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The Biggest Loser From Cantor's Stunning Collapse: Boeing

Tyler Durden's picture


While Eric Cantor may have been nothing but a Wall Street pawn, eager to appease whoever the highest lobbying bidder du jour was, the biggest loser from his dramatic fall from grace at the hand of the tea party is not a Wall Street company at all, but Boeing. The reason, as Bloomberg explains is that Cantor's defeat threatens congressional reauthorization of low-cost lending that benefits the world’s largest planemaker.

The name of the entity whose fate is at stake: the US Export-Import, or Ex-Im bank. From Ex-Im's description:

It was established in 1934 by an executive order, and made an independent agency in the Executive branch by Congress in 1945, for the purposes of financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk. The mission of the Bank is to create and sustain U.S. jobs by financing sales of U.S. exports to international buyers. The Bank is chartered as a government corporation by the Congress of the United States; it was last chartered for a three-year term in 2012 which will expire in September 2014.

Said otherwise, Ex-Im arranges financing that helps foreign airlines buy jets, a service that Boeing said last month would support $10 billion of 2014 sales. As Congress debates reauthorization, House Financial Services Committee Chairman Jeb Hensarling of Texas is being promoted as a possible Cantor successor. He has said the U.S. should “exit the Ex-Im."

Of course, why a world flooded with $10 trillion in excess liquidity would need yet another taxpayer-funded subsidy for corporate profits is not exactly clear. Which is why Boeing's order book suddenly seems at risk now that big-business advocate Cantor is gone:

Cantor has been an Ex-Im advocate, and his upset brings the bank’s “future into question,” two Bloomberg Industries analysts, Caitlin Webber and George Ferguson, said in a note today. “If the bank isn’t renewed by Sept. 30, the agency can’t finance new deals, though it could service existing commitments, estimated at $114 billion.”


The majority leader was upended by a Tea Party-backed challenger, David Brat, a move that may embolden more-conservative Republicans to buck party leaders. Washington-based Krueger said the bank has now been thrust into a “conservative uproar” over what critics decry as “corporate welfare.”

Keeping alive the Export-Import Bank will be an “even more high-profile/challenging fight,” Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said today by e-mail. Boeing was the “biggest loser” besides Cantor in the Virginia Republican’s surprise loss yesterday, Krueger wrote.

Perhaps, just perhaps, with the victory of David Brat, the crony "politics as usual" play, in which US taxpayers relentlessly subsidize big global corporations, is finally coming to an end. Or at least one can dream.

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Thu, 06/12/2014 - 09:20 | 4848056 quasimodo
quasimodo's picture

WTF is he doing sitting in the left seat?


Thu, 06/12/2014 - 09:24 | 4848066 Toolshed
Toolshed's picture

He is obviously waiting for the stewardess to administer the "Captain's Special". If your woman looked like Moochelle, what would you do?

Thu, 06/12/2014 - 09:29 | 4848078 max2205
max2205's picture

Didn't GS downgrade BA wed....they knew

Thu, 06/12/2014 - 09:38 | 4848098 Manthong
Manthong's picture

When I look at that photo I think of what my dog must think when I read Shakespeare to him.

Thu, 06/12/2014 - 15:11 | 4849727 zerozulu
zerozulu's picture

My dog has always the same look

Thu, 06/12/2014 - 09:29 | 4848079 Jethro
Jethro's picture

Do they make a stewardess outfit that would fit Reggie Love?

Thu, 06/12/2014 - 09:35 | 4848094 Temporalist
Temporalist's picture

It looks like Dennis Gartman is his co-pilot.


How many parachutes did you say this plane had?

Thu, 06/12/2014 - 09:44 | 4848126 LetThemEatRand
LetThemEatRand's picture

Reggie, do you like movies about Gladiators?

Thu, 06/12/2014 - 10:17 | 4848278 smlbizman
smlbizman's picture

its obvious why you didnt ask reggie if he has ever been in a mens locker room...

Thu, 06/12/2014 - 09:47 | 4848143 whatsinaname
whatsinaname's picture

Explains why Boeing stock is up again ?

Thu, 06/12/2014 - 10:38 | 4848357 Spitzer
Spitzer's picture


Buy buy buby the short squeeze ETF

Thu, 06/12/2014 - 09:22 | 4848059 Doubleguns
Doubleguns's picture

Ex-em bank. 

Thu, 06/12/2014 - 09:24 | 4848062 Cognitive Dissonance
Cognitive Dissonance's picture

One of the ways durable goods numbers are goosed is with Boeing reporting 'list prices' for aircraft sold. Of course no airline pays list price and the bigger the order, the larger the discount. Want 200 737 jets? You can get a 35% or more discount off 'list price'. Order just two planes and you can still get a 10% discount minimum.

Thu, 06/12/2014 - 09:40 | 4848106 Spastica Rex
Spastica Rex's picture

They lie?!

Thu, 06/12/2014 - 10:44 | 4848377 SilverIsKing
SilverIsKing's picture

This loss will get passed on down to the end consumer in the form of another fee. Get ready for the fuselage integrity fee. The insures that your airplane doesn't fall apart at 35,000 feet.

Thu, 06/12/2014 - 12:03 | 4848764 Uchtdorf
Uchtdorf's picture

Nah, the fuelless plane will never reach 35,000 ft now that Al-CIAduh has taken over all the oil fields in Iraq.

Thu, 06/12/2014 - 14:47 | 4849613 daveO
daveO's picture

Gotta have higher oil prices for the next round of QE.

Thu, 06/12/2014 - 09:24 | 4848065 NoDebt
NoDebt's picture

I thought the EX-IM Bank was dead years ago.  No joke, I thought it went away sometime in the 90s.  Shows how much I know.

Holy crap, government programs really never die, do they?

Thu, 06/12/2014 - 09:36 | 4848095 Greenskeeper_Carl
Greenskeeper_Carl's picture

"Nothing is more permanent than a 'temporary' government program. "
Forget who said it, probably someone a lot smarter than me

Thu, 06/12/2014 - 09:43 | 4848117 NoDebt
NoDebt's picture

It was Milton Friedman.  I used to love uncle Miltie.  If you ever get a chance, watch his appearance on the old Phil Donahue show.

Thu, 06/12/2014 - 10:26 | 4848312 Pairadimes
Pairadimes's picture

Alas. What I wouldn't give to have him back among the living, debating policy with Krugman on national television.

Thu, 06/12/2014 - 09:49 | 4848155 SWCroaker
SWCroaker's picture

I consider myself fairly well informed, but I don't think I've heard of it before today.  There's a *what* bank?!?  That lends to *who*?!?

Thu, 06/12/2014 - 09:54 | 4848184 NotApplicable
NotApplicable's picture

Ron Paul was about the closest the subject ever got to the mainstream.

If it actually turns into an election issue, I'll be shocked, given it's MIC history.

Thu, 06/12/2014 - 09:30 | 4848072 ebworthen
ebworthen's picture

Established in 1934 by Executive order?

Was it that FDR character, our first Dictator in Chief?

Wouldn't surprise me; I tire of the mythos surrounding that Gold thief and Constitution stomper.

And I thought companies sold things because they made a good product, not because they had a taxpayer supported bank and a bought CONgressman.

Thu, 06/12/2014 - 09:36 | 4848096 overexposed
overexposed's picture

Technically, Lincoln was our first "dictator in chief"... But we all know how THAT turned out (fiat 4eva!)

Thu, 06/12/2014 - 09:27 | 4848077 Staplegun
Staplegun's picture

Oh dear lord, will someone with better photoshop/illustrator skills than I, please do something with this picture.


"Oh Stewardess, I speak jive."

Thu, 06/12/2014 - 10:05 | 4848233 NotApplicable
NotApplicable's picture

I think the best choice would be having the plane about to crash into the Statue of Liberty.

Thu, 06/12/2014 - 10:26 | 4848315 skidsmango1
skidsmango1's picture

too bad he wasn't piloting for Malaysian Air...

Thu, 06/12/2014 - 09:31 | 4848084 valley chick
valley chick's picture

And do not believe for one moment that the voters understand what they truly did.  On one blog a gal mentioned she voted for him because his last name is Brat and she was a military brat.  I tend to agree that Brat was right...it was a miracle.

Thu, 06/12/2014 - 09:50 | 4848111 Dr. Engali
Dr. Engali's picture

Agreed. I was reading a few liberal blogs last night and I couldn't help but laugh to myself when the topic was about Shrillary Clit running in 2016. The comments went something like this "Yes madam president please run, you are the only one who can save us".  We have a nation full of fucking idiots.

Thu, 06/12/2014 - 09:53 | 4848178 valley chick
valley chick's picture

And then someone junks my comment..even low information voters here too.  There is NO way that most the voters understand the Wall Street connection. I stand by my comment.  :-) 

Thu, 06/12/2014 - 09:56 | 4848192 Dr. Engali
Dr. Engali's picture

What I thought was funny was the fact that they felt liked they needed to be saved. I thought that Mr. hopy changy was supposed to do that.

Thu, 06/12/2014 - 10:27 | 4848319 valley chick
valley chick's picture

Agreed. Couldn't save their own arse if need be. Sadly we are seeing a society that loves their servitude.

Thu, 06/12/2014 - 09:56 | 4848195 NotApplicable
NotApplicable's picture

There is no way voters understand ANYTHING, otherwise, they would NOT be voters.

Thu, 06/12/2014 - 09:55 | 4848187 ebworthen
ebworthen's picture

People are pissed off.  The economy sucks.  The depression never ended.  Cantor was a 7 term establishment hack.

Obviously, there wasn't enough bacon to worry about losing, as Boeing is in Washington State not VA.

Anger vote from the base; I wouldn't be surprised to see some incumbent Democrats get axed too.

Thu, 06/12/2014 - 10:00 | 4848207 NotApplicable
NotApplicable's picture

Won't matter. Even if every incumbent gets run out of town, it creates the perfect opportunity for TPTB to remove all of the can-kicking supports, letting the system crash while blaming all the noobs with good intentions.

Then things get interesting quick.

Thu, 06/12/2014 - 10:27 | 4848318 sleigher
sleigher's picture

Good point.  I hadn't thought of that angle.  It is not an implausible scenario.

Thu, 06/12/2014 - 10:37 | 4848351 quasimodo
quasimodo's picture

Very true, we would see the worst come out of many folks. That said, we would see the best from many as well, many that are ready to shit or get off the pot and start from scratch without the corrupt fucks running the show behind the iron curtain.

Thu, 06/12/2014 - 11:34 | 4848621 SAT 800
SAT 800's picture


Thu, 06/12/2014 - 14:50 | 4849638 daveO
daveO's picture

I wondered how long it would take. Sounds like a leftist denigration. Sorta like 'Tea Bagger'.

Thu, 06/12/2014 - 09:32 | 4848086 eddiebe
eddiebe's picture

Yes, corporate welfare is a crying shame, but it's a candle in the sun compared to the federal reserve and central bank 'money from nothing' scam.

Thu, 06/12/2014 - 09:41 | 4848113 yogibear
yogibear's picture

So it's an Airplane sequel? Where's the inflatable co-pilot?

Thu, 06/12/2014 - 10:35 | 4848342 TalkToLind
TalkToLind's picture

The little boy is missing too.  "Have you ever seen a grown man naked?"

Thu, 06/12/2014 - 14:18 | 4849496 highly illogical
highly illogical's picture

He's the subject of the picture

Thu, 06/12/2014 - 09:52 | 4848169 whoopsing
whoopsing's picture

So, what you are saying is Boeings profits are going to disappear faster than M370 ?

Thu, 06/12/2014 - 10:03 | 4848219 NotApplicable
NotApplicable's picture

Nah, they'll do like everyone else, sell bonds to Yellen in order to keep up appearances while hollowing out their capital.

I eagerly await the day of non-non-GAAP accounting so we can finally get some "growth" to emerge.

Thu, 06/12/2014 - 09:56 | 4848197 WTFUD
WTFUD's picture

Exactly, another Scam, solidifying the myth that PRIVATE BUSINESS can take care of itself.

Thu, 06/12/2014 - 10:17 | 4848277 JRobby
JRobby's picture

Ex-im Bank = Blowboy 

Thu, 06/12/2014 - 10:22 | 4848296 European American
European American's picture

Biggest Losers would be the "Friends of Israel" Lobby (Losers) i.e. the "elephant" in the room.

Thu, 06/12/2014 - 10:43 | 4848352 virgilcaine
virgilcaine's picture

Cantor looked Italian to me, who would have thought a J rep from The South?


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