Good news from Treasury! Tax-Payer’s Bank Ramps Up Assets

Bruce Krasting's picture

The Federal Financing Bank (FFB) released its most recent monthly data today. The Treasury owns this bank, meaning the citizens own it. The folks at the FFB are doing a heck of job. Assets rose in the month by a very respectable $866,000,000 (18% annualized growth!). The bank ended November with assets totaling $58.4B; it’s levered 15-1.

A look at where that “growth” came from.

The Post Office got (another) $84.9 mil,  bringing the total IOU up to a hefty $13.6B. I looked at the monthly advance and thought, “Gee, that’s an odd number.” Actually it makes perfect sense. Multiply the November draw ($84.9) by 12 and you get 1,018.8B. Of that number, an even Billion is the legal annual borrowing limit of the PO. The balance of $18.8mm is the interest on the whole IOU at an average interest rate of ...hold on... 0.14%.

 

 

This result speaks for itself. The deep thinkers at the FFB have this figured down to the penny! An “elegant” solution, at that. Near zero cost of debt and the willingness to lend more principal to receive interest (keep the loan “current”) avoids a stinky problem in an election year. An artful kick of the can that almost no one sees.

The FFB made great strides in expanding the book of loans to large private sector companies. Ford got (another) $145 large:

 

 

Private sector loans now total $2.2B. In addition to Ford, the list of borrowers includes Nissan, Fisker, Tesla and Vehicle Production Group.

 

A big “Way to go!” is due for the record-breaking increase in the FFB’s exposure to solar farms during the month. An additional $181mm came on the books. Some mid-night oil was consumed to achieve all that! The loans (secured by a first lien on mirrors and plastic in the desert) now total just shy of $2.2B.

The only negative to this good news is that any aspiring presidential candidate wanting to cast stones at this Administration's solar investments need look no further then this list to find the necessary stones to toss. Still, a very impressive effort. On the flip side, the Administration needs some help in the sand states, and this delivers on a promise to the Greens.

 

 

Another area where the FFB deserves an A+ for its efforts is the big refinancing and new loans for America’s rural utilities. No less than 73 individual loans were refinanced during November. At the same time, a whopping $465,000,000 of new loans were booked. This outstanding performance brought the total utility loans to a record $29.8B. (I hear the boss, Tim Geithner, has a bottle of champagne ready for the day the FFB hits $30B. – Get it cold Tim!)

So who are these titans of industry that the FFB is loaning our money to? And at what terms? It’s a very long list. It can be found here. The following are just a few of the well-know companies that are getting some “extra attention” from Uncle Sam.

 

 

It’s hard to find any new business effort where the FFB is not getting the job done. But, to be balanced, there is one area that needs some attention. Two years ago, the FFB’s portfolio of loans secured by Foreign Military Sales stood at a healthy $545M. Here we are two years later, and the loan balances have fallen to a miserly $294M. That’s a 47% drop in just two years! These Department of Defense sponsored loans are “money good” investments - good business for America. There are plenty of opportunities out there. More effort is warranted. Another $200M of foreign military sales will pay big dividends! Rumor has it, some "big" deals are in the works.

 

 

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rajonmestra's picture

wow ford nissan fisker and tesla are inluded in the major borrowers of this bank? can't believe it especially when i just got my discounted nissan parts. guess the company's experiencing some financial problems. hoping that they're not because i am planning to restore my other car manufactured by them.

arg's picture

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ebworthen's picture

Thanks Bruce, well done.

I should be surprised by this, but it is hard to be surprised anymore.

shortus cynicus's picture

Uncle Scam is doing well.

John_Coltrane's picture

Great investigative journalism Bruce.   This kind of thing makes you sick to see.  No, solar farms would be lucky to last 10 years in the dessert due to dust build up on either panels or mirrors and the subsequent damage due to increased absorbtion and heating (causes lift-off of the interconnects).  Solar power is truly "boutique" technology, like the Tesla car.    

RockyRacoon's picture

The Federal Financing Bank (FFB) is a government corporation, created by Congress in 1973 under the general supervision of the Secretary of the Treasury. The FFB was established to centralize and reduce the cost of federal borrowing, as well as federally-assisted borrowing from the public. The FFB was also established to deal with federal budget management issues which occurred when off-budget financing flooded the government securities market with offers of a variety of government-backed securities that were competing with Treasury securities. Today the FFB has statutory authority to purchase any obligation issued, sold, or guaranteed by a federal agency to ensure that fully guaranteed obligations are financed efficiently.

http://www.treasury.gov/ffb/

Seems as if the original purpose of the FFB has been bastardized?

ebworthen's picture

Thanks Rocky.

Wow, wouldn't want anything competing with their ability to float Treasuries, eh?

And it's clear from reading the rest of the description that they needed a way to not have to make tough decisions like have a budget and stick to it.

They left out an "F" in the name, should have been called the "FFFB" or "Federal Financing Fudge Bank".

whatsinaname's picture

Thanks Bruce yet again.

HD's picture

Where do I apply for a FFB gold card?

Peter Pan's picture

Bruce, this is all brillaint but what do you suggest? We keep on exposing them, but to them it's like water off a duck's back.

Georgesblog's picture

My first thought was, "Who'd they steal it from?". Then it hit me. The ever expanding list of filing fees and escalating Postal rates. Through the now standard Bait And Switch accounting practices, they paint a rosy picture. If you gear it low enough and put glass packs on it, you can make your riding mower sound like a hot rod. Just remember that sound doesn't make the wheels turn.

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

TruthInSunshine's picture

Yep.

Bruce Krasting deserves heaping praise for financial investigative jourmalism that is all too rare.

Bloomberg News or The Atlantic would be lucky to add you to their staffs, Bruce, and so would their readers.

Eireann go Brach's picture

Having the Post Office go BK and threaten the benefits of all the lunatics that work at the PO in which we would see a massive "Gone Postal", is probably more scary than a nuclear bomb, rampant AIDs, Margaret Thatcher naked on a rainy day and having to make out with Nancy Pelosi all in one!

Nolsgrad's picture

Bruce, when I add up the Post Office debt I get 45.789 Billion! What's the deal?

SillySalesmanQuestion's picture

Another great post Bruce! No one has believed me when I have told them that Ford was borrowing hundreds of millions in the past year...Thank You very much sir.

nmewn's picture

Fucking Fascists.

Melin's picture

That's almost exactly what I said to my computer screen, "Fucking Fascism.  We're there."

nmewn's picture

Yes we are. Been that way for a while.

No corporation...bank or otherwise can be in partnership with the state without it being defined so.

As an aside, the confirmation of it all comes when the statist steps forward and says you're being unpatriotic and a menace to civilized society by saying it.

And then the cycle of retribution continues. Personally, I've always liked my dessert served ice cold.

falun bong's picture

Actually, you're wrong. Fascism is defined as an unholy alliance between government, industry...and the military.

(Pause while he realizes what he's just said...)

Brown shirts! Vive Il Duce!

Can't seem to bring myself to learn how to goose-step...I'm sure I'll get the "hang" of it soon enough though.

nmewn's picture

Greenie on ya...lol.

I re-read my third line. I was being too nuanced wasn't I? It was meant as much an attack on the mind numbed masses for tolerating a police state as an attack on government or corps.

"If you see something, say something"...mercury filled curly light bulbs...Bloombergs unconscionable dietary plan for privately owned restaurants...open bribery to get around public law & regs in Chicago etc.  

Total fascism can't take hold and thrive unless the people permit it. Maybe they don't recognize it like we do.

I won't be learning the goose step anytime soon either ;-)

surf0766's picture

Why all the loans to the electric companies

shinola's picture

Dumb question:

Are the rates shown APR, or are they short term rates? Does x.xx% "Qtr" mean x.xx% per quarter (every 3 months)? Does "S/A" mean semi-annual?

Sorry to be so ignorant, but I need some context.

masterinchancery's picture

How do I get a loan?

LouisDega's picture

I will open up an account with this bank only if i get a free toaster and a complimentary cup of coffee and danish. If im not fed, I stay at home

Pants McPants's picture

Another fantastic article, Bruce - of particular interest to me was the section about "green" energy providers.  It's almost as if - gasp! - the government buys votes.  Who wouldda thunk it?

Keep up the good work.  I look forward to your articles.

Seasmoke's picture

i would like to open up a checking account at this bank, where is the nearest branch ?

Almost Solvent's picture

FFB has the lamest logo of any .gov - Justice has the majestic eagle holding arrows & olive branches. Heck, even the CFTC has an eagle holding some scales. 

 

But no eagle for the lowly FFB logo, just wrap the name around a circle encasing the year it was created. 

 

Lame-o