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70% Failure Rate: Obama Admin Issuing Junk Bonds

January 13, 2012 8:12 AM

Tax dollars backing some “risky” energy projects

By Sharyl Attkisson

(CBS News)

WASHINGTON – Solar panel maker Solyndra received a $528 million Energy Department loan in 2009 – and  went bankrupt last year. The government’s risky investment strategy didn’t stop there, as a CBS News investigation has uncovered a pattern of cases of the government pouring your tax dollars into clean energy.

Take Beacon Power — a green energy storage company. We were surprised to learn exactly what the Energy Department knew before committing $43 million of your tax dollars.

Documents obtained by CBS News show Standard and Poor’s had confidentially given the project a dismal outlook of “CCC-plus.”

Read the documents

Asked whether he’d put his personal money into Beacon, economist Peter Morici replied, “Not on purpose.”

“It’s, it is a junk bond,” Morici said. “But it’s not even a good junk bond. It’s well below investment grade.”

Was the Energy Department investing tax dollars in something that’s not even a good junk bond? Morici says yes.

“This level of bond has about a 70 percent chance of failing in the long term,” he said.

In fact, Beacon did go bankrupt two months ago and it’s unclear whether taxpayers will get all their money back. And the feds made other loans when public documents indicate they should have known they could be throwing good money after bad.

It’s been four months since the FBI raided bankrupt Solyndra. It received a half-billion in tax dollars and became a political lightning rod, with Republicans claiming it was a politically motivated investment.

CBS News counted 12 clean energy companies that are having trouble after collectively being approved for more than $6.5 billion in federal assistance. Five have filed for bankruptcy: The junk bond-rated Beacon, Evergreen Solar, SpectraWatt, AES’ subsidiary Eastern Energy and Solyndra.

Others are also struggling with potential problems. Nevada Geothermal — a home state project personally endorsed by Senate Majority Leader Harry Reid —  warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.

SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. On its last financial statement, SunPower owed more than it was worth. SunPower’s role is to design, build and initially operate and maintain the California Valley Solar Ranch Project that’s the subject of the loan guarantee.

First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose – even as taxpayers were forced to back a whopping $3 billion in company loans.

Nobody from the Energy Department would agree to an interview. Last November at a hearing on Solyndra, Energy Secretary Steven Chu strongly defended the government’s attempts to bolster America’s clean energy prospects. “In the coming decades, the clean energy sector is expected to grow by hundreds of billions of dollars,” Chu said. “We are in a fierce global race to capture this market.”

Economist Morici says even somebody as smart as Secretary Chu — an award-winning scientist — shouldn’t be playing “venture capitalist” with tax dollars. “Tasking a Nobel Prize mathematician to make investments for the U.S. government is like asking the manager of the New York Yankees to be general in charge of America’s troops in Afghanistan,” Morici said. “It’s that absurd.”

Read the rest here.

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Documentary: What I have been afraid to blog about: The ESF and its History

At the very least, there is massive amounts of interesting data points that correlate to the markets.

Cheers on your holiday weekend !

[youtube://http://www.youtube.com/watch?v=2ssrcD5GdPQ 450 300] [youtube://http://www.youtube.com/watch?v=ImuVUab6WW0&feature=endscreen&NR=1 450 300] [youtube://http://www.youtube.com/watch?v=8Qsll_5-FXc&feature=related 450 300] [youtube://http://www.youtube.com/watch?v=iK-741ISz94&feature=related 450 300] [youtube://http://www.youtube.com/watch?v=lQf-u2nCVSw&feature=endscreen&NR=1 450 300]



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Obama to Shrink Six Agencies Into One

In a effort to reduce bureaucracy Obama proposes shrinking 6 divisions into one. On the one hand it sounds great, on the other we must consider checks and balances….and the consolidation of power.

Full article  

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Conservatives Remain the Largest Ideological Group in the US

Overall, the nation has grown more polarized over the past decade

by Lydia Saad

PRINCETON, NJ — Political ideology in the U.S. held steady in 2011, with 40% of Americans continuing to describe their views as conservative, 35% as moderate, and 21% as liberal. This marks the third straight year that conservatives have outnumbered moderates, after more than a decade in which moderates mainly tied or outnumbered conservatives.

Read the rest of Gallup’s report here.

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Why You Should Consider Smaller Government

[youtube://http://www.youtube.com/watch?v=cNXyBIPAJqQ 450 300] [youtube://http://www.youtube.com/watch?v=i4PE1gZn7s4&feature=related 450 300]

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U.S. plans Taliban peace talks

WASHINGTON – The US plans a major push next week to jump-start peace talks with the Taliban, senior Obama administration officials said, amid the first concrete signs of progress toward a negotiated end to the 10-year-old war in Afghanistan.

The press comes amid the potentially embarrassing emergence of a video Wednesday that appears to show US troops urinating on Afghan insurgents’ corpses. Its authenticity hasn’t been confirmed.

The US special representative to Afghanistan and Pakistan, Marc Grossman, will meet with Afghan President Hamid Karzai in Kabul to seek his approval to resume US negotiations with Taliban representatives over confidence-building measures aimed at laying the ground for direct Afghan-Taliban talks.

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Obama raised $68 million from October-December

Read here:

President Barack Obama raked in more than $68 million combined for his re-election campaign and the Democratic Party during the final three months of 2011, gearing up for a formidable challenge against his Republican opponent later this year.

The large fundraising quarter helped Obama’s campaign and the Democratic National Committee surpass $220 million in 2011, bankrolling the president’s re-election campaign as Republicans settle on a nominee. Republican frontrunner Mitt Romney raised $56 million for the primary through Dec. 31, his campaign announced Wednesday, far outpacing his GOP opponents.

Obama campaign manager Jim Messina said Thursday in a video to supporters that the campaign collected more than $42 million for the quarter, with the DNC bringing in more than $24 million, along with $1 million for a joint fund to help state parties in key states. The amount helped the president’s team beat an internal goal of $60 million combined for the quarter.

Obama’s campaign collected $750 million in 2008, prompting speculation that it could top $1 billion this time. Messina said the lofty figures have created “a challenge that keeps coming up. Too many Obama supporters think we don’t need their money or they don’t need to give now.”

However, Messina said, “The billion-dollar number is completely untrue.”

Obama, facing no primary opponent, has stockpiled a large campaign bank account, but Democrats expect parity with Republicans once the party chooses a nominee. Romney has been a formidable fundraiser and most party leaders expect a large amount of money to flow into his campaign if he sews up the nomination. Republican-leaning Super PACs have also fared better than Democratic-backed outside groups, further offsetting the president’s fundraising.

Obama’s campaign has emphasized a large number of donors and small donations generated from online giving. Messina said the campaign and DNC had generated 1.3 million donors, with 583,000 people giving during the most recent quarter. More than 98 percent were for donations of $250 or less and the average donation was $55, Messina said.

The money will help build Obama’s organization and let his advisers prepare for the upcoming campaign, a point the president emphasized at a large Chicago fundraiser on Wednesday night.

“If you’re willing to work even harder in this election than you did in that last election, I promise you change will come,” Obama said. “If you stick with me, we’re going to finish what we started in 2008.”

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Geithner holds economic meeting with Chinese

Beijing (CNN) — U.S. Treasury Secretary Timothy Geithner met Chinese leaders on Wednesday with discussions expected to focus on cooperation between the world’s top two economies to bolster global growth as well as possible sanctions on Iranian oil exports.

Geithner held talks Wednesday with Vice President Xi Jinping — tipped to become China’s next president later this year— and Vice Premier Li Keqiang.

He was scheduled to meet Prime Minister Wen Jiabao later Wednesday.

Geithner met with his counterpart, Vice Premier Wang Qishan, on Tuesday night and pledged cooperation on global economic issues.

China and the United States “have a lot of issues to talk about in the areas of economy, finance, trade and investment,” Wang said at a news briefing on Tuesday.

While China has called on the United States to loosen export regulations, Washington has said that Chinese currency controls keep the yuan undervalued and give Chinese exporters an unfair advantage at a time when the global economy is suffering.

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