Let me see if I follow the chronology correctly here.
1. Bank of America pulls credit lines from Republic Window & Doors, presumably there are profitability reasons attached. Republic Window & Doors is in what might broadly be called the "real estate" market, even the "new construction market" which isn't exactly a massive cash cow at the moment.
2. Republic Window & Doors, seeking to avoid bankruptcy, lays off most of its employees. In doing so they run afoul of state rules requiring 60 days notice, etc.
3. Republic employees stage a sit in.
4. Illinois Governor Rod Blagojevich suggests to Illinois agencies that doing business with Bank of America is a bad idea, on the rationale that since B of A got bailout money, whats the harm in lending to the likes of Republic Window & Door?
So, the price of accepting bailout funds has become the wholesale replacement of traditional credit criteria with political influence criteria when making lending decisions.
I am reminded of Japan. Anyone else?
Given the state of Illinois finances, further, I wonder if Rod isn't doing B of A a favor.
Illinois Governor Suspends Business With Bank Of America [The Huffington Post]
Posted by guest , Dec 08, 2008 1:08PM
Too chronological, didn't read
Posted by NAS Keflavik boi , Dec 08, 2008 1:11PM
"So, the price of accepting bailout funds has become the wholesale replacement of traditional credit criteria with political influence criteria when making lending decisions."
Uh, yeah, that's kinda what socialism is all about... welcome to the collective, comrade.
Posted by guest , Dec 08, 2008 1:15PM
Republic W&D looks like a poorly managed company. Lets keep em alive as long as we can.
Posted by guest , Dec 08, 2008 1:16PM
Screw this story. Where's my commentary on Dreier impersonating a teacher's lawyer?
Posted by guest , Dec 08, 2008 1:21PM
Only a matter of time here before getting any financing from the big banks requires a fat kiss on Dodd's ring. If these charlatans felt entitled to make demands on who the banks were loaning to before (ex: Community Reinvestment Act), just imagine how eager they're going to be now that the taxpayers have a prefered equity interest.
Posted by guest , Dec 08, 2008 1:22PM
I'm surprised. I thought it would take until at least next spring before the bailed out banks were pressured to make politically expedient loans.
Posted by guest , Dec 08, 2008 1:28PM
I'm just hoping someone speaking in soft tones explains to these furrow browed "protesters" that shitty loans is what got BOA in their current mess to begin with.
But yeah, it certainly makes sense to throw money at an unprofitable business right now. I mean just think about what we could do with all those windows and doors...
Posted by guest , Dec 08, 2008 1:29PM
Actually, Illinois will be the BEST state to lend money to.
Does anyone seriously think the chosen One is going to let his home state go broke? C'mon EP-you're better than that.
#2 is correct: long live the USSA.
Posted by guest , Dec 08, 2008 1:33PM
@3: NEW TRADE IDEA
-----
Step 1: Use generalities and political posturing to ensure W&D maintains credit lines with BAC long enough to burn the loan funds.
Step 2: Short BAC.
Regards,
GS Online Bank
Global Investment Research Division
Posted by VOL IS KING , Dec 08, 2008 1:41PM
Better Japan 1990 than Russia 1998. Keep bailing until the chinese are using dollars for kindling!
P.S. EP how long until Switzerland goes belly up, march?
Posted by guest , Dec 08, 2008 1:56PM
Bank of Most of America Except for the States Whose Governors Hate Us.
Posted by guest , Dec 08, 2008 2:01PM
Gov. Blago is arguably the most economically ignorant politician around today. This is the same governor who, a few years ago, wanted to impose a 2% tax on REVENUES for Illinois business. What an idiot.
Posted by guest , Dec 08, 2008 2:14PM
"2. Republic Window & Doors, seeking to avoid bankruptcy, lays off most of its employees. In doing so they run afoul of state rules requiring 60 days notice, etc."
http://www.doleta.gov/programs/factsht/warn.htm
Actually this is a FEDERAL law, not "state rules" and since the FEDERAL government loaned B of A the money for the bailout, it makes sense that they ask B of A to help the company uphold their obligation under FEDERAL law. No one put a gun to B of A's head and asked them to accept this money, now they have to deal with the consequences.
- Securities Litigator
Posted by guest , Dec 08, 2008 2:18PM
Hey genius securities litigator, actually someone DID put a gun to B of A's head, it was Paulson. Do a little light reading and you'll understand. Whether they needed it or not, the biggest banks weren't given any real option of whether to accept federal money. Oh and even if they applied six ways from Sunday to get this money, that still doesn't make them responsible for Republic's obligations. B of A is a CREDITOR for fuck's sake.
Posted by guest , Dec 08, 2008 2:19PM
And yes, I understand that the Governer is asking them to make the loan, but the point remains that by accepting Federal funds we can ask, nay demand, that they help others uphold their Federal obligations.
Posted by guest , Dec 08, 2008 2:19PM
And yes, I understand that the Governer is asking them to make the loan, but the point remains that by accepting Federal funds we can ask, nay demand, that they help others uphold their Federal obligations.
- Securities Litigator
Posted by guest , Dec 08, 2008 2:31PM
BofA should of not accepted the money, then they could of went under like lehmans. I hate BofA worst bank in america.
Now there complaining about being political, get with the program, comrade.
Posted by guest , Dec 08, 2008 2:36PM
Can't we break off a little of $700 Billion bailout fund and give it to Republic? [Yeah, I know the $150 vig to get it passed is sacred.]
You know, the union can always tell Republic that "card check" is going to pass on January 28ish (once the hangovers fade) and they are headed to Iowa.
- Blago, Illinois' next convicted governor
Posted by guest , Dec 08, 2008 2:36PM
@16. Since the point seems to be eluding you, Paulson and company invited BofA among others to a room and made them an offer (of bailout money) that they couldn't refuse.
Posted by guest , Dec 08, 2008 2:39PM
@16 Demand that "they help others"? That sounds like a very slippery slope. Should every debt holder now be beholden to and, as you suggest, obligated to perform for, any company they have lent to? Since I lent my friend $50 over the weekend and I know responsible for his mortgage?
You should have gone to a better law school.
Posted by guest , Dec 08, 2008 2:40PM
@12, isn't that kind of like what a sales tax is?
Posted by guest , Dec 08, 2008 2:50PM
It isn't a demand that they "help others" this is an obligation imposed by law under the WARN act.
http://www.doleta.gov/programs/factsht/warn.htm
Posted by guest , Dec 08, 2008 2:55PM
Securities Lawyer,
Really? BofA is the creditor here, is owed money it's probably not going to get back, and you're trying to claim that they have a federal obligation to give away money to an insolvent business? That's the definition of putting good money after bad, and it certainly goes against the stated goal of stabilizing the credit markets. Now instead of overly-loose lending standards we have overly-politicized amateurs ignoring the root cause - banks (or the Fed) shouldn't make loans they can't reasonably expect to get back. BofA is not the villain here, unfortunately.
Posted by guest , Dec 08, 2008 2:56PM
C'mon EP. Update the story, these aren't "state ruleS" this is Federal Law. That is a huge difference.
Posted by guest , Dec 08, 2008 3:08PM
WARN also provides for less than 60 days notice when the layoffs resulted from closure of a faltering company, unforeseeable business circumstances, or a natural disaster.
Hey, Securities Litigator, fuckface, that's the law you're referencing right? Pretty sure Republic counts as a FALTERING COMPANY. Now do something for me:
Take the diploma from Shithole University Law School in its cheap Wal-Mart frame off your office wall and shove it up your ass, frame and all. Thanks.
Posted by Anal_yst , Dec 08, 2008 3:16PM
Wow, wonder what securities cases Mr. Litigator has handled, jesus
Posted by guest , Dec 08, 2008 3:20PM
Wow I didn't think it was possible but I now have less respect for lawyers than I did before...craziness
Posted by guest , Dec 08, 2008 3:21PM
Has anyone checked out the comments the nut roots posted on HuffPo?! What scares me, is that these are the people that make up a huge portion of the voting bloc.
Posted by guest , Dec 08, 2008 3:24PM
Guy is probably a security guard at a law firm.
Posted by guest , Dec 08, 2008 3:25PM
@28
Those people are talking about a new Bolshevik Revolution like it's a GOOD thing.
No wonder gun sales are up
Posted by guest , Dec 08, 2008 3:26PM
@22
As I read is "An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable ..."
Read carefully, "An employer ... is liable". Doesn't say anywhere in there a creditor is liable, a shareholder is liable, a ... you get the point.
Hell this law stuff is really easy.
Posted by guest , Dec 08, 2008 3:27PM
@28
Those people are talking about a new Bolshevik Revolution like it's a GOOD thing.
No wonder gun sales are up
Posted by guest , Dec 08, 2008 3:49PM
Glad to see the securities lawyer ran back to the hole he came from. Must have accidentally wandered away from the yahoo message boards.
Posted by guest , Dec 08, 2008 4:09PM
I love the conspiracy theorists discussing how this company was selling off machines "under the cover of night" in the weeks leading up to the bankruptcy. Clearly the company was up to some rotten, no-good scheme to screw over its employees. I mean what are we supposed to believe, that machines were being sold off in some sort of last-ditch effort to avoid bankruptcy?
Posted by guest , Dec 08, 2008 4:14PM
Bankers, financial analysts, stock jockies, hedge fund managers, private equity employees, et al... .
Get your shoe shine game on. You are going to need it.
Posted by guest , Dec 08, 2008 4:21PM
Bolshevik Revolution is 'hope and change' no? Why else would all the elites have voted for it?
Posted by guest , Dec 08, 2008 4:28PM
There's got to be something either illegal or borderline illegal with the governer "ordering" his state not to business with BOA. That's just insane.
While he's at it, he may as well order them not to do business with all of the other banks that clearly weren't willing to extend credit either.
Posted by guest , Dec 08, 2008 4:37PM
@37 Blag the Impaler can do whatever he wants. That's the "Chicago way".
Posted by guest , Dec 08, 2008 5:04PM
Rod will say just about anything to get some positive pub. On a side note, Blago might become the first Illinois governor to get indicted while in office. Quite a feat, even for Illinois.
Posted by guest , Dec 08, 2008 5:16PM
34: something definitely stinks in denmark:
http://www.chicagotribune.com/business/chi-window-company-protest-08-dec08,0,622291.story
Posted by guest , Dec 08, 2008 5:43PM
Governor HairHelmet & The Rev. Jesse Jackson at the same location simultaneously? There's not enough oxygen for them both to breathe.The Rev is a pimp extortionist and Blago the Destroyer couldn't find his ass w/ both hands in a high wind. Someone send them on a fact-finding mission to Antarctica.
Posted by guest , Dec 08, 2008 5:55PM
41, They are out Dear Beloved Leader's compatriots and homeboys and from his hometown. How DARE you say such things that might tangentially stain our Dear Belover Leader.
I am sure that our Dear Beloved Leader's community activist 'Youth' have taken note of this blasphemous act and will act appropriately.
Posted by guest , Dec 08, 2008 7:10PM
Blago and Madigan will use ever dime of ours they can spend to start thier race for govenor early. They will fight to get nothing from a company that closed.
Maybe the union can buck up and take care of their "brother and sisters", all those years of paying union dues sure paid off.
Posted by guest , Dec 08, 2008 7:10PM
Blago and Madigan will use ever dime of ours they can spend to start thier race for govenor early. They will fight to get nothing from a company that closed.
Maybe the union can buck up and take care of their "brother and sisters", all those years of paying union dues sure paid off.
Posted by guest , Dec 08, 2008 7:10PM
Blago and Madigan will use ever dime of ours they can spend to start thier race for govenor early. They will fight to get nothing from a company that closed.
Maybe the union can buck up and take care of their "brothers and sisters", all those years of paying union dues sure paid off.
Posted by guest , Dec 09, 2008 9:39AM
dude just got arrested by the FBI
Posted by guest , Dec 09, 2008 9:54AM
I guess Blago learned today that it is a bad idea to cross B of A.
Posted by guest , Dec 09, 2008 6:11PM
ugly...