Category Archives: news analysis

Taxpayers Make Money on Treasury Bailout of Mortgages

While this is good news in a slowly recovering economy, taxpayers are still on the hook for billions upon billions advanced to Freddie Mac and Fannie Mae – up to $100 billion each in capital – to prop up their $5 trillion in outstanding mortgage debt, of which an unknown amount will never be repaid. Continue reading

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Nissan Recalls Infiniti M45 for Bad Electronic Gas Gauges

In the pre-Toyota cover-up fines from NHTSA, it appears that Nissan ignored the safety problem and warranty data. In the post Toyota fine era at NHTSA, the number of recalls from Japanese makers, not coincidentally, has accelerated dramatically.

This is the sixth major Nissan recall since the fall. Earlier recalls involved Nissan and Infiniti gasoline leaks, oil leaks, sudden stalling on Sentra models, Juke turbocharger boost sensors, and defective Rogue electric power steering control computers. Continue reading

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Electric Sales for Prius C Hybrid after Three Days

While Detroit Three Automakers concentrate on increasing the transaction prices of their new models, Toyota Motor Sales is proving that price matters. In the first three days since the small Prius C went on sale it sold 1,201 units, bypassing sales of the much more expensive – two times the price – Chevrolet Volt and Nissan Leaf for the entire month of February. The Volt plant in Detroit suspends production for five weeks starting next Monday because of slow sales. Continue reading

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BizJet Pays $11.8 M Fine under Foreign Corrupt Practices Act

BizJet International Sales and Support will pay an $11.8 million criminal penalty to resolve charges under the Foreign Corrupt Practices Act for bribing government officials. The Tulsa, Oklahoma-based aircraft maintenance company with links to Lufthansa was under investigation by the Department of Justice for bribing government officials in Latin America to secure contracts to perform aircraft services for government agencies. Continue reading

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Ally Squeals after Flunking New Fed Capital Stress Test

Taxpayers still own more than 70% of Ally, with the owner – the Fed – saying it does not have enough capital to endure a theoretical recession that would produce an unemployment rate of 13% percent, a 21% drop in housing prices and as economic slowdowns in Europe and Asia. This admittedly severe test – surpassing even the Bush Administration’s dismal record of economic stewardship – may or may not be anything more than an academic exercise.

In what I take to be a gratuitous insult to taxpayers, Ally said, “Further, the Federal Reserve has not objected to the ongoing payments of preferred dividends and interest on the trust preferred securities and subordinated debt.”

Darn right we expect you to pay interest on the loans. Continue reading

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Milestones: Freedom of Information Act Web Site

Any citizen can make a FOIA request about any topic, although there are still considerable delays, prevarications and redactions by government agencies in making politically sensitive information available. Moreover, Congress still largely conducts its business behind closed doors with access only given all too often to the privileged wealthy few and monied special interests that dominate our ‘pay to play’ political process. Continue reading

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Nissan to Run Delta Wing at Le Mans in P.R. Stunt

The real Japanese race to watch at Le Mans this year will be a Toyota, which will run a hybrid in the LMP1 class. Last year’s race was the most exciting in years – maybe decades – as Peugeot and Audi fought an epic battle. In a fiercely fought 24 hours of racing with sporadic rain, wrecks and attrition, a diesel-powered Audi R18 won the 24 hours of Le Mans in the fastest, factory run P1 class. The Audi was followed by four Peugeot 908s. The three drivers of the second place Peugeot – Simon Pagenaud, Pedro Lamy and Sebastien Bourdais – competed to the very end as their 908 was only 13 seconds behind. Nissan and Chevrolet Corvette did win in other classes. Continue reading

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Anti Nuke Group Wants GM Peugeot to End Iran Business

If GM CEO Dan Akerson thought the Chevrolet Volt was a political football, one can only imagine what he thinks about Peugeot and the Iranian nuclear weapons controversy. GM only wants to share logistics, platforms and purchasing with the French company, but is now being told it is “unacceptable for GM to enter into a partnership with a company that so openly deals with a regime that is responsible for the deaths of U.S. and NATO servicemen and threatens U.S. and global security.” Continue reading

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Focus Electric Approved for $10,000 in Taxpayer Handouts

The California Environmental Protection Agency’s Air Resources Board (CARB) has dictated that owners of the new 2012 Ford Focus Electric can drive in high-occupancy vehicle (HOV) lanes. Owners also will be able to receive up to $10,000 in tax credits between the state’s new $2,500 rebate and a $7,500 federal tax incentive – both funded by taxpayers at a time of soaring deficits. Critics call this socialism for the rich. These subsidies appear to be crucial for sales success of the Focus Electric. Without them, the car lists starting at $39,995. This means a typical payment to buy the compact car – with $4,000 down – is almost $800 per month for 48 months at Ford’s 7% interest rate. The gasoline-fueled Focus starts at just over $17,000. Continue reading

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Airlines Profitable as Passenger Fees Continue to Rise

As part of their third-quarter revenue, the airlines collected almost a billion dollars – $898 million – in baggage fees and $603 million from reservation change fees from July to September 2011. Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are reported in a different category with other items and cannot be identified separately. Continue reading

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Unemployment Unchanged in February as Politicians Blather

Alan B. Krueger – Chairman of the Council of Economic Advisers and an employee of President Obama – said, “Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression. It is critical that we continue the economic policies that are helping us dig our way out of the deep hole that was caused by the recession that began at the end of 2007, including measures to help the sectors that were most severely harmed by the bubble economy that misdirected investment and created too few durable jobs.”

Critics said only the fact that Krueger issued the statement electronically prevented his nose from growing longer while delivering it. Continue reading

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EPA Says Fuel Economy at Record High, CO2 at Record Low

One giant caveat here: The EPA window sticker rating is not the same as the EPA CAFE rating used by automakers. As a general rule window sticker ratings are 25% lower than the numbers used for CAFE compliance. Moreover, the sticker ratings have been adjusted downward in recent years after drivers complained they were too optimistic. Continue reading

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DOE Nixes Carbon Motors Loan in Midst of Taxpayer Subsidy Storm

How you view this depends on what you think of the role of government should be – if any- in nurturing the U.S. economy and promoting energy independence, among other thorny issues. Herewith, two, admittedly simplified interpretations:

– a needed correction after the ‘green jobs’ that were supposed to be established by such subsidies were revealed as just the latest lies from politicians;
or
– simply the squealing of corporate pigs when feeding at the taxpayer trough was stopped

And there remains another real issue about whether there is much – if any – thinking behind the proper role of vast government subsidies, but don’t look for that debate in the sound-bite campaign now under way. Continue reading

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Ford China Sales Up 28% in February, But Down 15% YTD

The new Focus, built at Changon 2 is the first of 15 new or revised models due from Ford China by 2015. If the downward sales trend continues, Ford Motor will be in financial trouble because three additional new manufacturing facilities are scheduled to open by the end of 2013. Continue reading

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Will Rising Gasoline Prices Hurt New or Used Car Sales?

What this means for the recovering U.S. vehicle market is unclear. New vehicle sales have been slowly rising but are still far below pre-Great Recession rates. What is clear is that this is bad news for drivers and energy consumers, is that global liquid fuels consumption is at historically high levels. Continue reading

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