How Stimulus Works - Solyndra

YEAH!!! FBI is going after Solyndra while the Goldman Sachs of the world are still given a pass. Wall Street created the need for stimulus not the mismanagement of Solyndra.

I am now paying attention.

goman wrote:

YEAH!!! FBI is going after Solyndra while the Goldman Sachs of the world are still given a pass. Wall Street created the need for stimulus not the mismanagement of Solyndra.

This administration is clown shoes. Criminy.

I can't help but feel that the President is trying to make an example out of them to save political face and seem tough on waste, we'll have to see how this turns out.

DSGamer wrote:

This administration is clown shoes. Criminy.

I'm sure you meant all of them in living memory of anyone here.

It's possible that Argonaut will end up owning a company that lists $850mm in assets for less than $100mm.

No BK judge would accept the petition of a former corporate officer regarding the disposition of company assets if that same officer was under the cloud of fraud charges. I think this must be the reason that both the company’s headquarters and senior officers homes (including the CFO) have been raided by the FBI.

And from a bankruptcy attorney (DIP is Debtor in Possession, in this case, Argonaut):

The terms contained in the DIP agreement usually are the vehicle by which assets are stolen via seemingly innocuous terms ... No one can do Due Diligence in 4 weeks. It leaves the DIP lender in a great spot.

The executives refused to testify today, pleading the 5th.

Excuse my not-an-American ignorance for a moment:
At a quick glance pleading the 5th looks to be "We're not required to hold witness against ourselves by giving comment". However that in turn seems roughly equivalent to "We have nothing to say in our defense so anything we say will likely worsen our case and punishment." Am I way off base here?

You don't have to be guilty to plead the fifth. But it sure does make you look guilty.

krev82 wrote:

The executives refused to testify today, pleading the 5th.

Excuse my not-an-American ignorance for a moment:
At a quick glance pleading the 5th looks to be "We're not required to hold witness against ourselves by giving comment". However that in turn seems roughly equivalent to "We have nothing to say in our defense so anything we say will likely worsen our case and punishment." Am I way off base here?

That's not the original spirit of the statement, but that is unfortunately more and more how it has come to be taken in our society. The original idea was more to protect people that were innocent from making statements that could be construed as suspicious while under pressure during an interrogation.

I don't want to derail the thread, so for a more modern take on why it's still important you can watch this excellent two-part video. A former defense attorney and a police officer teach a class to future lawyers about why it's important that they and their clients never, ever, talk to the police.

Here is the best explanation of the Solyndra scandal yet.

1. It is actually good news. This is because solar technology is even cheaper than Solyndra could produce. This is booming the solar sector.
2. Government should only be involved in research and installation of solar tech. Not production. Let the private sector make and lose money here.

http://www.danablankenhorn.com/2011/...

The Republican-controlled Congress passed the funding law that Solyndra used in 2005, and the Bush Administration approved their application. Another created scandal. Both sides contributed to this.

William K Black of UMKC compares Solyndra with Lehman. Solyndra and especially the Obama White House are accused of possible fraud (liar's loans).

http://www.ritholtz.com/blog/2011/09...

So the “real question” is not the one Nocera framed. The real question is why a lender (the U.S. government in this case) would gratuitously fail to underwrite a loan properly. The fact that the type of loan was inherently extremely risky makes it imperative that the lender engage is superb underwriting. The Obama administration, and Nocera, have failed to learn the most obvious and costly lesson of the ongoing U.S. crisis – liar’s loans cause catastrophic losses and failures and are “an open invitation to fraudsters” (quoting MIRA’s 2006 report to the members of the Mortgage Bankers Association).

Nocera does not explain what is embarrassing about the Obama emails. The government’s professional loan underwriters were worried about lending to Solyndra. They were warning the administration that they had not been able to complete the professional underwriting essential to making loans prudently. The Obama administration officials did not respond by backing their professional regulators. The administration did not stress that it was essential that the loan be approved only after it passed a rigorous underwriting process. The administration responded to the efforts of its professionals to protect the government from loss by abusing the regulators and pressuring them to approve the loans without completing the underwriting. The administration thought it was fine to make a liar’s loan to Solyndra.

Bill Black is the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He spent years working on regulatory policy and fraud prevention as Executive Director of the Institute for Fraud Prevention, Litigation Director of the Federal Home Loan Bank Board and Deputy Director of the National Commission on Financial Institution Reform, Recovery and Enforcement, among other positions.

I'm cool with Solyndra being investigated to the hilt if we also start perp-walking folks on Wall Street.

Robear wrote:

The Republican-controlled Congress passed the funding law that Solyndra used in 2005, and the Bush Administration approved their application. Another created scandal. Both sides contributed to this.

Check the post 6 above yours and watch John Stewart refute this.

Nomad wrote:
Robear wrote:

The Republican-controlled Congress passed the funding law that Solyndra used in 2005, and the Bush Administration approved their application. Another created scandal. Both sides contributed to this.

Check the post 6 above yours and watch John Stewart refute this. :)

He didn't refute this. He went into great detail on how close Solyndra was with many members of the Obama administration, however this doesn't magically annul their relationship with the previous administration.

In another note, I heard a blurb on the radio yesterday that the Obama administration/energy department has decided to toss another $100 million into two new solar companies that have ties to Harry Reid and Nancy Pelosi.

Dude, compared to the hundreds of billions that Halliburton and its ilk has sucked out of the economy through no-bid contracts, that's chump change.

I mean, yes, we should look into it and fix it if necessary, but let's keep some perspective. There are crimes literally a hundred times worse happening on an ongoing basis.

Malor wrote:

Dude, compared to the hundreds of billions that Halliburton and its ilk has sucked out of the economy through no-bid contracts, that's chump change.

I know this, but it's not part of the topic. I was just pointing out that it seems no lessons are ever learned.

Malor wrote:

Dude, compared to the hundreds of billions that Halliburton and its ilk has sucked out of the economy through no-bid contracts, that's chump change.

I mean, yes, we should look into it and fix it if necessary, but let's keep some perspective. There are crimes literally a hundred times worse happening on an ongoing basis.

I see this argument way too often. Malor, are you familiar with the logical fallacy "Relative Privation" or "Red Herring"? It goes like this:

Person #1: A is bad.
Person #2: But B is worse. (Deflecting attention and argument from A to B)

There is very rarely a subject in which one can't find something worse to compare it to in the name of "perspective", but if true perspective was the issue, wouldn't all the better subjects need to be referenced too?

Nomad wrote:
Malor wrote:

Dude, compared to the hundreds of billions that Halliburton and its ilk has sucked out of the economy through no-bid contracts, that's chump change.

I mean, yes, we should look into it and fix it if necessary, but let's keep some perspective. There are crimes literally a hundred times worse happening on an ongoing basis.

I see this argument way too often. Malor, are you familiar with the logical fallacy "Relative Privation" or "Red Herring"? It goes like this:

Person #1: A is bad.
Person #2: But B is worse. (Deflecting attention and argument from A to B)

There is very rarely a subject in which one can't find something worse to compare it to in the name of "perspective", but if true perspective was the issue, wouldn't all the better subjects need to be referenced too?

He's not arguing we ignore A, only that we give B a look as well. Perhaps a more thorough look since B is larger than A.

Dr.Ghastly wrote:
Nomad wrote:
Malor wrote:

Dude, compared to the hundreds of billions that Halliburton and its ilk has sucked out of the economy through no-bid contracts, that's chump change.

I mean, yes, we should look into it and fix it if necessary, but let's keep some perspective. There are crimes literally a hundred times worse happening on an ongoing basis.

I see this argument way too often. Malor, are you familiar with the logical fallacy "Relative Privation" or "Red Herring"? It goes like this:

Person #1: A is bad.
Person #2: But B is worse. (Deflecting attention and argument from A to B)

There is very rarely a subject in which one can't find something worse to compare it to in the name of "perspective", but if true perspective was the issue, wouldn't all the better subjects need to be referenced too?

He's not arguing we ignore A, only that we give B a look as well. Perhaps a more thorough look since B is larger than A.

Isn't that what I said? He is bringing up B to take attention off of A.

Nomad wrote:

Isn't that what I said? He is bringing up B to take attention off of A.

No. He's saying A is $500 million to a company that's not in existence anymore while B is several trillion dollars and counting towards companies that would have been declared insolvent had not the accounting rules been conveniently changed.

To put it another way, we'll concentrate on the little sh*t once the real problems are fixed. If you honestly are concerned about $500 million where were you nine years ago when $10 billion in cash we flew into Iraq on shrink-wrapped pallets simply disappeared?

OG_slinger wrote:
Nomad wrote:

Isn't that what I said? He is bringing up B to take attention off of A.

No. He's saying A is $500 million to a company that's not in existence anymore while B is several trillion dollars and counting towards companies that would have been declared insolvent had not the accounting rules been conveniently changed.

To put it another way, we'll concentrate on the little sh*t once the real problems are fixed. If you honestly are concerned about $500 million where were you nine years ago when $10 billion in cash we flew into Iraq on shrink-wrapped pallets simply disappeared?

Call it what you will, it's still deflecting from the issue. It's kind of like Godwinning. (ie. Halliburton was bad, but have you heard about that Hitler guy and his killing of 6 million Jews?)

For me, it's more a matter of "If you care so much about A, then where the f*ck were you when B was going on!?"

Nomad wrote:

Call it what you will, it's still deflecting from the issue. It's kind of like Godwinning. (ie. Halliburton was bad, but have you heard about that Hitler guy and his killing of 6 million Jews?)

No. It's called having perspective.

If you are getting your panties in a bunch over $500 million in government backed loans now then I don't know how you're still alive because you should have stroked out over TARP, the bailouts, and everything else that was done during the financial collapse as well as all the money we pissed away in Iraq and Afghanistan.

What Nomad is saying is "Do we agree that what happened with the government funding of Solyndra is bad?" That's what we're talking about here. Not TARP, not Hitler-- plenty of things in the world are bad, but they're not germane here. TARP doesn't excuse Solyndra. I think TARP was awful-- I think we got suckered, but that doesn't mean we should ignore the "chump change" of $500 million, or that we're not allowed to talk about it until we acknowledge greater evils in the world.

"Is the government funding of Solyndra bad?" I sure think so, because I don't think government should be in the venture capital business, but I don't think everyone believes that. That's the discussion we are trying to have here. Do you guys think this was an appropriate use of funds?

bandit0013 wrote:

In another note, I heard a blurb on the radio yesterday that the Obama administration/energy department has decided to toss another $100 million into two new solar companies that have ties to Harry Reid and Nancy Pelosi.

That is some inflammatory rhetoric. It seems like you want these solar companies to fail.

Poppinfresh wrote:

What Nomad is saying is "Do we agree that what happened with the government funding of Solyndra is bad?" That's what we're talking about here. Not TARP, not Hitler-- plenty of things in the world are bad, but they're not germane here. TARP doesn't excuse Solyndra. I think TARP was awful-- I think we got suckered, but that doesn't mean we should ignore the "chump change" of $500 million, or that we're not allowed to talk about it until we acknowledge greater evils in the world.

"Is the government funding of Solyndra bad?" I sure think so, because I don't think government should be in the venture capital business, but I don't think everyone believes that. That's the discussion we are trying to have here. Do you guys think this was an appropriate use of funds?

The government funds oil companies through billions of subsidies so why shouldn't it fund green power companies? In fact, developing clean energy technologies should be one of the top priorities for our country. It's simply in our strategic national and economic interest.

The market doesn't care if gas goes to $8 a gallon, but our government does because it creates a massive drag on our economy and also causes a load of political problems. The market doesn't care about climate change and the possibility that carbon will be taxed or regulated. It simply makes sense for our government to invest in technologies that would help us to minimize or avoid those kinds of disruption.

It's our government's role to plan for the future and make the kind of investments that the market isn't willing or able to do. In fact our government would be violating its fiduciary responsibility to citizens by not making those types of investments.

This is news because of politics. Conservatives have a trifecta red meat issue: Obama's administration using government money to fund a green energy company.

And yet those same folks don't blink twice when the GOA says that the Joint Strike fighter program is going to come out $38 billion over budget or ever send a letter to Congressperson telling them to get rid of subsidies for the oil industry if they want their vote.

Nomad wrote:
OG_slinger wrote:
Nomad wrote:

Isn't that what I said? He is bringing up B to take attention off of A.

No. He's saying A is $500 million to a company that's not in existence anymore while B is several trillion dollars and counting towards companies that would have been declared insolvent had not the accounting rules been conveniently changed.

To put it another way, we'll concentrate on the little sh*t once the real problems are fixed. If you honestly are concerned about $500 million where were you nine years ago when $10 billion in cash we flew into Iraq on shrink-wrapped pallets simply disappeared?

Call it what you will, it's still deflecting from the issue. It's kind of like Godwinning. (ie. Halliburton was bad, but have you heard about that Hitler guy and his killing of 6 million Jews?)

Actually Nomad, the issue is "the fundamental problem with stimulus spending." Check the original post. This is not a thread about whether Solyndra was good or bad. It's a thread about whether Solyndra is the poster child for, to quote the title of the thread, "How Stimulus Works."