About Me 0100: Being Right or Making Money

It's as if the Fed was functioning in a complete vacuum and has never heard of foreclosure fraud.

WASHINGTON — As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms....

Since 1968, the Truth in Lending Act has given homeowners the right to cancel, or rescind illegal loans for up to three years after the transaction was completed if the buyer wasn't provided with proper disclosures at the time of closing.

Attorneys at AARP have used the rescission clause for decades to protect older homeowners stuck in predatory loans with costly terms. The provision is also helping struggling homeowners to fight a wave of foreclosure cases in which faulty and sometimes-fraudulent disclosures were used....

Critics say the proposed change by the Fed would render the rescission clause useless. The Fed proposal would require homeowners who seek a loan rescission through the courts, to pay off the entire loan balance before the lender cancels the lien.

"This, of course, would be almost impossible for most consumers to do because they can't come up with the money until they get out of the loan. And they can't get out of the loan until the lien is released," said Barry Zigas, director of housing and credit policy at the Consumer Federation of America. "None of us are quite sure what purpose is being served by this proposal or what prompted it."

According to the New York Times which ran an editorial against the proposal earlier in the week, the Fed wants to eliminate this protection for homeowners because of their “concern over banks’ compliance costs." Since the Fed certainly can't be concerned about banks fraudulently taking people's homes from them.

What Zach Carter says:

It’s hard to imagine a way for the Fed to disgrace itself any further than it did by failing to rein in the mortgage mess over the past decade. But if it proceeds with this effort to protect banks that engaged in predatory lending, it will not only be guilty of falling down on the job and looking the other way, but of actively encouraging illegal mortgage lending.

Best case scenario: the Volt is being sold at cost. The reality: it's being sold at a big loss and the taxpayers that have been footing the bill via the bailout and now via a tax abatement that will cost taxpayers some $42 billion over the next few years and that the media isn't reporting (Detroit News spews Obama propoganda: Feds to recoup $36 billion in bailout money, fail to mention GM receiving $45 billion tax furlough). Evidence that the Volt is being sold at a loss comes on page 4:

Q: How many batteries does the Volt have? What would be the cost to replace them? -- reader Michael Douglas

A: The Volt has one battery pack, assembled in Brownstown Township. It's 5.5 feet long, shaped like a T, and weighs 435 pounds. That battery contains 288 cells. The flat, laminated, 5-by-7-inch cells each weighs a little less than a pound, according to Prabhakar Patil, CEO of Troy-based Compact Power. The cells currently come from LG Chem in South Korea, but Compact Power, an LG Chem subsidiary, will start making them in Holland, Mich., in 2012.

Peterson declined to provide the current cost of the battery. For now, all you need to know is that GM will foot the cost of repairing or replacing the battery during the time covered by the transferable warranty. Once drivers start nearing the end of the warranty, GM expects the battery to cost less than it does today, Peterson said, as the technology becomes more common.

We can glean some information on the cost from a prior post of mine back in September: Stimulus: Granholm, Obama celebrate giving $368+ million to MI plant to produce $33,000 car batteries. The key snippet:

Costs are high. The government has estimated that a battery with a 100-mile range costs about $33,000, ...

If that's the government estimate, you know the costs are even higher. Try $45,000. The Volt gets about half that mileage, but we can't just cut the cost in half because 1) the control system has to be there regardless of size, and 2) an active vapor-compression refrigeration system is still going to be operating because of the tremendous heat generated by the batteries when discharging. So for the Volt, the battery cost with supporting subsystems will be around $30,000. As a point of reference, GM is selling the non-hybrid version of the Volt - the Chevy Cruze - at $16,000. That's right - the batteries in the Volt costs twice the entire non-hybrid vehicle. From that, one could estimate that the true cost of producing the Volt is $46,000. Add a profit margin and the Volt should be selling for $50,000, not $41,000. You could buy three Chevy Cruzes for that plus some luxury options on each.

The Volt is being subsidized at least twice by the federal government taxpayer: once at the front end (production - possibly as much as $9,000) and once at the back end ($7,500 purchase tax credit). Only in the world of government is this considered a winner.

Previously:

Sen Carl Levin (D-MI): Chevy Volt (that hasn't sold a single unit, fills up on coal and the feds have to pay you $7,500 to buy one) proves "doubters" wrong

PJM Article: Chevy Volt, Nissan Leaf Actually Get Only 23, 25 MPG

Good grief: COAL-powered 2011 Chevrolet Volt named Green Car of the Year

Nobel Peace Prize given to Obama's expensive, coal-guzzling car that the government has to pay you $7,500 to buy and hasn't sold one unit yet on open market

Detroit Free Press clueless that the Chevy Volt is a hybrid

Video of Granholm: Criticizing the Chevy Volt is un-American!

Top auto supplier CEO: Government too focused on electric vehicles, "ignoring" other technologies

Video: 'The Truth About Cars' Editor Edward Niedermeyer on why the Chevy Volt is a $41,000 electric lemon

That $41,000 price tag for the Chevy Volt? Could be $61,000

Robert Gibbs: Hey - I bet Rush Limbaugh doesn't drive one of those awesome GM F-150s

Granholm to Congress: Put battery incentives in energy bill because it will do for jobs nationally what it did for jobs in Michigan

Obama comes to Michigan, touts money he's giving to KOREAN battery plant to create jobs at $504,667 each

Irony: Michigan touts electric cars for economic growth, but denies permits for power plants to charge them

Detroit News: Buyers won't recoup extra cost of electric vehicles, but electric vehicles will save Michigan's economy or something

Confirmed: Chevy Volt 230 mpg claim is bs

Side-splitting headline of the day: GM touts Volt with 230 mpg city rating (by using Enron accounting methods)

Another Plug-In Hybrid False Mileage/Energy Savings Claim

Government report: electric cars won’t reduce carbon emissions and likely create more

UNTRUE! - Enron Accounting on the 100 mpg Hummer H3

DetNews: 12 projects expected to create 2,900 jobs

bench craft company scam

Wednesday, December 8, 2010

Being Right or Making Money

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