NYC Letter: People In High Places -- Jon Corzine V

Day 1,184 of CHOPE

Remember this?

OBAMA CAMPAIGN MAY RETURN CASH
FROM MF GLOBAL'S CORZINE
MF Global Chief Was Major Fundraiser For Obama
WASHINGTON, November 2, 2011 (Reuters)

One month later.

OBAMA CAMPAIGN RETURNS CASH
FROM MF GLOBAL'S CORZINE

CHICAGO December 23, 2011(Reuters) - President Barack Obama's campaign has returned some $70,000 in contributions made by embattled MF Global chief Jon Corzine and his wife, a campaign official said on Friday.

There is no surer sign of political toxicity than returned cash contributions. Yet former NJ Senator-turned-Governor and clueless MF Global CEO and possible embezzler Jon Corzine is so politically toxic (and here) that Money Team Barry opened a vein and let the tainted (by bad press) maxed-out contributions dribble back to the Corzines. Their $70,000 was not worth fanning off the noisome stink that attends Mr. Corzine.

As of early last month, the former Goldman Sachs chief had raised donations of at least $500,000 for Obama's 2012 effort.

Wait a minute. So the Corzines' personal contributions are returned but it's OK to keep the cash Mr. Corzine wheedled out of his rich pals? You bet. What's a little stink compared to $500,000 every month or so?

JON CORZINE STILL BUNDLING FOR OBAMA

April 20, 2012 (TWS) - Corzine, according to the Obama campaign, has once again helped raise more than $500,000.

(He was likewise named a bundler in January, when the Obama campaign last released the names of their money men.)

"MF Global and its brokerage sought Chapter 11 bankruptcy after a $6.3 billion bet on the bonds of some of Europe’s most indebted nations prompted regulator concerns and a credit rating downgrade. Corzine quit MF Global Nov. 4," Bloomberg reported.

As ABC reported, "President Obama once hailed [Corzine] as an 'honorable man' and one of his 'best partners' in the White House." Since that time, Obama has tried to distance himself from Corzine, who at one point was considered for the treasury secretary slot.

But not too much distance. About enough of an arm's length to reach Mr. Corzine's money, which is other people's money for which Money Team Barry lacks the reach.

A reminder:

For the past four years, you've had an honorable man at the helm of this state during one of the most difficult periods in its history. You've had a leader who's put the interests of hardworking New Jersey families ahead of the special interests. You've had a leader who's fought for what matters most to the people of New Jersey. That's the kind of Jon -- the kind of governor that Jon Corzine has been. That's the kind of governor that Jon Corzine will continue to be. And that's why New Jersey needs to give Jon Corzine another four years. (Applause.)

Mr. Obama,
previewing the "big difference",
gives it up for Jon Corzine, who goes on to lose
HACKENSACK, New Jersey
October 21, 2009 (White House)

CHOPE.

"Jon, what do you think we should do?"

NYC Letter: Investing With Team Barry, Part I Redux -- Fisker Karma

MERRY CHRISTMAS! +5

Day 1,073 of CHOPE

Team Barry spent $529M of your money on a firetrap. Not to worry. Only the rich will incinerate.

FISKER OFFICIALLY RECALLS
239 KARMAS OVER BATTERY SAFETY ISSUE

December 29, 2011 (green.autoblog.com) - After confirming that the A123 battery in the Fisker Karma has a battery safety issue and then figuring out a way to fix the problem, Fisker and the NHTSA have announced an official recall for 239 Karmas. The official reason for the recall is that:

Within the high-voltage battery, certain hose clamps may have been positioned incorrectly during assembly. if positioned incorrectly, the battery compartment cover could interfere with the hose clamps, potentially causing a coolant leak from the cooling hoses.

Consequence: If coolant enters the battery compartment, an electrical short could occur possibly resulting in a fire.

ELECTRIC CAR COMPANY THAT RECEIVED A
$529M FEDERAL LOAN
RECALLS VEHICLES

December 30, 2011 (The Hill) - The Transportation Department’s National Highway Traffic Safety Administration (NHTSA) said Thursday that the company, Fisker Automotive, will recall its Karma vehicles made between July 1, 2011, and Nov. 3, 2011, because of a faulty electric battery component that could cause a fire.

... The Energy Department issued a $529 million loan to Fisker in April 2010 for the development of its plug-in electric vehicles.

The administration has come under fire for issuing the loan after ABC News reported in October that Fisker is making its vehicles in Finland because it could not find a contractor in America to manufacture them.

Are any Americans benefiting from a taxpayer-financed $106,000* made-in-Finland luxury sport sedan? Without question.

Fisker is backed by California VC firm Kleiner Perkins Caufield & Byers, of which one Al Gore happens to be a senior partner. More incriminating, Kleiner Perkins execs are Democrat donors and partner John Doerr serves on Obama’s Council on Jobs and Competitiveness.

Does that mean Mr. Doerr has made a $3 dinner raffle contribution?

And the nature of these programs are going to be ones in which for every success there may be one that does not work out as well. But that’s exactly what the loan guarantee program was designed by Congress to do, was to take bets on these areas where we need to make sure that we’re maintaining our lead.

Mr. Obama,
explaining investment as gambling
NEWS CONFERENCE
WASHINGTON October 6, 2011 (White House)

Your government picks another stinker!

CHOPE.

Betting your money.

------------------------------------
* Not exactly the people's car. According to the National Automobile Dealers Association, the average price of a new car sold in the United States is $28,400. That's $77,600 less than the sporty Karma Fisker. Team Barry has arranged financing by the plebs to manufacture a car for the rich. [Pause.] Mr. Obama helps create the very class disparities he decries.

------------------------------------------------------------------------

UPDATE 12.31.11: Ed Morrisey at Hot Air remarks:

If and when alternate technology vehicles are ready for market and financially viable for the consumer, they will flourish if the demand exists for them and the price point is tolerable for drivers. But the "up in smoke" results of these experiments in Washington picking winners and losers on the taxpayer dime is instructive, if expensive. A123 Systems received $380 million of your money to produce batteries for cars and was also supposed to produce a lot of jobs. Instead, they’ve laid off a large portion of their workforce. A second battery maker, EnerDel, cashed in to the tune of $118 million in the form of a federal grant to make batteries for Think. They are now bankrupt. The list goes on from there.

Is anyone listening? And will they remember these stories next November?

Team Barry: Say what?

NYC Letter: People In High Places -- Jon Corzine IV

Day 1,051 of CHOPE

Smartest guy in world finance can't find his pants.

The Washington Post can't make up its mind on this story. Three times it has changed the headline. From the original money quote:

CORZINE: 'I SIMPLY DO NOT KNOW
WHERE THE MONEY IS'

To a four hankie:

JON CORZINE TELLS PANEL
HE WAS 'DEVASTATED' BY
MF GLOBAL BANKRUPTCY

To the current gosh-maybe:

CORZINE SAYS HE COULD HAVE BEEN
MISUNDERSTOOD ON TRANSFER
OF MF GLOBAL ACCOUNTS

WASHINGTON December 8, 2011 (WaPo) - Jon S. Corzine, the former U.S. senator and New Jersey governor who presided over the collapse of the commodities brokerage MF Global, told lawmakers Thursday that he was "devastated by the enormous impact" the firm’s bankruptcy has had on many people’s lives.

... In his prepared testimony submitted before the hearing, Corzine said he could not explain what happened to "many hundreds of millions of dollars" that the firm was holding for customers. He said he was "stunned" to learn shortly before the firm sought bankruptcy protection at the end of October that MF Global could not account for the money. Mr. Corzine:

I simply do not know where the money is, or why the accounts have not been reconciled to date.

... Asked why there was a shortfall in customer funds, Corzine said that "many transactions… occurred in those last chaotic days." He said he was not aware of all of those transactions and that "as a consequence it would be very hard for me to speculate why or where that shortfall took place."

Asked if he authorized a transfer of customer funds, Corzine responded, "I never intended to break any rules, whether it dealt with the segregation rules or any of the other rules that are applicable."

When Lucas asked if Corzine was aware of any transfers, authorized or unauthorized, out of customer accounts, Corzine said, "I’m not in a position, given the number of transactions, to know anything specifically about the movement of any specific funds."

Whoa. At the beginning of the year MFG's capitalization was just $1.4 billion. Its exposure in European debt was $6.3B. $1.2B has gone missing, a not inconsiderable sum given MFG's capitalization and exposures. Monies frittered away, Mr. Corzine would have you believe, in frenzied trades too numerous to recollect -- or record as required by law.

Financial firms compile and circulate daily internal activity sheets. These sheets summarize trades, transfers, and related activity in aggregates of the prior day's business. Everyday a high-level snapshot of the current disposition of the firm's assets is available to management. Nobody in MFG management noticed a sudden -- convenient -- materialization of monies to cover European debt exposures? No one noticed seepage in the integrity of segregated client assets? The monies didn't go missing one crazy day, but over upwards of two crazy weeks.

So Mr. Corzine's defense goes something like this, everything just went crazy, and because everything was crazy, MFG failed to heed the craziness, and unheeded the craziness went unrecorded. Yeah.

Another witness slated to testify Thursday, CME Group Executive Chairman Terrence A. Duffy, shed more light on the missing money in his prepared testimony. CME Group runs markets for derivatives, including the Chicago Mercantile Exchange, and oversees MF Global.

Duffy said his group’s auditors found no sign that customer funds were missing as of Oct. 26. CME Group auditors returned to MF Global on Oct. 30, because it learned from the CFTC [Commodity Futures Trading Commission] that a draft accounting report at MF Global showed a $900 million shortfall in customer funds caused by an "accounting error," Duffy said.

The auditors found no accounting error.

Instead, about 2 a.m. on Monday, Oct. 31, MF Global informed the CFTC and CME "that customer money had been transferred out of segregation to firm accounts," Duffy said.

"Transfers of customer funds for the benefit of the firm constitute serious violations of our rules" and of federal law, Duffy said.

And for those who like a thick slathering of irony on their cake:

In his prepared testimony, Corzine also recounted that he lobbied against regulators’ effort to tighten restrictions on how brokerages such as MF Global could invest clients’ money. ... At the hearing, Corzine told lawmakers that he "did not exert undue or improper influence on regulators."

This week, the CFTC finally adopted restrictions that Corzine and others in the industry had fought.

Not to worry future futures customers, that barn door is now closed. For the rest of you, be assured, today the CFTC is committed to do the job it should have done yesterday.

A reminder.

And we trusted his judgment.

Joe Biden,
shilling Jon Corzine's business acumen
EDISON, New Jersey October 20, 2009 (Breitbart TV)

CHOPE.

"Jon, what do you think we should do?"

NYC Letter: Ben Bernanke, Confidence Man

Day 1,041 of CHOPE

Special Super Government Gambler Edition

Back in 2008 while we bemoaned the $700B Troubled Asset Relief Program (TARP),* wherein the government socialized bank losses so banks might live to bank another day -- and keep the profits -- the Fed had already embarked on a secret bank loan program of knee-buckling prodigality.

SECRET FED LOANS GAVE BANKS
$13 BILLION UNDISCLOSED TO CONGRESS

November 27, 2011 (Bloomberg) - The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

... A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

The headline misses the heart of the story. Thirteen billion dollars is so much pocket lint in the context of the Fed secret loans. [Pause.] The publicly debated $700B TARP is chump change in that same context. Brace yourself.

$7.77 Trillion

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he "wasn’t aware of the magnitude." It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

The players flat-out lied to the public.

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed "one of the strongest and most stable major banks in the world." He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility "at the request of the Federal Reserve to help motivate others to use the system." He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation.

Howard Opinsky, a spokesman for JPMorgan (JPM), declined to comment about Dimon’s statement or the company’s Fed borrowings. Jerry Dubrowski, a spokesman for Bank of America, also declined to comment.

... Bernanke in an April 2009 speech said that the Fed provided emergency loans only to "sound institutions," even though its internal assessments described at least one of the biggest borrowers, Citigroup, as "marginal."

On Jan. 14, 2009, six days before the company’s central bank loans peaked, the New York Fed gave CEO Vikram Pandit a report declaring Citigroup’s financial strength to be "superficial," bolstered largely by its $45 billion of Treasury funds. The document was released in early 2011 by the Financial Crisis Inquiry Commission, a panel empowered by Congress to probe the causes of the crisis.

Conceptually American governance depends on checks, that is oversight, and balances, that is countervailing powers. Power -- the juice of governance -- is not meant to concentrate, because concentrated power can be wielded without consensus and eventually without consent. Government will never be wholly and directly transparent to the governed, however elected officials are expected to exercise oversight of the back-channels of power. Policy -- the shape power takes -- is meant to be deliberated, because when power is wielded quickly, recklessly, without sufficient support the result is tyranny and bollix. To wit,
TARP. To wit, Obamacare. To wit, Frank-Dodd.

Oversight of the Federal Reserve is limited to a twice yearly report to Congress on what it's up to.

The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view.

... The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak.

... The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma -- investors and counterparties would shun firms that used the central bank as lender of last resort -- and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.

There are no countervailing checks on the Federal Reserve's powers other than appointments to its Board of Governors. Beyond that the Federal Reserve is not directly accountable to any government entity.

The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should "lead to praise of the Fed, that they took this extraordinary step and they got it right," says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.

No. That the Fed rolled more lucky sixes than craps doesn't mean it got it right. It means the Fed was extraordinarily lucky. What "appropriate collateral" could a "marginal" Citigroup put up against $45 billion of Treasury funds? The Fed has shored up the status quo, which -- surprise -- is ready to fail again.

BOFA, GOLDMAN SACHS, CITIGROUP
CREDIT RATINGS CUT BY S&P
November 29, 2011 (SFG/Bloomberg)

The lynch-pin of credit is confidence. The lynch-pin of confidence is trust. Not hope. Mr. Bernanke preserved confidence in a system no longer trustworthy in light of the facts by withholding the facts and hoping for the best. [Pause.] Lucky Mr. Bernanke. Now no one trusts the banks nor the Fed.

The idea that an institution or a nation or an entitlement is too big to fail only hastens the fail. The illusionary permanence of bigness becalms the urgency to reform, closes the space for disruptive innovation, and lessens the resolve to endure the inevitable pain. The failed status quo is invested in too big to fail, which curtails the remedy and keeps the fail.

CHOPE.

Too big to fail. Too big to fix.

------------------------------------
* More moans here and here and here and here and here.

NYC Letter: Soak The CHOPE IV -- Warren Buffett Redux

Day 1,035 of CHOPE

Mr. Buffett wants to pay more taxes. [Pause to forget that.] Mr. Buffett doesn't want to pay more taxes.

STOP CODDLING THE SUPER-RICH
by Warren Buffett

OP-ED August 14, 2011 (NYT) - Our leaders have asked for "shared sacrifice." But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

The pain has arrived! The IRS has assessed $642.7M in tax owed against NetJets, a unit of Warren Buffett's Berkshire Hathaway Inc. NetJets brokers fractional ownerships in and rentals of corporate jets. NetJets contends the tax is wrongly assessed and is suing.

BUFFETT’S NETJETS SUES U.S. OVER
$642.7 MILLION TICKET-TAX ASSESSMENT

November 17, 2011 (Bloomberg) - NetJets, the private-aircraft company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), sued the U.S. over excise taxes and penalties totaling $642.7 million assessed against the company.

The Internal Revenue Service improperly assessed the so-called ticket tax, an excise tax on payments made in exchange for air transportation, NetJets said in its complaint in federal court in Columbus, Ohio, dated Nov. 14.

NetJets seeks a refund and abatement of the ticket tax. The company claims in its suit that Congress intended the tax to apply to passengers who use commercial or charter aircraft owned by others.

... NetJets also claimed that the IRS didn’t provide any guidance about the types of fees for which the company would have to collect the ticket tax from passengers.

Mr. Buffett will snort this is an apples-to-oranges distortion of his plea to be more heavily taxed personally. And he would be right. However, Ira Stoll at the Future Of Capitalism finds the obvious irony:

When the tax man doesn't coddle Mr. Buffett, he sues! Whatever the merits of the underlying case, and whatever distinctions might be made between Berkshire the company or its customers and Mr. Buffett as an individual, it's still an amazing situation. Or maybe not so amazing to those of us who have argued all along that the tax increases Mr. Buffett favors would barely apply to him and would actually improve his position relative to his competitors. When it comes to a tax that actually hurts him or his company, he's willing to sue so that he keeps getting coddled.

Mr. Buffett is not a fan of corporate taxation. You may recall his Berkshire Hathaway is in tax arrears for FYs 2002-2004, which it does not dispute but has yet to pay. But Mr. Buffett likes to pick and chose among the taxes he or his extended corporate self deign to pay.

On Mr. Buffett's larger point that the current tax system is unfair, we concur. It is 72,536 pages unfair. It is unfair because it is incomprehensible but we are obliged in law to comply with it. The IRS may advise one way, only to rule the opposite. Acting in good faith, in accordance with IRS instructions or guidelines or advice, you are still subject to penalties and seizures if the IRS has erred or changed its mind or taken a perverse interest in you. Recourse is onerous and expensive by design. Raising taxes will not make this incomprehensible system fairer. It will only make it more monstrous.

Mr. Buffett has the money and the heft to game the IRS. Few of us do.

CHOPE.

Pay what you like.

NYC Letter: People In High Places -- Jon Corzine III

Day 1,034 of CHOPE

The Double-Or-Nothing Edition

You've had a leader who's put the interests of hardworking New Jersey families ahead of the special interests. ... That's the kind of Jon -- the kind of governor that Jon Corzine has been.

Mr. Obama,
shilling the integrity of Jon Corzine
HACKENSACK, New Jersey
October 21, 2009 (White House)

And we trusted his judgment.

Joe Biden,
shilling Jon Corzine's business acumen
EDISON, New Jersey October 20, 2009 (Breitbart TV)

Curiouser and curiouser.

The Old Man put us onto this development.

MF GLOBAL TRUSTEE SAYS SHORTFALL
COULD EXCEED $1.2 BILLION

November 21, 2011 (NYT) - The court-appointed trustee overseeing the liquidation of MF Global’s brokerage now estimates that the shortfall in the firm’s customer funds could be more than $1.2 billion, double previous estimates.

... The decision to release the updated figure on Monday came after authorities concluded that much of the customer money had left the firm, these people said. By MF Global’s estimates to regulators, roughly $600 million in customer money was missing. But as forensic accountants pored over MF Global’s books in recent weeks, they began to question those estimates.

... It is unclear what is behind MF Global’s prior, substantially lower estimates. The matter is being investigated by [the trustee, James W. Giddens] and a collection of federal authorities, including the Justice Department.

Authorities are still searching for the money, and are considering two possibilities. One is that MF Global used the money to meet trading partners’ demands for extra cash, which could come back. The other is that it was used to cover trading losses, which would be unrecoverable.

A spokeswoman for MF Global declined to comment.

How does $1.2B in client funds go missing in a company run by the smartest guy in world finance that Team Barry knows -- and trusts?

Jon Corzine is the MFG CEO, and his stewardship bankrupted the company. He was the super smart steward Team Barry tried to foist on New Jerseyans, and itself contemplated to head the United States Treasury. New Jersey dodged that bullet and the Treasury bullet was never fired. The MFG clientele, not so lucky. Mr. Corzine personally lobbied Washington to kill regulations that would have bulletproofed client money.

CHOPE.

Also missing, the as advertised integrity and smarts.

NYC Letter: Your Government At Work, Part IV -- Export-Import Bank

Day 1,027 of CHOPE

From the moment I take office, my top priority will be to do everything I can to make sure your tax dollars are protected.

Mr. Obama,
then-candidate announcing his top priority du jour
LA CROSSE, Wisconsin October 1, 2008 (CNN)

We have long ceased fainting away every time that nice candidate Obama is double-crossed by the less nice President Obama.

BIG BANKS BINGE ON BUSH-OBAMA
'VENTURE SOCIALISM'

November 13, 2011 (WaEx) - Largely out of the media spotlight, the federal government operates a network of financial subsidy programs that benefit big banks by putting taxpayer money at risk. And President Obama, that self-styled populist scourge of Wall Street, is increasing this racket of private profit and public risk that Sen. Jim DeMint (R-SC) aptly dubbed "venture socialism."

In its latest act of venture socialism, the Obama administration has offered a novel taxpayer backstop to General Electric, the multinational industrial conglomerate that is famously close to this administration, and that spends more on federal lobbying than any other company. The government accessory in this instance is the Export-Import Bank of the United States, a federal agency that finances U.S. exports at taxpayer risk.

... Now Obama has created a new Ex-Im subsidy for banks. The name is a mouthful: "The Supply-Chain Finance Guarantee Program."

Here's how to understand what's going on: Imagine I'm a shoe exporter. I ship shoes to stores in Europe, and then I wait a few weeks to get paid by the stores. But what if more orders come in, and I need to restock the shoes right away, before I get paid for my last shipment? I could just borrow from a bank. But another option is that I can just sell my invoices, in effect, to the bank. If the shoe stores owe me $1,000, I might sell Citibank, for $950, the right to be paid by those shoe stores. That's called supply-chain finance, and it's a quintessential capitalist arrangement.

But in the midst of this commerce among banks, exporters, and importers, Barack Obama has inserted the unwitting U.S. taxpayer. As part of his Export Initiative aimed at doubling U.S. exports in five years, the Supply-Chain Finance Guarantee Program guarantees 90 percent of the banks' exposure. In our hypothetical example, if the European shoe stores welched, the U.S. taxpayers would cover 90 percent of Citibank's loss.

This is very sweet. The shoemaker gets immediate payment for a 5% discount on the receivable, and the bank makes a 5.26% profit on a $950 exposure. The Ex-Im through its guarantee becomes a subordinate claimant on the receivable with an $855 exposure. Now the bank has a $95 exposure on which it stands to make the same $50 profit, but now it's a 52.6% profit. What is unclear to us is what's the upside for the taxpayer on his $855 exposure?

The taxpayer usual gets notoriously bum deals on the at-risk use of his money -- for examples: TARP, PIPP, and the ARRA.

Citi and JP Morgan were the first two banks admitted to this new subsidy program, and earlier this month, Ex-Im welcomed GE Finance. So GE, which already rakes in tens of billions of Ex-Im subsidies as an exporter (in September, for instance, Ex-Im approved a $425 million subsidy to help GE sell locomotive equipment to Kazakhstan), will now also pocket Ex-Im subsidies as a financier, too.

... Failed and bailed-out housing finance giants Fannie Mae and Freddie Mac have a similar arrangement. Like Obama's Export Initiative, and the green-energy subsidies, politicians always have some grand justification. It saves the environment! It helps small business! It creates jobs! It makes the American Dream come true!

But whenever politicians are moving around large chunks of money, you can bet the whole thing is being subtly guided by the businesses with the best lobbyists and the most access to power.

... If you ask the Wall Street Occupiers, it's capitalism and the free markets that drive banks' booming profits. If you look more closely, it's venture socialism.

In venture socialism the private sector garners profits and the government absorbs losses, because losses are investments in our nation's future. [Pause.] That's a peek at "the vision thing".

CHOPE.

It's not capitalism. It's a vision.

NYC Letter: Investing With Team Barry, Part I -- Fisker Karma

Day 1,003 of CHOPE

Mr. Obama wants to invest your money -- after the government takes it away from you. He's got lots of hot tips and a novel investment strategy.

And the nature of these programs are going to be ones in which for every success there may be one that does not work out as well. But that’s exactly what the loan guarantee program was designed by Congress to do, was to take bets on these areas where we need to make sure that we’re maintaining our lead.

Mr. Obama,
explaining investment as gambling
NEWS CONFERENCE
WASHINGTON October 6, 2011 (White House)

The investment managers of Team Barry place bets with a 1 in 2 shot at payout. All it takes is one sweet roll to win back your loses and then some. Regular readers may recall this is Obamanomics 107: high-rolling creates prosperity.

And here's the double sweet. Team Barry is placing those bets on American companies, creating jobs in America, making things in America.

(A) That’s why this week, we launched what we’re calling an Advanced Manufacturing Partnership. ... Their mission is to come up with a way to get ideas from the drawing board to the manufacturing floor to the marketplace as swiftly as possible, which will help create quality jobs, and make our businesses more competitive. But they also have a broader mission. It’s to renew the promise of American manufacturing. To help make sure America remains in this century what we were in the last – a country that makes things. A country that out-builds and out-innovates the rest of the world.

(B) We used to have the best stuff. Think about -- the world used to say, let's travel to America. Let's see the Golden Gate Bridge. Let's see the Hoover Dam. Let's see these amazing things that America built. Are we going to be the generation where we stop building?

Mr. Obama,
(A) WEEKLY ADDRESS
STRENGTHENING AMERICA BY INVESTING AT HOME
PITTSBURGH June 25, 2011 (White House)
(B) pitching his unpassable American Jobs Act
before its second fail in the Democrat Senate
NORTH CHESTERFIELD, Virginia October 19, 2011 (White House)

Alright! Let's get busy, America!

CAR COMPANY GETS U.S. LOAN,
BUILDS CARS IN FINLAND

October 20, 2011 (ABC News) - With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.

Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the company's manufacturing jobs are still limited to the assembly of the flashy electric Fisker Karma sports car in Finland. Henrik Fisker, the car company's founder and namesake:

We're not in the business of failing; we're in the business of winning. So we make the right decision for the business. That's why we went to Finland.

Wait. Fisker submitted a business plan without a commitment to American manufacturing and the DOE waved it through? [Long inhalation.]

OK. No manufacturing jobs. OK. No building the best stuff here. [Brightening.] At least Team Barry has bet your money on an eco-friendly environmentally responsible car.

FISKER KARMA ELECTRIC CAR
GETS WORSE MILEAGE THAN AN SUV

October 20, 2011 (Forbes) - The Fisker Karma electric car, developed mainly with your tax money so that a bunch of rich VC’s wouldn’t have to risk any real money, has rolled out with an nominal EPA MPGe of 52 in all electric mode (we will ignore the gasoline engine for this analysis).

Not bad? Unfortunately, it’s a sham. This figure is calculated using the grossly flawed EPA process that substantially underestimates the amount of fossil fuels required to power the electric car, as I showed in great depth in an earlier Forbes.com article. In short, the EPA methodology leaves out, among other things, the conversion efficiency in generating the electricity from fossil fuels in the first place.

... Press responses from Fisker Automotive highlight the problem here: electric vehicle makers want to pretend that the electricity to charge the car comes from magic sparkle ponies sprinkling pixie dust rather than burning fossil fuels.

... Congrats to the Fisker Karma, which now joins corn ethanol in the ranks of heavily subsidized supposedly green technologies that are actually worse for the environment than current solutions.

[Hat tips: Duncan and Hervé]

CHOPE.

Place your bets.