By the Curmudgeon with
Victor Sperandeo
Overview:
Last week, U.S. Treasury Secretary Steven Mnuchin, a former
Goldman Sachs partner (see Victor’s comments below), refused to identify what
companies received $511 billion in taxpayer-backed coronavirus loans.
“The Trump administration believes names of borrowers from
the Paycheck Protection Program (PPP) along with the amounts they received are proprietary
and confidential,” Mnuchin said during a Senate committee hearing on
June 10th.
Yet the applications for PPP loans, which are forgivable if
borrowers meet certain criteria, state that such data will “automatically” be
released. That was corroborated in April when the Small Business Administration
(SBA), which oversees the lending program, told Bloomberg News that such
loan-specific information would be made public “in the near future.”
Similarly, a SBA spokesman told the Washington Post in
an April 16th email that the agency “intend[s] to post individual
loan data in accordance with the information presently on the SBA.gov website
after the loan process has been completed,” and it made a similar commitment in
response to an April 17th open records request by the Post.
So why the reversal in U.S. government policy which exhibited
a total lack of transparency?
U.S. Treasury Department Re-Reversal:
Not to worry or debate the “proprietary” nature of the loans,
because Mnuchin has reversed course again!
This Friday, June 19th, the U.S. Treasury Department
announced that they would release a data set showing which businesses received
many PPP loans, reversing the previous reversal that all of the business names
would remain hidden because the Trump administration considered them
“proprietary.”
The disclosures will include the names of recipients who
received PPP loans of more than $150,000 and it will also reveal a dollar range
for each loan, such as whether it was between $1 million and $2 million.
Precise dollar amounts will not be disclosed, the Trump administration said.
Borrowers who obtained loans of less than $150,000 will not have their
identities disclosed. The administration said nearly 75 percent of all loans
were for $150,000 or more, so most borrowers would be revealed.
“We are striking the appropriate balance of providing public
transparency, while protecting the payroll and personal income information of
small businesses, sole proprietors, and independent contractors,” Mnuchin said
in a statement.
The announcement came after several weeks of tense
negotiations with congressional leadership, in which members of both parties
pressed for some form of disclosure. The plan announced Friday amounts to an
attempted compromise in which most loan recipients will be made public while
specific details would be obscured.
“The Treasury Department finally gave in to public pressure
from Democrats because their position of hiding which businesses have received
PPP loans was untenable,” Senate Minority Leader Charles E. Schumer (D-N.Y.)
said in a statement.
Discussion and Analysis:
The program was designed to extend loans of up to $10 million
to smaller firms, those that have 500 or fewer employees. But it was built in
such a way that many larger firms found ways to obtain the loans. Some of those
larger firms gave the money back to the SBA after their identity was revealed
(we name names below).
The Curmudgeon believes that in trying to quickly pump loan
dollars into the economy, the program’s architects did away with many
of the usual safeguards designed to prevent banks and the federal government
from fraud. Lenders were empowered to take borrowers at their word regarding
need and eligibility, requiring very basic checks on
the part of regulators.
There have been widely reported cases in which large,
cash-rich operations managed to get small business loans.
Some national restaurant and hotel chains took advantage of a
legal loophole allowing franchisees and other business affiliates to qualify.
The Auto Nation car dealership, for example, received nearly $80 million
in PPP loans through their nationwide dealership, coordinated by national
executives.
Other wealthy organizations receiving the small business
loans included Shake Shack, the Ashford Hospitality Trust, the Los Angeles
Lakers (are they a small business?), an exotic cruise operator, and the Aspen
Institute. At least 300 publicly traded companies received small business
loans, prompting the SBA to retroactively change its rules with respect to
those organizations.
A number of firms
returned the funds after it was disclosed that they received huge PPP
loans. The Ruth's Chris steakhouse
chain said they would return two loans totaling $20 million, The Wall
Street Journal and Forbes reported on April 23rd.
The SBA has previously said it would release “individual loan
data” for PPP recipients in accordance with the information currently on its
Freedom of Information Act page, which includes specific loan data for various
SBA subsidized loan programs going back to 1991. A lawsuit filed by 11 news
organizations, including Bloomberg, Dow Jones & Co, NY Times, and
Washington Post, seeks business names and loan amounts for all PPP recipients,
including those receiving smaller amounts of funding.
….……………………………………………………………………………...
Victor’s Comments – Globalism Rules:
We all know Goldman (GS) is a major proponent of Globalism.
Goldman’s Globalist [1.] roster is quite long. It includes both Democrats (like Robert
Rubin, U.S. Treasury Secretary under the Clinton administration, and
Republicans (like Henry Paulson, U.S. Treasury Secretary under the George W.
Bush administration).
Note 1. According to the Cambridge English dictionary, a Globalist
is someone who believes that economic and foreign policy should be planned in
an international way, rather than according to what is best for one particular
country. In general, globalists consider
themselves to be “citizens of the world,” rather than of any one country.
……………………………………………………………………………..
The Council
of Foreign Relations (CFR) is by definition the most Pro-Globalist
club/membership in the world. Robert Rubin (see above), whom I knew, was Chairman
Emeritus of the CFR.
Founded in 1921, CFR’s mission is to be “an independent,
nonpartisan membership organization, think tank, and publisher dedicated to
being a resource for its members, government officials, business executives,
journalists, educators and students, civic and religious leaders, and other
interested citizens in order to help them better understand the world and the
foreign policy choices facing the United States and other countries.”
In 1973, then CFR Chair David Rockefeller founded the Trilateral Commission,
which has been the subject of many global elite conspiracy theories.
The CFR currently has approximately 4,425 members who
are among the most powerful people in the world. Those super privileged elites have been
criticized by conservatives due to their alleged support for globalism and a
one world government. CFR has also been
criticized by conspiracy theorists and others who feel they are a part of the
“New World Order.”
For example, the CFR wants to control and use climate change
to tax the public. But in reality, those
taxes end up in the coffers of multi-national corporations which CFR members
own a large shares of stock.
I believe that Munchin sees small
companies as competition for the major corporations (many of which CFR elites
hold stock in). For Mnuchin to handout
U.S. government money via the PPP makes him seem like a king. The reason he did
not want the SBA to disclose the names of the PPP recipients who got the money,
was to keep secret certain large corporations that did receive the loans. Meanwhile, many small businesses were
deprived of those loans or are still waiting [2.] for their loan application to
be approved.
Note 2. The Curmudgeon’s company (which shall remain
anonymous) filed a SBA loan application on April 9th. Only yesterday (June 20th), did I
receive an email inviting me to create an account for review by a SBA loan officer.
After provided proof of the company’s ongoing business, I am still
waiting for the loan officer’s decision.
………………………………………………………………………………...
Victor’s Conclusion:
Transparency implies full disclosure and honesty.
Yet dishonesty seems to be the essence of secrecy in the U.S.
government’s allocation of money.
End Quote:
From “None Dare Call It Conspiracy” ... by Gary Allen
and Larry Abraham
“If one understands that socialism is NOT a share-the- wealth
program, but is in reality a method to -consolidate and control -the wealth,
then the seeming paradox of the super-rich men promoting Socialism becomes no
paradox at all.”
………………………………………………………………………………….
Be healthy, safe, calm, wishing you success and good luck.
Till next time…..
The Curmudgeon
ajwdct@gmail.com
Follow
the Curmudgeon on Twitter @ajwdct247
Curmudgeon is a retired investment professional. He has
been involved in financial markets since 1968 (yes, he cut his teeth on the
1968-1974 bear market), became an SEC Registered Investment Advisor in 1995,
and received the Chartered Financial Analyst designation from AIMR (now CFA
Institute) in 1996. He managed hedged equity and alternative
(non-correlated) investment accounts for clients from 1992-2005.
Victor
Sperandeo is a historian, economist and financial innovator who
has re-invented himself and the companies he's owned
(since 1971) to profit in the ever changing and arcane world of markets,
economies and government policies.
Victor started his Wall Street career in 1966 and began trading for a
living in 1968. As President and CEO of Alpha Financial Technologies LLC,
Sperandeo oversees the firm's research and development platform, which is used
to create innovative solutions for different futures markets, risk parameters
and other factors.
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