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Solyndra's Whorehouse Lender
If you want to find out what happened with Solyndra you have to follow the money. I did. The half billion dollars of taxpayer dough that is probably lost in Sol came from the Federal Financing Bank (“FFB”). It’s worth a look at this bank to see what else is going on.
FFB is a bank that is owned and controlled by the US Treasury. The chairman of the Board is the TSec. (Tim Geithner). With the (big) exception of the Post Office all of the loans at FFB are guaranteed by government agencies. Technically speaking, FFB has no risks on loans guaranteed by an agency like the DOE. But I don’t think that should absolve Tim Geithner of any responsibility regarding the losses the country faces with Solyndra. If he, (or anyone else at Treasury) puts their pen to a ½ billion loan, they better well know where the taxpayers money is going. That didn’t happen.
FFB has been around for 40+ years. I believe it has always been a bank that has been used and abused by whoever happened to be running the show at Treasury. For example; from 9/30/2008 (Pre - Tim and O) to 9/30/3009 (Post - Tim and O) the FFB lent out $17.1 billion to the nice folks at the National Credit Union Administration’s “Liquidity Fund”. NCU is the guarantor of the deposits in the country’s Credit Unions (similar to FDIC). They were up against it in 2009. They had had no money left in the till to insure that those deposits would be safe. A bailout was needed to avoid a crisis. But rather than have a public debate about this, the FFB just borrowed some money and wrote a check to NCU. Problem solved.
The following are the balance sheet assets of the FFB for fiscal year end 2008 and 09. Note that there were no outstanding loans guaranteed by the DOE in 08. But a year later the number had jumped up to nearly a Bil. It was clear back then that the FFB was rapidly becoming a policy tool of the new administration. By June 30th 2011 the DOE guaranteed loans at FFB has grown to $5.2B. Clearly the Administration is (was?) using the bank to facilitate it's objectives.
The borrowers identified as the beneficiaries of the FFB’s deep pockets include:
Abound Solar
Arizona Solar – UNC
Beacon
Great Basin Transmission
Kahuku Wind Power
Solyndra
Solar Partner I
Solar Partner II
And Solar Partner(s) III – VIII
The names on this list are the problems to be for the DOE. (I can’t wait to find out who we are partnering up with on the I – VIII deals)
The FFB/DOE has also been lending big bucks to some well know names.
Fisker Automotive, Inc.
Tesla Motors, Inc.
Ford Motors
These successful companies owe the FFB a total of $3.8 billion. There is one company that I don’t recognize. But they got $35mm in May at a real fine rate:
The Post Office has $12.9 large out with FFB. The PO has a debt limit of $14b. They will hit that in 2012 (and then go broke). The FFB has been funding the operating deficits at the PO for years. When O took office it was $7b. Playing, “Hide the losses at the PO” is a very old game in D.C.
The FFB also has an active role in providing the much needed lucre for Foreign Military Sales. As of June 30 there was $349mm of IOU’s. (I wonder who those “I”s are. Probably stable governments, right?) If you’re keeping score, the amount outstanding when Bush left office was 50% higher than today.
$33 billion (61% of FFB’s book) is out to Rural Electrics. It would appear that many parts of the country don’t have adequate utilities. Nor do they have the resources to fix the problems. The solution has been to lend them dirt-cheap money with functionally no maturity. This is just a silly accounting game to avoid recognizing that needed infrastructure expense(s) should have been on the budget long ago. This is a close-up of a section of the FFB report:
Note the long maturities and % rates. 35-year money for Lake Land (sounds like a nice place) at Treasuries +30. The following is a pic of all the re-financing's for May and June. I shrunk it because it would just clutter the page; it’s that long. Blow it up on your own or go to the FFB site and look up Press Releases. This goes on every month of the year. This stinks of boondoggle and pork. What are the administrative costs to oversee this? There has to be a better way.
I’m all for education. We’re dead in the water without it. I think there is a role for the government to assist in this. But the FFB? Why are they making loans? Is this just another way to avoid an expense? What are these guy’s in D.C. thinking? Is everything “on the arm” down there? Again, a close up and the totals for two months. This is silly, right?
A minor bad loan is the $493mm of Hope Now Bonds. A good chunk of this is still in cash. But not for long. Treasury is going to use some of this money for the big mortgage ReFi that is in the offing. When that happens there will be no hope of repayment of the Hope Bonds.
There is one more attractive feature for the Chairman of the FFB. With the exception of the notes from the PO, it’s all off balance sheet. When the “Debt to the Penny” calculation is made by the Treasury, the (net of PO) $33b at FFB borrowings are excluded.
In Wall Street terms, that makes the FFB a SPIV and it’s a whorehouse.
Note: I've written about the FFB before. I smelled trouble with this bank. My nose was working.
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I am reminded of the famous Yogi Berra quote: "When you get to the fork in the road, take it."
Yogi insisted the quote made sense. He was giving directions to his house and said that it didn't matter which way you went, both roads led to his driveway. No disrespect to Yogi...but, Bruce it seems like every fork in the road invariably leads to the whore house in DC or as PJ O'Rourke called it, The Parliament of Whores.
Thanks.
Entertainment Professionals is more PC
Don't know about PC but my personal favorite is 'rental units'.
Bruce -thanks for this investigative work. It IS making a difference. I am hearing this on a local conservative radio show (KFSO Brian Susman). I know he reads ZH. Any help you need, let me know.
Bruce,
Whorehouses don't operate on credit, (at least that's what I've been told!)
And, unlike Solyndra, their business model responds to actual public demand, providing a very popular product that will never be rendered obsolete by newer technologies.
Pessimist.
I can just hear the big mukety mucks in the white house right now.....Doooh, it just gets worse and worse
http://www.the-ocean.com/simpsons/homer/worse.wav
Bruce,
Why are you picking on colleges whose student bodies follow a certain demographics? No free money to the Ivy Leagues that you could chase down?
The buck stops here.
These fucking scumbags
Bruce glad you are staying on it
(I venture to say that most recipients have either had political or lobbyist connections)
saw this in the Trib today
Another Obama fundraiser (not Kaiser) linked to loan program that aided Solyndra
Steve Spinner, who helped monitor the Energy Department's issuance of $25 billion in government loan guarantees to renewable energy projects, was one of Obama's top fundraisers in 2008 and is raising money for the president's 2012 reelection campaign
http://www.chicagotribune.com/news/nationworld/la-na-solyndra-donor-2011...
Separately I understand that Abound Solar is connected to a prominent congressman
(here's info on Vehicle Production Group)
http://www.vpgautos.com/mobility-vehicle-media/news-and-events/press-inq...
the money behind them is a guy named Drasner who is Chairman of Three Seasons Capital (owns the Redskins) and a republican
On the surface VPG seems legit and likely would have done more wiht the $$ than Solyndra
For 2 years i follow the Solyndra's Story, i just find that interesting patent story, and it looks like a high concept scam.
deceptive practices
A tubular system similar (glass tube inside glass tube) was developed by Owens-Illinois, Inc. (former company to today's NYSE listing) at their tech center in Perrysburg, OH. This was in the midst of the Jimmy Carter fueled oil "crisis." It was quickly found to be non-competitive with even the primitive flat panel systems of that time. One cannot blame cheap Chinese manufacture for the failure of Solyndra. Solyndra's array was made of silicon (the glass form) and, aside from it's cost and weight, was inherently less efficient than the flat panels. The Obama administration and their bureaucrats in the Energy Department did not do their homework and are either disinterested or too stupid to do so. Distinterested because they don't think like people who actually measure performance and results against economic gain or too stupid to check history and facts. Secretary Chu should know better, but I doubt even he has a clue to the problems Solyndra's system had to overcome.
the vpg seems like another total loser. here is they vehicle they want to build:
http://www.vpgautos.com/experience-MV-1/mobility-vehicle-features
they just lost a contest for a fleet of taxis for nyc. nissan won that with this vehicle:
http://www.youtube.com/watch?v=qnNlLR2caNY
VPG got a fraction of what the others have received and is pursuing a legit option (NatGas) of which the US has an almost unlimited supply. As for the vehicle info you link to above, couldn't agree more, imagine people in wheel chairs wanting to have additional mobility - I mean they alread have wheels
great that a Japanese company won the NYC taxi contract good for America
the nissan is factory built to accomodate wheelchairs, it's in the video. in case you're not familiar with nyc, there is virtually nowhere for taxis to refuel with natgas. not very practical yet. yes, it would be nice to have a company in the usa get the contract but the vpg apparently isn't the best product.
"On the surface VPG seems legit and likely would have done more with the $$ than Solyndra"
Why, because he's an R? Puh -leze. One day you'll learn that the political labels, Blue or Red, disappear once you elevate into the elites. You can be a scum bag and be a rethuglican or a demoncrat - makes no difference.
read the fucking info ahole