Stimulus
Federal ‘aid’ went to companies other than banks, including GE and Harley Davidson. $16B to GE as the feds bought some paper. Odd how we never heard about that from any of the GE owned media groups, who seemed to cheer the idea of such aid.
Remember, I do this to entertain me, not you.
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December 2nd, 2010 at 3:58 pm
Most of the banks were tied to Obama’s “good ol boys”…. and they said Bush was all about his cronies.
December 2nd, 2010 at 4:23 pm
“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. “
I’m not sure I see the problem.
Many corporations, especially big ones that don’t keep a few billion dollars in cash on hand (ie, not Microsoft or Apple) rely on commercial “paper” for short term cash-flow coverage.
I’d be shocked if any of these loans weren’t paid back, and if under 99% weren’t on time, and of course with interest.
I suspect most of the GE-owned media never even knew it was happening – and wouldn’t have cared if they had, not because they were owned by GE, but because there’s no story there.
If commercial credit dries up in a credit crunch, we either see someone doing loans (the Fed, in this case), or a huge cascade of defaults or cash-flow follow-on crunches.
Sure seems like the Fed covering commercial paper until the banks were ready to again was the lesser evil, by far.
December 2nd, 2010 at 4:50 pm
How about how much went to European banks, Sigivald, did that shock you?
December 2nd, 2010 at 5:23 pm
SPQR: Nope. Not shocked at all.
Banking is inherently international these days, after all, and you can’t just keep American banks from collapsing and call it good, in a banking crisis.
Also, from everything I’ve read those same loans to the international banks were also mostly or entirely short term and paid back with interest.
So I’m really, really not shocked or upset about it. Why should I be?
(It doesn’t do much good to keep US banks from collapsing if those in Europe collapse and then pull ours down too, or destroy the world economy for a decade or two.
In finance as in geopolitics, isolationism is basically impossible.)
December 2nd, 2010 at 10:15 pm
OT (Sorry, still don’t have email). People at Patterico’s are interested in Uncle’s armless shooter who shoots and reloads with his feet. Anybody can link the specific posts?
December 2nd, 2010 at 10:25 pm
The Harley bailout doesn’t surprise me at all. H-D was threatening to move down south out of Wisconsin in a union busting move. A few weeks ago they announced they were staying put in Wisconsin. It makes sense that the administration would pay them off to maintain the union shop.
December 3rd, 2010 at 1:40 am
So who was it on the Internets that coined the term “presstitutes…?”
Not that GE’s media subsidiaries – particularly NBC and MSNBC – aren’t perfectly willing to suck up to Obama all on their own…but it sure looks like they got handsomely paid for it as well. And that doesn’t even take into consideration all of GE’s other ties to the current administration…
December 3rd, 2010 at 11:21 am
Isn’t GE Capitol legally a bank?
December 3rd, 2010 at 2:38 pm
@ParatrooperJJ – I presume they are. They are the GE financing arm (e.g. when you buy new appliances, they give you financing at 29%). I presume they are like GMAC.