Tuesday, April 21, 2009

Up date on Chrysler Negotiations with its lenders: Banks Reject U.S. Terms for Cutting Chrysler Debt - WSJ.com


The lenders have told Treasury officials they believe they could recover at least 65% of their loans if Chrysler is liquidated in bankruptcy.

In their counteroffer, the lenders blasted the government's proposal as unfair. They said it is "in no way a shared sacrifice."

Banks Reject U.S. Terms for Cutting Chrysler Debt - WSJ.com

AIG Bonuses are we paying for them or not?

Treasury to Give AIG $30 Billion, Recoup Bonus Payments

by Paul Kiel, ProPublica - April 21, 2009 5:28 pm EDT

Remember those AIG bonuses that went to the employees in the division that sunk the company? Well, here’s a sort of resolution. The Treasury Department wasn’t able to rescind them, but is taking a different route to get the money back – applying a “commitment fee” when it forks over nearly $30 billion more.
Here’s how it’s working, according to a regulatory filing yesterday. Treasury has already invested $40 billion in AIG. And in early March, it committed to providing $30 billion more – bringing Treasury’s total to $70 billion. AIG released the finalized agreement yesterday for that extra $30 billion, and in it, it disclosed that Treasury would be deducting $165 million (the total of the bonuses) from the $30 billion total. So that means AIG is actually only getting $29.835 billion.

Treasury has also charged AIG a “commitment fee” for the amount of the bonuses. The government is allowing AIG to pay that money back in an installment plan, three $55 million payments over the next five years. The fee is to be paid from the “operating cash flow” of the company – presumably guarding against the possibility that AIG would simply be paying the taxpayers back with their own money.
Not exactly the simplest solution, but there you have it.

In Spain’s Falling Prices, Early Fears of Deflation - NYTimes.com


Spain’s jobless rate, already a painful 15.5 percent, could soon reach 20 percent, a troubling number for a major industrialized country

economists fear Spain may be in the early grip of deflation, a hallmark of both the Great Depression and Japan’s lost decade of the 1990s, and a major concern since the financial crisis went global last year.

Deflation is not just a Spanish concern. Luxembourg, Portugal and Ireland have reported price drops, too.

The jobless rate for those under 25 is at a Depression-like level of 31.8 percent

In Spain’s Falling Prices, Early Fears of Deflation - NYTimes.com

Parking at Elburn Metra station to more than double | Daily Chronicle

The project will create an additional 329 parking spaces, including 306 standard stalls, eight spaces for those with disabilities, 10 spaces for motorcycles and scooters

Click on the following to read the rest of the storyParking at Elburn Metra station to more than double | Daily Chronicle

GM, Chrysler to get $5.5B more in government loans - Kansas City Star


General Motors Corp. could get as much as $5 billion more in federal loans, while Chrysler LLC could get $500 million as they race against government-imposed deadlines

Read the rest of the story:  GM, Chrysler to get $5.5B more in government loans - Kansas City Star

Leader in Kansas banking says FDIC rates skyrocketing - Kansas City Star


premiums last year were $20,000 and could soon reach $400,000 to $600,000 because of new rates set by FDIC.

Click here to read the rest of the story:  Leader in Kansas banking says FDIC rates skyrocketing - Kansas City Star

Robert Reich’s statement of tax facts

[IMG_0516.JPG]Taken from:  http://www.robertreich.blogspot.com/

A Short Citizen's Guide to Kooks, Demagogues, and Right-Wingers On Tax Day

No one likes to pay taxes, so tax day typically attracts a range of right-wing Republicans, kooks, and demagogues, all of whom tell us how awful we have it. Herewith a short citizen's guide (that is, a citizen's guide that's short rather than a guide for short citizens) responding to the predictable charges:
1. "Americans pay too much in taxes." Wrong: The United States has the lowest taxes of all developed nations.
2. "The rich pay too much! The top ten percent of income earners pay over 72 percent of all income taxes!" Misleading: The main reason the rich pay such a large percent is they've become so much richer than the bottom 90 percent in recent years. If you look at what they pay as individuals -- the percent of their incomes over and above the highest rate below them -- you'll see a steady decline over the years. When Republican Dwight Eisenhower was president, the marginal rate on the highest earners was 91 percent (after deductions and tax credits, closer to 50 percent); by 1980 it was still up there, at 70 percent (an effective rate of closer to 45 percent); under Bill Clinton, it was 38 percent (an effective rate closer to 28 percent).
Look at the after-tax earnings of families and you'll see what's really going on. Between 1980 and 2000, the after-tax earnings of families at the top rose more than 150 percent, while the after-tax earnings of families in the middle rose about 10 percent. The Bush tax cuts of 2001 and 2003 raised the after-tax incomes of most Americans by a bit over 1 percent -- but raised the after-tax incomes of millionaires by 4.4 percent.
3. "The bottom 60 percent pay only 3.3 percent of the taxes!" Misleading again. Most Americans are paying more in sales taxes than they ever have. Property taxes have also been rising at a steady clip. And Social Security taxes have also risen (thanks to the Greenspan Commission), while earnings over about $100,000 aren't subject to Social Security taxes. So-called "sin" taxes (mostly beer and cigarettes) have also skyrocketed. All of these taxes take a bigger bite out of the paychecks of people with lower incomes than they do people with higher incomes.
4. "Obama is raising your taxes!" Wrong. Obama is cutting taxes for 95 percent of Americans, by about $400 per person a year -- not a whopping tax cut, to be sure, but not a tax increase by any stretch. Only the top 2 percent will have a tax increase, but even this tax increase is modest. Basically, they go back to the rates they were paying under Bill Clinton (their deductions will be limited to 28 percent, which is only fair). And they won't start paying this until 2011 anyway.
5. "The huge debts we're wracking up will cause your taxes to rise!" Wrong again. When it comes to the national debt, as I've said before, the relevant statistic is the ratio of debt to the gross domestic product. The only sure way to bring that debt down and make it manageable in future years is to get the economy growing again -- which requires that, in the short term, the government spend a lot of money (because consumers and businesses won't). In the long term, the biggest source of concern is rising health-care costs. And that's something Obama and Congress are aiming to tackle.
6. "We have a patriotic duty to stand up against Washington taxes!" Just the opposite. We have a patriotic duty to pay taxes. As multi-billionaire Warrent Buffett put it, "If you stick me down in the middle of Bangladesh or Peru or someplace, you'll find out how much this talent is going to product in the wrong kind of soil. I will be struggling thirty years later." President Teddy Roosevelt made the case in 1906 when he argued in favor of continuing the inheritance tax. "The man of great wealth owes a particular obligation to the state because he derives special advantages from the mere existence of government."
An acquaintance from law school, now a partner in one of Washington's biggest and wealthiest law firms, explained to me one day over lunch how he and his partners use tax rules to create offsetting taxable gains and losses, and then allocate the gains to the firm's foreign partners who don't pay taxes in the United States. That way, they keep the losses here and shelter their income abroad. I noticed he had an American flag lapel pin. "You're supporting our troops," I said, referring to his pin. "Yup," he replied, entirely missing my point.
True patriotism isn't cheap. It's about taking on a fair share of the burden of keeping America going.

An Army Takeover Quells Violence in Mexico - washingtonpost.com

More than 10,000 soldiers and federal agents patrol Juarez's gritty streets

Centrally located, with access to U.S. interstates, Ciudad Juarez is the most coveted "plaza" of the Mexican drug trade, which funnels 90 percent of all cocaine entering the United States

"We know [the judges] exist, but they work in a place that is unknown to the public,"

The military operation will be evaluated in September, said Reyes, the mayor. He said he hopes a civilian police department will be ready to replace the army and federal police by the end of the year

Read more by clicking on the following:  An Army Takeover Quells Violence in Mexico - washingtonpost.com