A Win Win Any Banker Would Love

[southsidesignmaker]

www.youtube.com/watch?v=ssl5yb7FewA&aia=true


Such a "win win" for the entitled few.

Mac you have always been the "Shell Answer Man", what are your thoughts, (is this really possible?).

[macrockett]

Nice catch, and they probably have it right as the the terms of the deal. I haven't at it thought. Here is what I found. www.fdic.gov/bank/individual/failed/IndyMac.html

Specifically, these 3 docs would most likely spell things out.
www.fdic.gov/about/freedom/IndyMacMasterPurchaseAgrmt.pdf
www.fdic.gov/about/freedom/IndyMacLoanSaleAgrmt.pdf
www.fdic.gov/about/freedom/IndyMacSharedLossAgrmt.pdf


Speaking of George Soros, BFF of President Obama, he has a very large position in Petrobras. Per SeekingAlpha, seekingalpha.com/article/209263-soros-is-bullish-on-petrobras-suncor-and-directv it is the second largest holding in one of his funds at approximately 4%. He has had a sizable position quite some time.

Last fall, the US, through its Import-Export Bank, loaned Petrobras $2 Billion (here is a Bloomberg article from last summer on the subject: www.bloomberg.com/apps/news?pid=newsarchive&sid=aogq9sBiBhYo Here is the Export-Import Banks explanation of the loan. www.exim.gov/brazil/pressrelease_082009.cfm

Petrobras is one of the few companies that doesn't need to borrow the money, at least not from the U.S. So why the arrangement?

[macrockett]

Juxtapose the above, where Petrobras will be using the loan to drill in waters much deeper than where the BP incident happened, which would seem to raise environmental issues, with another recent case of the Import-Export bank failing to guarantee a $300 million loan for mining equipment going to Indian, for environmental reasons.

I find it hard to defend the loan to Petrobras, for drilling for oil in very deep waters, while denying the loan guarantee for mining equipment to extract coal in India. Sounds like cronyism to me especially when the vote was along party lines....and the reason given for the decision.

JUNE 27, 2010, 3:50 A.M. ET

Bucyrus International Fears Loss of India Order

By JAMES R. HAGERTY

Bucyrus International Inc. said it may lose a $310 million order for mining machinery from a subsidiary of Reliance Power Ltd. of India because of a decision by the U.S. Export-Import Bank against providing loan guarantees for the project.

The decision is equivalent to "throwing 1,000 jobs in the ditch," Tim Sullivan, chief executive of the South Milwaukee, Wis., maker of mining equipment, said in an interview Friday. Bucyrus has estimated that the order would create or protect 984 jobs in 13 U.S. states.

The board of the Ex-Im Bank voted 2-1 Thursday against supporting the project, a senior bank official said. The bank is required to consider the environmental effects of projects it backs, the official said. The mining equipment would be used for a coal mine that is to supply a new power plant in Madhya Pradesh, India.

Mr. Sullivan said that the order from Reliance was contingent on the guarantees and that he feared Reliance would turn to rival suppliers from China or Belarus.

The bank board split along party lines. Two Democratic members—Fred Hochberg, chairman, and Diane Farrell—voted against supporting the project, while a Republican, Bijan R. Kian, voted in favor.

In a statement, Mr. Hochberg said: "President Obama has made clear this administration's commitment to transition away from high-carbon investments and toward a cleaner energy future." He said he voted against the guarantees, which would lower the cost of financing for Reliance, because of the "projected adverse environmental impact."

The decision could put President Barack Obama in an awkward spot during a planned visit to Wisconsin Tuesday and Wednesday. "This was a very bad decision," Tom Barrett, the Democratic nominee for governor of Wisconsin, said in a statement. Mr. Barrett, currently mayor of Milwaukee, added: "We have to focus on creating jobs." He pledged to "explore avenues to reverse the outcome." That is likely to be difficult as there is no appeals process for votes by the Ex-Im Bank board.

Write to James R. Hagerty at [e-mail]