Feds Play Santa for U.S. Corporations
If the federal government is Santa Claus -- and it increasingly appears to be -- then America's corporations are lining up in front of him with their wish lists.
Instead of getting a lump of coal for their bad behavior, however -- giving mortgages to unqualified borrowers, securitizing those mortgages and mailing the risk off into a black hole, failing to produce competitive products, overbuidling, etc. -- America's corporations are likely to get a shiny new bike.
And a multi-billion-dollar bike, at that.
Let's just take a look at what America's ailing industries are asking Santa to bring them for Christmas -- if not sooner:
-- Some 300 U.S. corporations -- including Ford, Pfizer, IBM and Verizon -- plan to send a letter to Congress today asking lawmakers to delay parts of the 2006 Pension Protection Act, which requires businesses to fully fund their pensions for several years.
The group is not asking for money, just some time to come up with the necessary cash so they don't have to cut jobs to divert money to their pensions. The pension funding rules start phasing in on Jan. 1.
Today's letter follows a similar request to Congress last month from the American Benefit Council, the National Association of Manufacturers and the U.S Chamber of Commerce.
-- In an earnings release yesterday morning, home builder Robert Toll of Toll Brothers ticked off his Santa-please-bring-me list, asking the government to: "reduce mortgage rates and fees; provide incentives such as buyer tax credit for the purchase of all types of homes."
The Ticker is Twittering!
Financial services sector:
-- In addition to asking for more cash and credit (AIG) and government-backed buyouts (Bear Stearns), companies in this sector are asking for non-cash gifts from Santa that will allow them to get more cash.
For instance, yesterday American Express announced it had applied for and received permission from the government to become a bank holding company, enabling it to get investor deposits, shoring up its cash base.
This is sort of like getting a peerage from a king. No direct cash involved, but the title gets you into the best parties.
-- What hasn't Detroit asked for? GM, Ford and Chrysler have made enough requests for three Christmases. Starting late last summer, Detroit asked for $25 billion in direct government loans to help them retool factories to produce more fuel-efficient vehicles. Christmas came early, as Washington approved the request last month.
But already, Detroit is asking for another $25 billion in loans, and House Speaker Nancy Pelosi (D-Santa's Helper) wants to get an aid package through next week's lame-duck session of Congress.
Further, when GM was mulling a merger with Chrysler, GM chief executive Rick Wagoner was asking for government help to make the merger happen.
Now, the merger's off the shelf, at least temporarily, and GM is back to worrying about having enough cash on-hand. Off Santa's lap, kid. Give another kid a turn.
So we ask you: What do you think the government should bring for Christmas and for whom?
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