Taxpayers Still Owed $132.9 Billion from Bailout

According to a government watchdog, U.S. taxpayers are still owed $132.9 billion from companies haven't repaid from the financial bailout. Some of which will never be recovered...

The acting special inspector general for the $700 billion bailout, Christy Romero, as that the bailout launched at the height of the financial crisis in 2008 will continue to exist for years.

From the AP,

Some bailout programs, such as the effort to help homeowners avoid foreclosure by reducing mortgage payments, will last as late as 2017, costing the government an additional $51 billion or so.

The gyrating stock market has slowed the Treasury Department's efforts to sell off its stakes in 458 bailed-out companies, the report says. They include insurer American International Group Inc. (AIG), General Motors Co. (GM) and Ally Financial Inc.

If the Treasury plans to sell its stock in the three companies at or above the price where taxpayers would break even on their investment, it could take an incredibly long time for the market to even rebound to that level. Shares for AIG closed on Wednesday at $25.31, which is more than $3 less than the break even point for taxpayers, while GM ended at $24.92, while needing to hit the $53.98-a-share break even point. Ally isn't publicly traded.

The government has unwound its investments in the companies that received the most aid: Bank of America Corp., Citigroup Inc., Chrysler Group LLC and Chrysler Financial.

$413.4 billion was paid out from the Congress authorized $700 billion for the bailout, also known as Troubled Asset Relief Program, or TARP. So far the government has recovered only $318 billion.

&ldqu! o;TARP i s not over,” Romero said in a statement. She said that her office will continue to protect taxpayers for the duration of the program.

Liz Phair on Why Lana Del Rey Scares Rock’s Boys Club

Rolling Stone asked me to speak about Lana Del Rey. I wanted to know how big my participation in the piece would be–was it substantial or just a quote? Just a quote, they said, to which I replied that I wasn’t super interested. Which was a lie. I have a lot to say about her, but no sound bites. You see, Lana Del Rey is exactly what I was hoping to inspire when I took on the male rock establishment almost twenty years ago with my debut record, “Exile In Guyville.”
Let me break it down for you: she’s writing herself into existence. She’s giving herself a part to play because, God knows, no one else will and she wants to matter in this life. As far as I can tell, it’s working. I went straight to iTunes and bought her new release “Born To Die” in toto (how often do I do that??) because it was more than a collection of songs or a performance, it was a phenomenon. Maybe all the more so because she’s not overwhelmingly talented. The minute I hear the whisperings of “how dare she,” I’m interested. I don’t have to like it, it doesn’t have to be worthy.
Lana Del Rey seems to be bothering everybody because she allegedly “remade”! herself from a folk singing, girl-next-door type into an electro-urban kitty cat on the prowl (of course I like her), and they feel she is inauthentic. I would argue that the uncomfortable feelings she elicits are simply the by-product of watching a woman wanting and taking like a man.

Getty Images

Singer/songwriter Liz Phair performs her album ”Exile in Guyville” at the 9:30 Club on August 28, 2008 in Washington, DC.

 what is called a sex-positive feminist. Or maybe a radical feminist, or, wait–this one’s cool: an anarcha-feminist! Which is to say that I don’t give a f— about your labels, I just want to hear the true voices of women self-expressing–smart ones, stupid ones, ugly ones, beautiful ones, good ones, bad ones, fat ones, thin ones, all of it–until the profound silence that has resounded throughout history is filled with a healthy chorus coming from our side of the aisle.
Can you picture our society, “one nation under The Goddess, indivisible… etc.?” If the president was always a woman and all the senators, judges and key business leaders were all female? Picture being forced to talk endlessly about your feelings and listen and care when what you needed was just to get something done. Doesn’t that sound sh–ty? Tiresome? Oppressive?
Yeah, I know the feeling .
Lana Del Rey really needs to duke it out with M.I.A. and Katy Perry, Lady Gaga and Kim Gordon, The Tin! g Tings and Tegan and Sara. That’s where she’s relevant. It’s our sh–. You wouldn’t understand.
So how does Liz Phair feel about Lana Del Rey? Well, as a recording artist, I’ve been hated, I’ve been ridiculed, and conversely, hailed as the second coming. All that matters in the end is that I’ve been heard.
Liz Phair’s 1993 album “Exile In Guyville” was named one of the top 100 albums of all time by VH1, and one of the 500 greatest albums ever by Rolling Stone.
What do you think of Phair’s take on Lana Del Rey? Leave your thoughts in the comments.

Best Wall St. Stocks Today: GM

The wooden but plucky CEO of GM (GM), Rick Wagoner, told the press that if his company is allowed to go into Chapter 11, it will end up being a simple liquidation. GM will be torn into pieces and sold off as scrap. He made one good point to support his point of view. If a bankruptcy of the No. 1 US car company drags on for several months, potential auto buyers will purchase vehicles from competitors that they view as being �safe�.” No one wants to buy a car that won�t be serviced. Wagoner has made this point before, but it is more compelling now that the deadline for the government to approve or disapprove GM�s restructuring plan is only two weeks away.
GM has effectively taken a page out of the AIG playbook for gaming the Administration and Congress. Henry Paulson and his associates were led to believe, perhaps rightly, that if AIG failed it would cost other financial companies so significantly that the government would have to bailout almost every large financial firm in the country. GM�s argument is even simpler. A liquidation of the car firm would probably cost tens of thousands of jobs at the company, and many times that at suppliers. That argument is also old, but with the chance of liquidation in the next few months becoming more likely, it refreshes the strength of the logic.
GM has been in the middle of quietly challenging the government�s plan to close it down for three months now. The Administration has now sent its car experts to Detroit, and they have said that a bankruptcy of either GM or Chrysler is undesirable. They did not elaborate much on this analysis, but, from the standpoint of the car companies, they do not need to. It is enough that the blue chip analysts sent by the President to evaluate the car companies have a belief system that matches the one in The Motor City.
The financial and car industries have effectively ganged up on the government. They would seem to be weak because of their remarkable failures and reliance on out! side hel p to keep them alive. The opposite is true. By being terribly crippled, they are sucking all of the money out of the US Treasury because the Administration knows that if these parts of American business fail, replacing the jobs and capital will be insurmountable tasks. The recession would get much, much worse. Staying ahead of the job losses would become impossible.
AIG has led the way for GM. It has taken government money and made it clear that a great deal of the cash has been wasted. Even with the evidence of that completely uncovered, the Administration has so little power that it cannot let AIG go under, as a punishment for taking taxpayer money and using it for multimillion dollar bonuses.
No one at GM is going to get a raise because the government will give it another $20 billion or $30 billion. The car industry embezzlement is more artful. With more than one million jobs at risk and unemployment rising at a pace rarely seen in American history, letting GM fail would completely compromise any chance of keeping the unemployment rate below 10%. If this figure rises above that number, it will make every American shudder.

Does Frontier Communications Pass Buffett's Test

We'd all like to invest like the legendary Warren Buffett, turning thousands into millions or more. Buffett analyzes companies by calculating return on invested capital, or ROIC, in order to help determine whether a company has an economic moat -- the ability to earn returns on its money above that money's cost.
In this series, we examine several companies in a single industry to determine their ROIC. Let's take a look at Frontier Communications (NYSE: FTR  ) and three of its industry peers, to see how efficiently they use cash.
Of course, it's not the only metric in value investing, but ROIC may be the most important one. By determining a company's ROIC, you can see how well it's using the cash you entrust to it and whether it's creating value for you. Simply put, it divides a company's operating profit by how much investment it took to get that profit. The formula is:

ROIC = net operating profit after taxes / Invested capital

(You can get further details on the nuances of the formula.)
This one-size-fits-all calculation cuts out many of the legal accounting tricks (such as excessive debt) that managers use to boost earnings numbers, and it provides you with an apples-to-apples way to evaluate businesses, even across industries. The higher the ROIC, the more efficiently the company uses capital.
Ultimately, we're looking for companies that can invest their money at rates that are higher than the cost of capital, which for most businesses is between 8% and 12%. Ideally, we want to see ROIC above 12%, at a minimum, and a history of increasing returns, or at least steady returns, which indicate some durability to the company's economic moat.
Here are the ROIC figures for Frontier and three industry peers over a few periods.

Company	TTM< /p>	1 Year Ago	3 Years Ago	5 Years Ago
Frontier Communications	4%	2.8%	6.9%	8.2%
Windstream (Nasdaq: WIN  )	6.9%	7.2%	12.4%	7.9%
CenturyLink (NYSE: CTL  )	2.9%	7.5%	6.7%	6%
AT&T (NYSE: T  )	5.6%	5.9%*	6%	6.5%

Source: S&P Capital IQ. TTM=trailing 12 months.
*Because T did not report an effective tax rate for one year ago, we used its 35% effective tax rate from three years ago.

Frontier's returns on invested capital are less than half of what they were five years ago. The other companies have also seen declines in their ROIC from five years ago, suggesting that the telecom space is particularly difficult.
One thing that makes Frontier so attractive to investors is its high dividend yield. Unfortunately, its low returns, which are shrinking over time, suggest that Frontier may not be able to grow its dividend in the future. In fact, Frontier already had to decrease its dividend by 25% last year, and its shrinking ROIC suggests that it may have to reduce those yields even more.
On the upside, Frontier's acquisition of Verizon assets last year gives it the potential to take advantage of economies of scale, which could help it improve its returns on invested capital in the future. Its increase in returns! from la st year offers some hope in Frontier's ability to improve its ROIC to a more attractive level.
Businesses with consistently high ROIC show that they're efficiently using capital. They also have the ability to treat shareholders well, because they can then use their extra cash to pay out dividends to us, buy back shares, or further invest in their franchise. And healthy and growing dividends are something that Warren Buffett has long loved.
So for more successful investments, dig a little deeper than the earnings headlines to find the company's ROIC. Feel free to add these companies to your Watchlist:

• Add Windstream to My Watchlist.
• Add AT&T to My Watchlist.
• Add Frontier�Communications to My Watchlist.
• Add CenturyLink to My Watchlist.