General Electric, the world’s largest industrial company, has quietly become the biggest beneficiary of one of the government’s key rescue programs for banks.
At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.
The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.
As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company’s massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government’s actions have been “powerful and helpful” to the company, GE chief executive Jeffrey Immelt acknowledged in December.
GE’s finance arm is not classified as a bank. Rather, it worked its way into the rescue program by owning two relatively small Utah banking institutions, illustrating how the loopholes in the U.S. regulatory system are manifest in the government’s historic intervention in the financial crisis.
“We’d like to regulate companies according to what they do, rather than what they call themselves or how they charter themselves,” said Andrew Williams, a Treasury spokesman.
Who doesn’t believe that if the government closes this loophole others will be found or created by bribe… er, um, campaign fund hungry politicians for big companies?
#14, #15, One could simplify the whole deal and say the innkeeper owes the butcher e100 for the meat and the butcher owes the innkeeper e100 for the room. In that case the tourist’s extraneous e100 has nothing to do with it, so I retract my earlier statement.
One could also complicate matters and say the innkeeper starts out at -e200 — he owes the butcher but is also out an e100 room from the hooker. When all is said and done, the innkeeper still isn’t paid for the room as the tourist ran off with e100.
So, which is it?
“One could also complicate matters and say the innkeeper starts out at -e200 — he owes the butcher but is also out an e100 room from the hooker. When all is said and done, the innkeeper still isn’t paid for the room as the tourist ran off with e100.
So, which is it?”
Your take is slightly incorrect. He’s out 100 from the hooker, yes, but this isn’t a *debt*, it’s a loan for which he is the creditor. The hooker still owes him e100, and he still owes the butcher e100. So really, the entire system is a wash, since everyone has a debt of 100 from one party and credit of 100 from another party, and given the cyclical nature of the system (it all comes back to the innkeeper) then what *should* have happened is that all debts were cancelled long before the tourist ever got there. (This is simple transition – if A owes B 100, and B owes C 100, and C owes A 100, then C can just tell B he’s collecting from A and then cancel his already extant debt with A.)
And, again, the innkeeper doesn’t make off worse than before because, once the tourist cancels his deal with the innkeeper, the innkeeper has a debt to the tourist, which he promptly pays back with the 100 note.
lol, bobbo should be tickled that his post has gotten far more consideration than it deserved.