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Republicans In Congress Out To Lunch On Ex-Im Bank Funding

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Ex-Im supports a broad spectrum of industries, but is especially important to Boeing–so much so that Ex-Im is sometimes derisively called Boeing’s Bank due to the dominance of Boeing airplanes funded by Ex-Im. Ex-Im reaches its $100bn cap this month, according to The Hill, much earlier than the previously anticipated May. Boeing and GE–which supplies engines for 92% of Boeing’s airplanes–are lobbying Congress to increase the cap to $140bn. This might sound like lunacy in the budget crisis, but… (leehamnews.wordpress.com) さらに...

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NSGDC
Personally, I think we should increase the cap. However, those who don't, aren't 'wrong' or 'out to lunch'. The reason EX IM generates fees is risk. The Bank, on behalf of the American tax payer, charges fees for the risk the tax payer assumes in supporting these deals. This structure is very similar to the Department of Energy's guarantee program which allowed the Solyndra debacle to occur. Ex-Im bankers have been doing this for a long time, though, and know how to do deals. DOE staffers were lambs in a financial field of wolves….certainly not ready for prime time. That said, Members who question the Bank are right to do so. Given proper oversight, this is an enterprise which should be allowed to continue. What’s the old saying? As true today as it was in the post war economy…”What’s good for American business is good for America”.
WALLACE24
I am not very educated on this deal, but I'm sure it started out with good intentions. I think you hit the nail on the head about proper oversight. I don't think there is such a thing anymore. The overseers are all double agents. Might I bring up Freddie and Fannie?
preacher1
For the kind of $ involved here, there has got to be a good financing souce as these deals will far outdo your corner bank, BUT, oversight is the key word. Big Question, Why does the cap need raising sooner than anticipated?
WALLACE24
Bet it's because too many of the worlds airlines are expanding too big, too fast. We know what comes next.
preacher1
You probably right.
upchucked
Can you say Boeing 380? The international players have to have them if they are going to compete and save $$ on fuel.
WALLACE24
Airplanes don't depreciate? So when one airline goes broke and another airline buys them, they pay as much for the planes as the original purchase price? If it such a great bulletproof deal, why do the taxpayers even need to be on the hook? Looks like the investment community worldwide would be all over it.
preacher1
Boeing 380????
WALLACE24
Guess there was a merger we didn't know about.
racerman
If airplanes don't depreciate, why do you see used ones offered for sale at a fraction of what they cost new? It may be true that new models don't depreciate as rapidly as equipment in other industries, especially when there is great demand.The concept of supply and demand determines the selling price of planes, just as it does most things.When the economy takes a dive, and planes are parked you can be assured they are not selling for what they cost new.,
davisdd
how come GE capital isn't providing the money? With the stimulus and paying no taxes they should be cash rich.
chalet
chalet 1
As every person knows, the 787 has of a lot of components made in Korea, Italy, Japan and many other countries, to the tune of I would venture 40% ot is final cost maybe more so these foreing materials should NOT be financed by the U.S. Eximbank but since Boeing has a lot of sway in the decisions of than lending agench (translation: polital strings) I would not be surprised that they were able to get "waivers" so the entire selling price is financed by the U.S. Government. And the beat goes on, as the song says.
upchucked
These are collateralized loans and unlike automobiles and television sets, passenger aircraft and aircraft engines don't depreciate. Some appreciate substantially. If a financed sale to Air India is subject to a default, the Ex-Im bank takes back the plane and resells it to Air-Bengazi, often at a substantial profit. Face it, the world of commercial aviation can't function without a credit bank and if we don't offer it, France will and soon you will see Airbus Industries selling to every carrier and Boeing will be sucking wind.
SpoutingHorn
Export Import bank is just a crony capitalist tool that sucks the life blood out of the Taxpayer. You want the Taxpayer to fund your business? F U!
davisdd
Take your attitude to another blog. As a aviator and a person I don't care for your tone. Civil conversation and disagreement is fine and accepted but not the way you put it here. Others may agree with you but they show more respect. so flake off.
jhakunti
This is just setting us up for the largest collapse of our economy ever. this is just borrowing more money to prop boeing and ge sales to keep them from the same effects as the car industry. it sure possesses the lack of oversight to a degree of almost unlimited money so i can see how the trillions to even maybe quadrillions of dollars have been spent on this over the years.
upchucked
These are collateralized loans and unlike automobiles and television sets, passenger aircraft and aircraft engines don't depreciate. If Air India fails and stops making payments, the plane comes back and is re-sold to Air Bengazi, often at a profit.
chalet
chalet 1
Don´t be so naive, give me an example of what you are saying -that Exim sold repossed planes at a profit- and I will buy you a first class round trip ticket to an expensive resort of your choice (LOL). Every asset do depreciate, period. The moment a Boeing or Airbus aircraft goes out the factory its price goes down a bit; if it is a repossesed aircraft with a few years of service the depreciation (or loss of value of you prefer) is even greater as very often the interior has to be modified to suit the needs of the new owner, sometimes even the avionics have to be replaced, and all of this means added cost to the new owner and a lot of time lost while the refurbishing is done.
WALLACE24
I have already expressed my opinion on the depreciation thing, but let add this: If an airline in some 3rd world pos country can't make their payments, I'm sure they just call the bank and say come get the planes. You know as well as I do that they will run them until they are ragged if someone doesn't repo them. And that can be way harder than picking up a Ford in Harlem.
slgordon3
I'm not getting the "airliners don't depreciate" thing. Could you explain more? It just seems that, under conventional logic, an airline that buys a plane, uses it for 10 years, and then sells it will get less than 100% of amount the plane was originally purchased for. Are you talking about taxable depreciation (airliners are often leased by the airlines from companies like ILFC, so in that sense the plane isn't decpreciable by the airline)? Just trying to understand. Thanks.

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