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Archive for October 28th, 2009

GMAC Asks for 6th Bailout

Sweet Jeebus. Turns out two federal bailouts worth $12.5 billion, a $4.5 million gift from the state of North Carolina, $153,000 in cash from Mecklenburg County, and $84,000 in bribes from the city of Charlotte is not enough for Al “Il Duce” Molina. Nope.

This fascist shakedown artist wants another — wait, firm numbers are hard to come by for this bank — somewhere between $2.8 billion to $5.6 billion more from the federal government. This would be downright laughable except for the fact that anyone paying attention knew GMAC was not a going concern six months ago.

Chris Whalen and Institutional Risk Analytics saw it clearly back then, saw that GMAC could not function without continued subsidy. Here is what Whalen says today:

In relative terms, GMAC has received far more subsidies than any other zombie and seemingly has no access to the private markets in terms of raising new equity. Of the 19 banks subject to the Fed’s stress tests earlier this year, GMAC is the only bank that has not raised the required private capital.

Looking at the latest 10-Q from GMAC filed with the SEC, the only question we have is why isn’t GMAC already in bankruptcy? In Q2 2009, GMAC reported a net loss of $3.9 billion on $3.6 billion in net revenue. …The Democrats know that if GMAC is forced into bankruptcy, then GM will be unable to finance their paltry auto sales and will likewise end up back in bankruptcy. In the event, the web of subsidies and co-dependency between the UAW and the Democratic Party will begin its final collapse. We can’t wait.

And you can bet the Uptown crowd will stand up and cheer GMAC bailout #6 just as they did for bailouts 3, 4, and 5. Why change when the credit keeps coming?

Because our quality of life as a nation, state, city, and community is at stake. We simply cannot continue to reward failure. We cannot debase our currency — invent something called “credit” and hand it out by fiat — and pretend the real world and real economy does not notice. We are maybe 12 or 18 months away from turning into Argentina.

Where is FZ when we need him?

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Like the Panthers: Last Post on the Housing Crash

Facts do not matter here, either.

I am tired of trying to explain how and why the worst is yet to come — certainly locally, probably nationally — in the real estate sector. With one in every 136 homes in foreclosure, how could it be otherwise?

I will say that the lingering collapse will significantly blunt any partisan advantage the GOP expects to have in the 2010 midterm elections. There will be additional bailouts and attempts to prop up the system, probably by Q2 of 2010, and many Republicans responding to the construction and developer lobbies will support them.

Me, I got my 30-year fixed at a stupid low rate. I suggest everyone within blogshot do the same ASAP and then just sit back and watch the carnage. There is nothing we can do for them now. We tried.

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Foxx, Lassiter Rewrite History of 2006 Tax Hike

It is clear that both Anthony Foxx and John Lassiter think that whatever the Uptown paper of record says becomes fact. Their account of the 9-percent property tax hike adopted by the Charlotte city council in 2006 exactly tracks the received Uptown account. And it is wrong.

First, lets note Lassiter’s sudden interest in rolling back property taxes. Is this fiscal conservatism in the last week of the campaign too little, too late? We’ll find out on Tuesday. If turnout in solidly Republican precincts across South Charlotte is low, the answer will be “Yes.”

Now back to 2006. In short, the city required a tax hike to make the numbers work for the $158m. Wachovia arts complex. Recall as originally proposed a 4-percent car rental tax hike would help pay for the venues along with about $40m. in future property tax revenue diverted from the General Fund. This synthetic tax increment financing mechanism essentially permitted Wachovia to direct that its property tax bill be used to pay for things Wachovia wanted and liked. Nice deal, huh?

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