Politics makes strange bedfellows as parts of Labor and the Tea Party come together

by: Jason Springer

Wed Feb 17, 2010 at 02:30:00 PM EST

The casino workers' union, Unite HERE, and  Americans for Prosperity are allied, along with the local conservative group Liberty and Prosperity 1776, behind a "No Morgan Stanley Bailout" campaign, an effort to cast plans for a state rescue of the half-built Revel casino as a bailout of the Morgan Stanley, the investment house that is reportedly the casino's main investor.

The plan would require Revel to pay just 25 percent of its sales and room taxes over its first 20 years of operation, scheduled to start in 2011. Revel officials have called the funding "an important factor" in securing financing to complete its $2 billion megaresort.

Geithner's statements today

by: Hopeful

Mon Mar 23, 2009 at 04:52:30 PM EDT

Did Geithner try to mislead Menendez (and us)? I think so.

by: Hopeful

Mon Mar 23, 2009 at 03:15:24 AM EDT

MENENDEZ:  Can you talk to us about asset valuations?

GEITHNER:  "Absolutely enormously difficult to decide on a mechanism that will give us confidence that the values are fair and realistic, and that the government understands the risks we are assuming.  There are no perfect ways to do this.  One approach is for the government to decide.  One approach is for the government to use independent model based estimates for valuation.  We are concerned  neither of those two approaches would give us the level of comfort we need, so instead what we propose to do is design a fund that can have private capital come in along side government financing and use that as a way to help solve this valuation problem.  And we believe doing it that way will leave us with better protections against the risk in making these basic judgments independently on our own.

Here's what the New York Times' sources are saying.  Note that it's what the investors are hearing, not the public spin:

Executives briefed on the plan said it did not address the central question of how to bridge the divide between what the banks want to sell the assets for and what investors are willing to pay for them. The government hopes that the subsidies it provides to investors are so rich that they will be willing to risk overpaying somewhat for the assets.

Now, I'll admit there are multiple ways to read this, but in my opinion it plainly means the government is not getting the benefits of the investors' judgment. Rather, they themselves say Geithner is bribing them to pay more -- and that means Geithner mislead Menendez.

There's even worse in the article. The next sentence is:

The White House plan is intended to leverage the dwindling resources of the Treasury Department's bailout program with money from private investors to buy as many toxic assets as possible and free the banks to resume more normal lending

Really, so the government is leveraging the bailout money with investors' money?  Why, then, does the article report:

Three chiefs of investment firms said in interviews that they were impressed with the terms of the program - which would have the government lend nearly 95 percent of the money for any investment - but remained reluctant to participate because of the potential for future regulation.

I'm sorry, but that means the White House sources are wrong. That is not the government leveraging -- we are putting up more than 9 out of every 10 dollars -- it is the private investors getting to leverage. I don't see how adding an extra 5% of private money, to give up more than 5% of the profits and when the partners apparently say you are overpaying by (much) more than 5%, makes any sense. I would guess that's why when Menendez asked "How much of public/private is going to be public and how much is going to be private? Valuation? " Geithner gave some answer about banks reporting and not anything about how much is public/private.  I thought he misunderstood the question, or I did, but now I think he was evading the question.

I am deeply concerned about this plan. I am as rabidly pro-Obama as I can imagine, and I don't pretend to know how to unfreeze credit markets, but my faith does not extend to this Treasury Secretary or Larry Summers... and in my opinion, either Geithner mislead the executives, or he mislead the public and Senator Menendez.  Given his tax problems, I don't see how I am supposed to believe in his honesty.  Nor I am impressed that Christina Romer says these investors are "doing us a favor," because I doubt there is anyone in America who believes Wall Street does favors for nothing. The Obama administration needs to wake up, because if they have a better case to make, they'd better make it.    

$210 Million of AIG Bailouts Went to New Jersey Municipalities

by: Hopeful

Sun Mar 15, 2009 at 09:54:27 PM EDT

American International Group, Inc. (AIG) recognizes the importance of upholding a high degree of transparency with respect to the use of public funds. As a result, after close consultation with the Federal Reserve, AIG is disclosing information identifying certain credit default swap counterparties, municipal counterparties and securities lending counterparties

We're interested in New Jersey politics, so it's the "municipal counterparties" that are of interest:

Municipalities in the states listed on Attachment C received a total of $12.1 billion from AIGFP between September 16, 2008 and December 31, 2008 in satisfaction of Guaranteed Investment Agreement (GIA) obligations. GIAs are structured investments with a guaranteed rate of return. Municipalities typically use GIAs to invest the proceeds from bond issuances until the funds are needed.

The AIG Attachment C (PDF) shows that $210 million of this money went to New Jersey. While there's something to get outraged about just about every day with AIG, if it were not for the Federal bailout our towns would have taken a huge financial hit, as their "guaranteed" safe investments were not.  My reading is that we could literally have owned money on bonds even though the money had been lost.

Are we going to get ripped off?

by: Hopeful

Wed Feb 11, 2009 at 03:25:44 PM EST

MENENDEZ:  How much of public/private is going to be public and how much is going to be private?  Valuation?

GEITHNER:  We're going to ask banks for a plan of what they are going to do with the money, then they're going to have to report on a monthly basis and we're going to let the public see that.  

MENENDEZ:  Can you talk to us about asset valuations?

GEITHNER:  "Absolutely enormously difficult to decide on a mechanism that will give us confidence that the values are fair and realistic, and that the government understands the risks we are assuming.  There are no perfect ways to do this.  One approach is for the government to decide.  One approach is for the government to use independent model based estimates for valuation.  We are concerned  neither of those two approaches would give us the level of comfort we need, so instead what we propose to do is design a fund that can have private capital come in along side government financing and use that as a way to help solve this valuation problem.  And we believe doing it that way will leave us with better protections against the risk in making these basic judgments independently on our own.

"Now no process is perfect, and you're right to ask what is the risk and return for the government in this area. One of the reasons why weay this out in general terms today, is because this is enormously complicated to get right, and we're going to try to get it right before we layout the details."

Menendez got to the key question, which I translate to: Are we going to get ripped off because we don't know what price to pay?  It seems to me that Geithner's strategy of bringing in partners is a plausible way of improving our offers to the banks, but at this point I have little faith in these assurances.  We know the TARP oversight board believes we overpaid last year for these assets.  One problem is that I'm not confident these so-called "partners" aren't ripping us off too.  I hope Senator Menendez and everyone else in Congress continues to push on this key question. Calls to "give Geithner a break are unwise.

Barack & NJ Dem Delegation Need Our Help

by: Nick Lento

Fri Jan 30, 2009 at 02:22:15 PM EST

What is quoted below is a cross post from something I submitted to the NYT yesterday (before I got around to reading Chip's diary).

On the one hand we all must support Barack Obama and back him, on the other we also need to take care not to blindly/robotically march in lockstep when the administration may be doing too little, too late and/or going in the wrong direction.     Obama needs to be constructively critiqued also.   It's a delicate balance, that is required.

Frankly, the Republican's have now publicly adopted Rush line

"I hope he fails."

The Republican agenda is to put the American people through hell just so their big business patrons can keep on stashin their cash and buying up cheap assets until 2012 when the country is in such a shambles that they can then make their "big con" a complete "success" when they blame it all on Barack and pick up the pieces (which they'll own at bargain basements rates).      That's their script.

We don't have to let that happen.

Obama needs to understand that he's not dealing with honest decent people.  He needs to seize the bully pulpit and lead a  couple of hundred million Americans in a radically new direction.    He has that potential.   But, frankly, I don't see him doing it unless there is a call for it from the ground up.

Anyway, here's the cross post.....

http://community.nytimes.com/a...  (that goes to the page the comment # 79  is on)

January 29, 2009 1:21 pm

Passing this bill is, at best, marginally better than doing nothing at all, but that's about it.

The stimulus needed to be 4 times larger and structured in a radically different manner.

It also needed to be part of a radical (yes there's that word again) omnibus electoral and ethics reform package that would take the dirty money out of politics and criminalize the "legal" behaviors that have enabled the theft of our economy.

This current mess was not caused by any normal/healthy "market forces"; it is the pathological result of the cumulative effects of legalized corruption. Our political and economic infrastructure are legally corrupt from the branches right down to the roots.....and that's why the solutions must be radical and wholistic.

No shallow "single shot" remedies will work. The same corrupt infrastructure that caused the problems in the first place, are simply feeding off of what's being done to correct the situation. What we're doing now is like pumping intravenous antibiotics into a in infected person with peritonitis without performing emergency surgery to first clean out the fecal matter that is the cause of the infection. There isn't enough money on the planet to "bail out" this sinking ship.....we must repair the leak as we bail.

The Republicans are right to oppose; but they are doing it for all the wrong reasons.

Arguably, the Bush administration perversely left Obama this "poison pill" of an economy just to sabotage his presidency. Arguably the Republicans started talking down the economy as soon as it became evident that there was no way they could win the presidency.....that's how low our politics has become.

The financial "services" industry is rotten to the core and deserves to be allowed to go bankrupt. We need to nationalize enough banks to keep depositors confident that their money is safe and to start sane lending to worthy applicants at great rates.

All, and I mean all, of the rich folk at the top of the corrupt food chain need to be "let go". The recent disclosure that 4 billion dollars of taxpayer money was given away as "bonuses" to Goldman Sachs employees is one more instance of the gang raping of ordinary working Americans who simply play by he rules and pay their taxes and have no special connections. Further, we need to implement policies that will track the stolen wealth and tax/confiscate it.......there are way too many rich powerful people who see democracy as a threat to their wealth and power. They won't just "go away".

Sadly, Obama, in a well intended good natured wish to compromise and be a nice guy is being taken for a ride. For all of his great intelligence and obvious talent....he's being conned.

Unfortunately, the people in charge will not listen to common sense. For the most part they owe their own jobs/power to the legally corrupt pay to play system that is American politics and governance....so this horrendously costly charade will go on until the bottom really falls out and so much stuff hits so many fans that we finally wake up.

I just hope our democracy survives the shock.....as no doubt, the next phase of the con job will be to try to "capitalize" on the disgust and disillusionment that most people will feel when things begin to really get bad.

We need deeply intelligent and wholistic/radical solutions to these systemic problems; not emergency measures patched together in a few days/weeks that just dig us deeper into the pits. I realize that the picture I've sketchily outlined here is so ugly that most of you will reject it out of hand.....that kind of denial is understandable.

Obama has it right when he talks about us not "Republicans or Democrats" etc; the problems that beset us now are, in a divinely comic/dramatic way a great opportunity to become dis-illusioned with unsustainable policies of the past that can only lead to more waste, war, pollution and generalized human misery.

The relatively small number of rich and powerful parasites who think they are somehow "getting over" will all grow old and die in a poverty of spirit so profound that one would hope that there is no afterlife lest they be condemned to an eternity in ".......... that place [where] there will be wailing and gnashing of teeth."

I realize that this "message in a bottle"/"song and a prayer" isn't likely to make much difference against the tsunami of current events....but this is just an opening salvo. I suspect that there are many others who see what I'm pointing at...and it's up to us to have hope and to become active.

If you "catch my drift" you know that the long term stakes here go ***way**** beyond whether or not we experience an economic depression or we avoid one; let's get busy folks!!!

Nick Lento, New Jersey

It's time for a wholistic and thoroughly integrated/thought out plan that can address all of these economic issues.    The problems are all connected to each other and the solutions must be equally connected.   Obama has the potential to actually do this.   President Obama (and our whole NJ Congressional Delegation) just need a lot of toughly loving nudges from 50 million  active progressives.

Pallone talks bailout on Your World

by: Jason Springer

Wed Jan 14, 2009 at 10:30:00 AM EST

NJ Bank gets bailout funds

by: Jason Springer

Sat Jan 03, 2009 at 10:49:10 AM EST

Central Jersey Bancorp will receive $11.3 million from the federal government's program to fortify banks, according to documents filed with the U.S. Securities and Exchange Commission earlier this week.

The Ocean Township-based parent company of Central Jersey Bank said it planned to use the money to improve its "already strong capital position'' and to lend to the community.

The agreement called for the Treasury Department to purchase 11,300 shares of Central Jersey Bancorp preferred stock. That means the government would be paid back before other shareholders in case of a bankruptcy.

The government also received the option to purchase up to 268,621 shares of common stock at $6.31 a share for up to 10 years.

The government will receive dividends of 5 percent a year for the first five years and 9 percent a year after that -- subject to approval of the company's board of directors.

Congressman Garrett Opposes Bailout, Supports Ineffective Government

by: johnconstantine

Wed Dec 24, 2008 at 01:30:03 AM EST

I recently posted this abbreviated article on "Retire Garrett." It's about the Congressman's opposition to the bailout packages and his role in the current economic crisis:

Congressman Garrett's voting record since his 2002 election disputes the stances he has taken on the bailouts and economic crisis. His votes, speeches, and media appearances regarding the bailout and economy are dishonest.

The evidence speaks for itself:

   * Congressman Garrett has consistently opposed government regulation of businesses since his 2002 election. Whenever a bill was proposed that held businesses accountable for how they earned their money, Garrett voted against it. His philosophy has been to let businesses act according to their own rules.

             o The Congressman voted for decreasing government oversight of the Credit Rating Agencies. Many experts have blamed the lack of government oversight of Credit Rating Agencies for misleading investors, contributing to the collapse of Wall Street (Project Vote Smart).

   * Even though he has aggressively criticized the CEO's of failing Wall Street banks and Detroit auto companies, Congressman Garrett actually supported out-of-control CEO salaries and "Golden Parachutes."

             o The Congressman was a vocal critic of a bill that would have required publicly owned companies to fully disclose the salaries of their top executives as well as the payments made to departing executives, also known as "golden parachutes." (Los Angeles Times)

   * Incredibly, the Congressman supported a $4,700 pay raise for himself and the rest of Congress that will be enacted in the  middle of the current economic crisis, with taxpayers footing the bill.  Garrett already earns $169,300 annually, which is the average for the rest of Congress.

             o A bill co-sponsored by 34 Congressmen would have blocked the $4,700 pay raise from occurring. The bill had Republican and Democratic supporters, but Scott Garrett opposed it (Fox News; govtrack.us)

Scott Garrett claims he wants whats best for his constituents and the rest of American taxpayers. He says he did his best to hold Wall Street and Detroit accountable for their business practices. He has declared that he will fight to get the country out of the current economic crisis. Scott Garrett maintains there is a bridge in Brooklyn for sale at a bargain rate.

-Michael Simonson

Big 3 failure could cost NJ 65,000 Jobs

by: Jason Springer

Wed Dec 10, 2008 at 11:00:00 AM EST

A study out Monday says Pennsylvania could lose up to 120,000 jobs and New Jersey 65,000 if all of the Big Three automakers collapse.

Nationwide, up to 3.3 million people could lose their jobs over the next year, according to an Economic Policy Institute paper called, "When Giants Fall."

It seems like once again we are left with many bad choices.  We can throw money at the Auto dealers and hope it works until they probably come back for more in a few months, have them declare bankruptcy when many say they wouldn't buy the product if that happened, or let them collapse altogether and deal with the economic ramifications of losing another industry. The restructuring has to occur, but how to make that happen is the big question.

Corzine calls for 3-6 month Foreclosure moratorium

by: Jason Springer

Mon Dec 08, 2008 at 06:35:42 PM EST

New Jersey Gov. Jon Corzine on Monday called for a three-to-six month forclosure time-out, while government officials set up systems to help homeowners modify their mortgages. "We need a bottom up approach to modifying mortgages one home at a time," Corzine told a gathering in Washington organized by the Office of Thrift Supervision. "It's going to be messy but you got to get on the ground level." Corzine said government officials should consider an approach similar to one put forward by Federal Deposit Insurance Corp. chairwoman Sheila Bair that would use $24.4 billion of a federal government $700 billion Troubled Asset Relief Program to modify loans.

"The TARP plan is a piece of cloth concealing the most real and fundamental problem" of foreclosures, Corzine said at the Office of Thrift Supervision's National Housing Forum.

The first $350 billion of the TARP has primarily been used to inject capital into banks' balance sheets, but has failed to significantly increase lending to consumers, Corzine said.

Corzine said a better use of the funds would be a broad, systematic plan to modify troubled home loans and said the second half of the TARP should go to stabilizing the mortgage markets.

He also said the U.S. government should announce a time out on foreclosures and should return to pre-2005 bankruptcy rules.

HousingWire's sources have consistently said a foreclosure moratorium alone is not enough to prevent foreclosures. Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, called a blanket moratorium "a Band-Aid approach" that fails to address the situations and circumstances of each borrower and find a suitable solution. "The only way to stop a foreclosure is to modify the loan, and that has to take place between the servicer and the borrower," Hobbs said in an interview. "So, as good as it sounds, [a blanket moratorium] really doesn't have any teeth to it, as far as actually changing a borrower's situation."

New Jersey was ranked eighth nationally with a foreclosure filing rate of one out of every 410 homes, a nearly 75 percent increase from October 2007.

If you're going through the economic ups and downs struggling with your home mortgage, tell us what you are experiencing.

Bailout Update: Rothman Blasts Wall Street Bonuses

by: Hopeful

Fri Oct 31, 2008 at 05:27:13 PM EDT

"I strongly oppose the use of the Bailout money or any U.S. taxpayer dollars to provide Wall Street executives with annual bonuses.  The executives who dealt in high-risk mortgage-backed securities, that later turned toxic, do not merit any bonuses from anyone, especially taxpayers. Further, I believe that the nine banks that have accepted capital injections from the U.S. government as part of the financial Bailout should not be giving out bonuses of any kind, with anyone's money, until these firms have repaid the money given to them by the Treasury.

"Unfortunately, this is just more evidence that the Bailout that provided Wall Street with a $700 billion blank check was a mistake.  I continue to believe that infinitely better solutions were right at hand and still can be implemented immediately to provide credit confidence and economic relief.  

He goes on to advocate for an economic stimulus package, middle class tax cuts, and restructuring mortgages.

We're now a bit removed from the immediate panic, and the original proposed use of the bailout money has already been modified.  What do you think of the bailout now?

New Jersey Municipal Debt and the credit crunch

by: Hopeful

Thu Oct 09, 2008 at 01:43:38 AM EDT

New Jersey municipal - 5 year: 2.09%  Now: 3.57%
U.S. Treasury            - 5 year: 2.76%  Now: 0.59%
U.S. Government       - 5 year: 3.11%  Now: 1.55%
Money Market           - 5 year: 3.26%  Now: 2.76%

Over the last five years -- more or less normal times -- money markets were considered very safe and paid low interest rates.  You can see that the federal government, being super-safe, paid a bit less in interest than big corporations (the regular money market). Local governments in New Jersey paid even less interest, since the interest has the advantage of being free of U.S. income tax.    

Now look at the current "7-day" rates: The ultrasafe U.S. Treasury is paying almost nothing in interest; it's the only place to put your mney and be completely sure you'll get it back. Even the corporations are still paying less than the 5-year average. But New Jersey towns (and everyone else's, by the way) are suddenly paying a lot more. Something is seriously wrong. I don't know exactly what, although this Wall Street Journal article refers to a troubled Irish bank that's affecting U.S. Municipal short-term debt.  In any case, this is going to affect us through our local government -- and if there's one thing New Jersey has a lot of, it's local governments.

Rothman's statement on his no vote

by: Hopeful

Fri Oct 03, 2008 at 02:13:40 PM EDT

"First, I won't be steamrolled into spending hundreds of billions of dollars of taxpayer money on an approach that will not solve the economic problems we face. A vote against this bill is not a vote for inaction.  I am prepared to stay in Washington as long as it takes, knowing that infinitely better solutions are right at hand and can be implemented immediately to properly address liquidity, home mortgage failures and the urgent need for a sizable economic stimulus package.

House Vote on Bailout Today: Will NJ Votes Change?

by: huntsu

Fri Oct 03, 2008 at 10:15:07 AM EDT

It looks like there will be another vote today in the House on the bailout bill, this time the one passed overwhelmingly in the Senate the other day.  Will New Jersey's delegation switch any votes?

Here's how they voted last time.  Tell us who you think will switch and who will stand their ground in the comments.

NJ-1 Andrews (D) - Aye
NJ-3 Saxton (R) - Aye
NJ-6 Pallone (D) - Aye -- STAYING AYE
NJ-7  Ferguson (R) - Aye
NJ-12 Holt (D) - Aye
NJ-13 Sires (D) - Aye

NJ-2 LoBiondo (R) - No
NJ-4 Smith (R) - No
NJ-5 Garrett (R) - No -- STAYING NO
NJ-8 Pascrell (D) - No -- SWITCHING TO AYE
NJ-9 Rothman (D) - No
NJ-10 Payne (D) - No
NJ-11 Frelinghuysen (R) - No -- SWITCHED TO AYE

At town hall, Adler says he would oppose bailout

by: Jason Springer

Fri Oct 03, 2008 at 07:44:03 AM EDT

I also got some news that given the opportunity to vote on the bailout bill, Senator Adler said he would vote NO. He pointed to some of the flaws in the legislation including all of the pork that was added in to entice support from members of the House.

Much of the focus was on the current economic situation with many people asking questions and making comments about the mortgage market, banking and what they think needs to be done to fix the situation.

I put some more photos from the event below the fold.   Meanwhile, his opponent was complaining about there not being enough debates, to which Dick Zimmer would probably say he would give anything for the schedule the 3rd District candidates have.

Lautenberg and Menendez Vote Yes on Bailout

by: huntsu

Wed Oct 01, 2008 at 09:26:22 PM EDT

Oh, and it passed in a big way.  

Of Bailouts and Asset Monetization

by: Hopeful

Wed Oct 01, 2008 at 03:46:37 PM EDT

Instead, well, we got what we got - a poorly designed initial plan that was unacceptable to congressional leaders from both parties, silence from non-governmental actors, and a rising public backlash against a mysterious and seemingly under-motivated plan.

I couldn't help but think this reminded me of Governor Jon Corzine's mistakes, particularly the asset monetization scheme, and it reminds that they have similar Wall Street backgrounds. Back in 1998, Paulson stabbed Corzine in the back to become Goldman Sachs' CEO.  It seems Wall Street leadership is not well suited for crisis situations in politics.

So I ask our readers, am I on the right track here to understand Corzine's weaknesses?  

Rush Holt and Progressive Caucus present new plan

by: Hopeful

Tue Sep 30, 2008 at 04:06:13 PM EDT

Rep. Doggett is saying that the oversights on Paulson in Monday's bill were inadequate, and that it cannot be fixed with small tweaks.  If Wall Street thinks the plan is so great, it should put up its own money. DeFazio cites Holt that if the housing market continues to deteriote, the value of the assets Paulson wants to buy will drop further.  The underlying problem is with homeowners and that needs to be addressed.

Marcy Kaptur is denying that the present crisis is the biggest ever.  She points out a crisis in the late70s/80s.  

Ejijah Cummings is giving a great defense of his no vote.  "You can't come and ask for $700B of taxpayer money, and the people of the 7th district" get nothing to help them.  And the stimulus package can't get done for $40B, but overnight we're supposed to get $700B.

Bobby Scott says their measures will deal with the problem, whereas paying taxpayers money will help out speculators but not help the problem.

Holt says he does not regret his yes vote (the only one of this group).  Holt says this plan is addressing problems he's been trying to address all along.  We should go to some sort of mortgage rescue problem, perhaps with bankruptcy reform.  If not first, then soon.

Kaptur complains that Wall Street has sucked the credit out of Ohio, and there are no longer any local banks.  (For what it's worth, not the case in my little Salem County, we have a bunch of local banks.)

The press questioned the Representatives on whether or not the leadership would consider their plan, and I did not get the sense that anyone is confident it will be considered.

The press conference is now over.

This dailykos diary claims to describe the the progressive plan (below the break)  That diary has now been deleted, I don't know if the information was accurate or not.  -Update: The same text has been posted at The Nation.

Rush Holt on Why He Voted Yes

by: Hopeful

Mon Sep 29, 2008 at 04:40:49 PM EDT

I voted in favor of the Financial Rescue Legislation because it was a significant improvement - by including taxpayer protections and strong oversight - over Secretary Paulson's original $700 billion proposal, and because inaction could have a devastating impact on our already unstable economy. However, the bill failed to gain a majority in the House.  Regardless of the outcome of this vote, I still plan to lead an effort to fix the economy in the long term. Now, we still must act in the short term to stand behind our institutions, restore confidence, and protect millions of Americans who would be affected by a continuing meltdown.

As we work to rescue our economy, we must understand how we got to this point.  The speculation and greed of Wall Street in recent years - coupled with years of failures, excesses, arrogance and irresponsibility of the Bush Administration and some in Congress - has resulted in the meltdown of our nation's financial markets. The subprime mortgage meltdown that started a few years ago affect the largest financial institutions in our nation, Bear Stearns, Lehman Brothers, and AIG, which have fallen into or are teetering on the brink of bankruptcy.