companies.
"You all know I have always been a big believer of the Sons and Daughters program," says one JPMorgan executive in an e-mail, because "it almost has a linear relationship" to winning assignments to advise Chinese companies. The documents even include spreadsheets that list the bank's "track record" for converting hires into business deals.
It's a serious offense. But let's get real. How different is bribing China's "princelings," as they're called there, from Wall Street's ongoing program of hiring departing U.S. Treasury officials, presumably in order to grease the wheels of official Washington? Timothy Geithner, President Obama's first Treasury secretary, is now president of the private-equity firm Warburg Pincus; his budget director Peter Orszag is now a top executive at Citigroup.
Or, for that matter, how different is what JPMorgan did in China from Wall Street's habit of hiring the children of powerful American politicians? (I don't mean to suggest Chelsea Clinton got her hedge-fund job at Avenue Capital Group, where she worked from 2006 to 2009, on the basis of anything other than her financial talents.)
And how much worse is JPMorgan's putative offense in China than the torrent of money JPMorgan and every other major Wall Street bank is pouring into the campaign coffers of American politicians -- making the Street one of the major backers of Democrats as well as Republicans?
The Foreign Corrupt Practices Act, under which JPMorgan could be indicted for the favors it has bestowed in China, is quite strict. It prohibits American companies from paying money or offering anything of value to foreign officials for the purpose of "securing any improper advantage." Hiring one of their children can certainly qualify as a gift, even without any direct benefit to the official.
JPMorgan couldn't even defend itself by arguing it didn't make any particular deal or get any specific advantage as a result of the hires. Under the Foreign Corrupt Practices Act, the gift doesn't have to be linked to any particular benefit to the American firm as long as it's intended to generate an advantage its competitors don't enjoy.
Compared to this, corruption of American officials is a breeze. Consider, for example, Countrywide Financial's generous "Friends of Angelo" lending program -- named after its chief executive, Angelo Mozilo -- that gave discounted mortgages to influential members of Congress and their staffs before the housing bubble burst. No criminal or civil charges have ever been filed related to these loans.
Even before the Supreme Court's shameful 2010 "Citizens United" decision -- equating corporations with human beings under the First Amendment, and thereby shielding much corporate political spending -- Republican appointees to the court had done everything they could to blunt anti-bribery laws in the United States. In 1999, in "United States v. Sun-Diamond Growers," Justice Antonin Scalia, writing for the court, interpreted an anti-bribery law so loosely as to allow corporations to give gifts to public officials unless the gifts are linked to specific policies.
We don't even require that American corporations disclose to their own shareholders the largesse they bestow on our politicians. Last year around this time, when the Securities and Exchange Commission released its 2013 to-do list, it signaled that it might formally propose a rule to require corporations to disclose their political spending. The idea had attracted more than 600,000 mostly favorable comments from the public, a record response for the agency.
But the idea mysteriously slipped off the 2014 agenda released last week, without explanation. Could it have anything to do with the fact that, soon after becoming SEC chair in April, Mary Jo White was pressed by Republican lawmakers to abandon the idea, which was fiercely opposed by business groups?
The Foreign Corrupt Practices Act is important, and JPMorgan should be nailed for bribing Chinese officials. But, if you'll pardon me for asking, why isn't there a Domestic Corrupt Practices Act?
Never before has so much U.S. corporate and Wall Street money poured into our nation's capital, as well as into our state capitals. Never before have so many Washington officials taken jobs in corporations, lobbying firms, trade associations, and on the Street immediately after leaving office. Our democracy is drowning in big money.
Corruption is corruption, and bribery is bribery, in whatever country or language it's transacted in.
Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of "Beyond Outrage," now available in paperback. His new film, "Inequality for All," was released in September. He blogs at http://www.robertreich.org.
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Regarding the GMC payment of bailout told as a good thing:
Let's see.......GM Financial, now ALLY has yet to pay off its bailout as its financial business was steeped in subprime loan fraud. Obama came in and bumped auto workers to $14 an hour.....poverty wages in order to pay for the downturn in auto sales caused by the massive corporate fraud bringing the economic collapse. So, Wall Street is super rich having stolen tens of trillions of dollars and the auto workers paid for the losses with their wages and benefits-----HOW IS THAT GOOD?
This was the most convoluted of conspiracies to defraud the American public in bailing out the worst of businesses while making it a bank that later GM comes back to buy. It boggles the mind!
As far as I can see GMAC/Ally has not paid its bailout and it looks like the crimes of this financial arm were paid for by workers.
6/01/2012 @ 5:17PM
GM Unloads $26 Billion in White-Collar Pensions; Could Union Workers Be Next?
General Motors said Friday it will offer 42,000 white-collar retirees in the U.S. a lump-sum payment in lieu of their monthly pension check and will transfer pension responsibility for 76,000 others to a group annuity plan managed by Prudential Insurance.
It’s the latest, and boldest, step to ease GM’s massive pension burden. Chief Financial Officer Daniel Amman said the changes would erase $26 billion from GM’s $134 billion worldwide pension obligation and “set the groundwork” for further actions. “It really comes down to risk reduction,” he said. “We want to remove this as an issue for us.”
GM no doubt would like to do something similar with its $71 billion pension plan for hourly factory workers and retirees, whose assets are $10 billion short of its obligations. During contract talks last fall, GM and United Auto Workers bargainers spent many hours discussing the pension plan, but no substantial changes were made. Amman told reporters Friday: “We’ve agreed to keep an open channel on that topic.” A UAW spokeswoman was not available for comment.
Pension accounting is a volatile business, and depends on market returns, discount rates and worker mortality rates. Despite steady cash and stock contributions over the years, as well as a shift toward a more stable asset mix, GM’s global pension plans are still $25 billion short of the company’s expected obligation to current and future retirees.
The transfer of about 25% of its total U.S. pension obligation to Prudential will cost GM $3.5 billion to $4.5 billion: $1 billion to “top off” the salaried plan’s assets before they are turned over, and $2.5 billion to $3.5 billion to cover a one-time premium payment to Prudential. (The actual amount depends on how many retirees opt to continue getting their monthly benefits from Prudential.) But it’s worth it: After GM pays off Prudential, it will have no further cash obligations tied to the transferred pensions.
GM, which emerged from bankruptcy in June 2009 after a government bailout, is trying to restore its financial credibility and raise its stock price so that the U.S. Treasury can sell its remaining stake in the automaker. Fitch Ratings Friday called the pension restructuring a “positive step” for GM, and said the company, with $31.5 billion in cash, could easily afford it. But Fitch took no action on the automaker’s debt rating, currently “BB.”
GM isn’t the first to try to unload a huge chunk of its pension debt. . In April, Ford said it would offer 90,000 of its retired engineers and office workers the chance to take a lump sum payment now and forgo their monthly pension checks for the rest of their lives. That program is just getting under way so it is too early to know how many people will accept.
GM’s offer comes with a twist, though: the option to continue receiving the same monthly benefits from Prudential through a group annuity plan. That could be more appealing to retirees worried about whether their money would last if they accepted a a lump-sum. Eligible retirees have until July 20 to decide on their payment options. The transactions are expected to be completed by the end of 2012, and Prudential would then assume responsibility for the pensions in January 2013.
Amman said transferring salaried pensions to Prudential makes sense. “That is their core business. This allows us to spend more time and resources on our core business which is designing, building and selling world-class vehicles.”
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Below you see what was a systemically fraudulent bank allowed right away to escape in 2009
It appears to me that since GMAC was the source of billions of dollars in fraud, that all of the profit made by this bank comes back to the public.
FOLLOW THE PROFIT MADE BY CORPORATIONS INVOLVED IN THE FRAUD BECAUSE IT IS YOUR RETIREMENT!
Some may think I'm being flippant but I am not. The amount of fraud GMAC was involved would bring that much back to the people and GM workers!
Consumers Beware: Ally Bank is GMAC
By MyBankTracker Fri May 15, 2009
GMAC Bank becomes Ally Bank
In becoming a bank holding company back in December, GMAC has taken the opportunity to differentiate themselves in the market by starting fresh – much needed in the banking industry itself.
Building on the foundation of GMAC, Ally is an online bank that looks to show the market that it truly understands what today’s customer is about. With no monthly fees, no minimum balances and no minimum deposits, as well as 24/7 Customer Care Support and the ability to compare rates against its competitors directly, Ally looks to be the bank for a Web2.0 customer.
Ally Bank has taken a step toward transparency by allowing the consumer to compare Ally’s rates against competitors, such as other online banks ING Direct and HSBC Direct, as well as brick and mortar banks such as, Bank of America, Chase, and Wells Fargo. We applaud their progressive and positive approach in bringing transparency to banking.
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Propublica did a great piece on where the bailout money went. This is just one of the last posts on the GMAC bailout and as you can see much of the bailout has yet to be paid. So why is GM being toted as having paid off its debt? Because a Bain's Capital spin-off of the assets in its financial wing allowed it to pretend none of that bailout was connected to them. GM then went right back and bought GMAC/Ally having lost nothing but union pensions and wages!
VISIGOTHS THINK THIS ALL LOOKS SOMEWHAT LEGAL BUT RULE OF LAW DOES NOT ALLOW THE CONVOLUTED TWISTING OF RULES AND LAWS THAT HAPPENED IN THE FRAUD. ROBO-SIGNING NOT ILLEGAL SAYS A MARYLAND COURT? REALLY?
Propublica Bailout Tracker
Events
$5.93B Payback
Nov. 20, 2013 Partial Repayment
On November 20, 2013, Ally completed a private placement of an aggregate of 216,667 shares of its common stock for an aggregate price of approximately $1.3 billion and the repurchase of all outstanding shares of its Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series F-2, held by Treasury, including payment for the elimination or relinquishment of any right to receive additional shares of common stock to be issued (the “Share Adjustment Right”). Ally paid to Treasury a total of approximately $5.93 billion for the repurchase of the Series F-2 Preferred Stock and the elimination of the Share Adjustment Right. As a result of the private placement, Treasury's common stock ownership stake was diluted from 73.8 percent to 63.45 percent. Treasury continues to own 981,971 shares of common stock in Ally.
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Remember, as with AIG, this corporation was soaring in profits from the subprime loan fraud and yet, it was spun off and bailed out.....think of the assets that could and should have been distributed. Think about the auto workers who were left to pay the price of the massive mortgage fraud of which GMAC was deeply involved!
So, just last year....2012 we are made aware of the taxpayer losses along with the workers as the banks and this bank unit made out like the bandits they are! At the same time Bernanke, the FED chief, has QE and 0% going full speed to get all those subprime loans off GMAC accounting records and free money created the ability for it to expand overseas ready to go!
THE GM WORKERS......NOT SO MUCH.
Profits in G.M.A.C. Bailout to Benefit Financiers, Not U.S.
By STEVEN M. DAVIDOFF
Harry Campbell Deal Professor August 21, 2012, 6:57 pm
Among the companies that were bailed out by the federal government during the financial crisis, perhaps the most intractable is proving to be the company formerly known as the General Motors Acceptance Corporation. It’s a case study in how bailouts can linger and profits, when they do come, flow not to the government but to the Warren E. Buffetts of the world.
G.M.A.C. was the financial arm of General Motors.
In the years leading up to the financial crisis, it was also G.M.’s most profitable unit, which tells you something about the auto industry at the time. The company earned more profit from lending money to customers than in selling cars.
In 2005, desperate to raise cash, General Motors sold a 51 percent stake in G.M.A.C. to the private equity firm Cerberus Capital Management. Cerberus beat out a rival, Kohlberg Kravis Roberts, for the privilege, spurring BusinessWeek to write that Henry R. Kravis’s loss “has to sting.”
During the financial crisis, however, the sting was felt on the other side, as G.M.A.C. staved off collapse thanks only to a government infusion of $17.2 billion. The company was renamed Ally Financial — you have probably seen its catchy commercials on television. The Treasury Department owns 73.8 percent of Ally, with Cerberus retaining an 8.7 percent stake.
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Rescuing a financial arm of GM riddled with fraudulent loans by making it a bank!!!!! OH THAT'S A GOOD IDEA!
Remember, GMAC was a financial arm of GM....the two are separate corporations.
Warren correctly asks why an entity collapsing from broad fraudulent practices was being given the ability to operate as a government insured global bank.
MY POINT IN ALL OF THIS IS THAT ALL OF THIS IS ILLEGAL AND AS SUCH ALL OF THIS CAN BE MADE VOID. WE SIMPLY NEED TO REINSTATE RULE OF LAW AND THAT IS DOABLE!
Lawmakers question GMAC rescue
By Binyamin Appelbaum
Washington Post Staff Writer
Friday, February 26, 2010
The federal government went to extraordinary lengths to save the auto financing company GMAC. It was the only bank to get three separate rounds of federal aid -- the most recent in December, even as the broader bailout was winding down -- and it is the only bank in which the government now owns a majority stake.
On Thursday, congressional investigators questioned whether all those efforts were a mistake. Members of the Congressional Oversight Panel, charged by Congress with policing the bailout, pressed Treasury Department officials to explain why the government did not let the company go bankrupt.
They also questioned whether the rescue of GMAC, achieved in part by making it a bank, had created a long-term situation in which the government guarantee of bank deposits was subsidizing sales at General Motors and Chrysler. GMAC is the primary source of financing for GM and Chrysler dealers, and a major source of loans for buyers of their vehicles.
Elizabeth Warren, a Harvard law professor who chairs the panel, said she understood GMAC's utility for GM and Chrysler.
"What I don't understand," she said, "is what the justification is for being an independent bank that takes deposits that has a backup from the United States government."
Ron Bloom, a senior adviser to Treasury Secretary Timothy F. Geithner, told the panel that the rescue of GMAC was necessary to save the automakers, and that the $17.2 billion price tag was a good deal for taxpayers. He said that no other lender or combination of lenders could have quickly replaced GMAC's role in the marketplace.
"Without orders for cars, GM would have been forced to slow or shut down its factories indefinitely to match the drop in demand," Bloom said in prepared testimony. "Given its significant overhead, a slowdown or stoppage in production of this magnitude would have toppled GM."
Under sharp questioning from panelists, Bloom conceded that GM might have survived, but said that the government did not want to take the risk.
But an independent expert, Christopher Whalen of Institutional Risk Analytics, told the panel that the failure of GMAC actually would have helped the auto industry.
"Solvent bank and non-bank competitors of GMAC would have been eager to capture both the floor plan and auto sales business," Whalen said.
GMAC fell into financial trouble in part because of its deep plunge into mortgage lending. Its problems then were compounded by the economic crisis.
In December 2008, the Bush administration invested $5.8 billion in the company and the Federal Reserve gave emergency approval for GMAC to become a bank holding company, allowing it to gather deposits to fund lending.
In May 2009, the Obama administration invested $7.5 billion, and the Federal Deposit Insurance Corp. agreed to help GMAC raise a further $7.4 billion from investors by guaranteeing that it would cover any losses.
And in December, the government gave GMAC $3.8 billion in a third round of federal aid.
As a result of the interventions, the government now owns a 56.3 percent stake in the company.
Federal law draws a strong line between banking and commerce. The government bars manufacturers and other kinds of companies from owning banks, so that the federal guarantee of bank deposits is not abused as a cheap source of funding, allowing companies to take risks at federal expense. The federal guarantee increases the availability of loans; the separation of banking and commerce prevents companies from getting that money too easily.
Automakers have long relied on financing arms to facilitate sales, but until the government's rescue of GMAC, none of those arms had access to deposits as a funding source.
The company has pledged to diversify its operations. Michael A. Carpenter, GMAC's chief executive, told the panel that the company would be able to extend its business model to other manufacturers. He said the company was rebranding itself as "Ally" to emphasize that General Motors was no longer its primary focus. But GMAC also plans to shed its mortgage lending business, which will serve to increase its short-term focus on GM and Chrysler.
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Raise you hand if you understand that an automotive corporation should not have a branch that is involved in the mortgage loan industry! EVERYONE. So, we know from the start that the problem is with how GMAC was built. So, the first thing Rule of Law would do is close GMAC and seize its assets for operating unlawfully in the mortgage business. GMAC was indeed one of the worst in moving subprime mortgage loans and should have been prosecuted and again, seize its assets.
Rather it was bailed out because they said.....an automobile corporation had to have a financing branch. GMAC was not only bailed out-----it was allowed to become a global bank. Now, if you were a VISIGOTH and this was a scheme to make the corporation rich you would turn a finance corporation into a global bank.
This was in 2011 when people still thought that justice may be served and nothing happened!
GMAC Mortgage | Home Loans, Refinance, Mortgage Rates
ProPublica / By Paul Kiel
Mortgage Company Bailed Out By Taxpayers Is Caught Forging Documents to Foreclose on Them
August 1, 2011 |
GMAC, one of the nation's largest mortgage servicers, faced a quandary last summer. It wanted to foreclose on a New York City homeowner but lacked the crucial paperwork needed to seize the property.
GMAC has a standard solution to such problems, which arise frequently in the post-bubble economy. Its employees secure permission to create and sign documents in the name of companies that made the original loans. But this case was trickier because the lender, a notorious subprime company named Ameriquest, had gone out of business in 2007.
And so GMAC, which was bailed out by taxpayers in 2008, began looking for a way to craft a document that would pass legal muster, internal records obtained by ProPublica show.
"The problem is we do not have signing authority—are there any other options?" Jeffrey Stephan, the head of GMAC's "Document Execution" team, wrote to another employee and the law firm pursuing the foreclosure action. No solutions were offered.
Three months later, GMAC had an answer. It filed a document with New York City authorities that said the delinquent Ameriquest loan had been assigned to it "effective of" August 2005. The documentwas dated July 7, 2010, three years after Ameriquest had ceased to exist and was signed by Stephan, who was identified as a "Limited Signing Officer" for Ameriquest Mortgage Company. Soon after, GMAC filed for foreclosure.
An examination by ProPublica suggests this transaction was not unique. A review of court records in New York identified hundreds of similar assignment documents filed in the name of Ameriquest after 2008 by GMAC and other mortgage servicers.
The issue has attracted growing scrutiny in recent months as bloggers, consumer attorneys and media outlets have identified what appears to be part of a pattern of questionable assignments filed across the country.
GMAC, whose parent company renamed itself last year as Ally Financial, was at the center of what became known as the robo-signing scandal. The uproar began last fall after revelations that mortgage servicing employees had produced flawed documents to speed foreclosures. GMAC and other banks have acknowledged filing false affidavits in which bank officials claimed "personal knowledge" of the facts underlying thousands of mortgages. But GMAC and other servicers say they've since tightened their procedures. They insist that their records were largely accurate and the affidavits amounted to errors of form, not substance.
The issues surrounding the Ameriquest loan and others like it appear to be more serious.
"This assignment of mortgage has all of the markings of GMAC finding that it lacked a needed mortgage assignment in order to foreclose and just making it up," said Thomas Cox, a Maine foreclosure defense attorney.
In New York, it's a felony to file a public record with "intent to deceive."
"It's fraud," said Linda Tirelli, a consumer bankruptcy attorney. "I want to know who's going to do a perp walk for recording this."
No criminal charges have been filed in the robo-signing cases.
Asked by ProPublica about the document, GMAC acknowledged Stephan did not have authority to sign on behalf of Ameriquest. The bank said it is still planning to push ahead with foreclosure on the homeowner, who remains in the property.
Company spokeswoman Gina Proia said an internal review last fall into "suspected documentation execution issues" had flagged the loan as problematic and that GMAC is "determining what needs to be done in order to receive the necessary authorization."
"We will determine and complete the necessary steps to remediate and proceed with foreclosure," Proia said.
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So, the scheme goes full circle with GM buying back the business that caused it to go bankrupt only now, ALLY is a global bank that global GM now can use for its global sales.
HOW GLOBAL OF THEM!!!!
General Motors buys Ally Financial foreign operations
general motors financial logo
By Dan Roth Auto Blog
In a move that welcomes former pieces of General Motors back into the fold, GM Financial has reached a deal with Ally Financial, formerly GMAC, to buy a piece of the company's international operations. The $4.2 billion deal is for Ally's Latin America, Europe and China operations.
"GM is entering the most aggressive rollout of new vehicles in its history, and this acquisition will make us an even more formidable competitor by ensuring that competitive financing is available to our customers and dealers around the world," says General Motors CFO Dan Ammann. The ability to finance from a captive unit will let General Motors extend better loan terms to potential customers, which the automaker sees as key to closing a sales gap that's between 10 and 15 percent versus automakers who already have their own financing divisions.
GM will be handing over more than $2 billion in cash to GM Financial, and the unit will more than double its liabilities from $12 billion to $27 billion while also doubling its assets to about $33 billion. GM Financial expects to bolster its yearly pre-tax earnings by $300-$400 million. It will take at least six months to wrap this deal up, provided it gets approvals from various oversight agencies. For more information on the deal, check out the official press release below.
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