Latest in Stimulus: 'Cash for Refrigerators' ? - Big Big Forums

Jolie Rouge · 08-24-2009, 02:40 PM

Latest in Stimulus: 'Cash for Refrigerators'
By Matthew Boyle
Mon Aug 24, 8:08 am ET

A $300 million cash-for-clunkers-type federal program to boost sales of energy-efficient home appliances provides a glimmer of hope for beleaguered makers of washing machines and dishwashers, but it's probably not enough to lift companies such as Whirlpool (NYSE:WHR - News) and Electrolux out of the worst down cycle in the sector's history.

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won't have to trade in their old appliances.)

"These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy," Energy Secretary Steven Chu said in a statement announcing the plan. Only appliances covered by the Energy Star seal will qualify. In 2008, about 55% of newly produced major household appliances met those standards, which are set by the Energy Dept. and Environmental Protection Agency.

The money can't come soon enough for the home appliance industry, which is mired in an unprecedented sales slump that began when the housing market cooled in 2006. Since then that slump has worsened considerably. Shipments of washers, dryers, refrigerators, and ovens dropped 10% in 2008 and are down 15% through July, according to the Association of Home Appliance Manufacturers. "It's brutal," says Raymond James analyst Sam Darkatsh.

a marketing push around rebates

The leading appliance makers have felt the pinch. Whirlpool of Benton Harbor, Mich., which controls about 40% of the U.S. market, has seen its sales drop 20% through the first two quarters of this year. North American shipments for its Stockholm-based rival Electrolux, meanwhile, have dropped for a dozen consecutive quarters. Both companies have laid off hundreds of workers, and General Electric (NYSE:GE - News) mulled shutting down an entire refrigerator plant earlier this year until deciding to keep it open with a reduced workforce.

Not surprisingly, appliance makers cheered the news. Electrolux spokesman Tony Evans calls the federal program a "great opportunity to encourage consumers to replace their old appliances." Lately, cash-strapped consumers have chosen to repair, rather than replace, hobbled dishwashers and other water-intensive appliances, according to industry analysts. Electrolux says it is readying "aggressive" marketing programs that will run parallel with the rebates, and it's reasonable to expect appliance makers and retailers will devise additional discounts to amplify the rebates' appeal. "We will be ready to go when the new incentive programs hit the market," Evans said.

Unlike the popular, $3 billion cash-for-clunkers vehicle program, which ends on Aug. 24, there's no guarantee that hard-hit consumers are prepared to plump for new washers, stoves, and fridges. The federal outlay will piggyback on rebate programs for energy-saving appliances that have existed for years in more than 25 states, but which have largely failed to spur demand. Home improvement retailers like Home Depot (NYSE:HD - News) and Lowe's (NYSE:LOW - News) have also offered deep discounts on big-ticket appliances lately, with little impact.

"The cash-for-clunkers (program) had a discernible value proposition for the consumer, because he knows how much his (clunker) is worth," says Darkatsh, the Raymond James analyst. "With appliances, there is no trade-in. You can walk into Home Depot and get a great deal on a home appliance any time you want one. Why would it drum up sales now?" Laura Champine, an analyst with Cowen & Co. (NasdaqGS:COWN - News), agrees. "I'm not sure if it will be as powerful as cash for clunkers because there is something compelling about that $4,500 discount," she says. "Also, a new car is more fun than a new dishwasher. So I'm not sure if it will be as much of a driver, but any driver is welcome right now."

Stock Market Overreaction

Analysts also believe that the stock market's reaction to the program is overblown. Whirlpool's shares rose 6% on Aug. 20 when news of the program circulated, and climbed another 5% the following session. "That's silly," says Darkatsh. He estimates that in a best-case scenario the rebates will equate to about $240 million in incremental sales for Whirlpool. But that's unlikely, as it assumes that every American buying under the voucher program would not have done so otherwise. "The vast majority would have bought them anyway," as purchases of appliances such as fridges and washing machines are far less discretionary than, say, cars or big-screen televisions, Darkatsh says.

The recession's ability to blunt the program's impact was underscored by a call to the California Energy Commission to discuss its approach to the rebate program. The entire state office is on unpaid furlough each Friday in August; no one picked up the telephone.

http://news.yahoo.com/s/bw/20090824/...20090821304909

Jolie Rouge · 08-24-2009, 02:48 PM

Cash for Kitchen Appliances
By Michelle Malkin
August 24, 2009 12:54 PM

http://michellemalkin.com/2009/08/24...en-appliances/

Washington just doesn’t get it. Spending beyond our means is what got this country into trouble in this first place. Political gimmickry like Cash for (fill-in-the-blank) only exacerbates the root cause. Government has no business encouraging people to take out car loans or home loans — or buy new refrigerators or dishwashers — when they should be saving their money instead.

They don’t get it. Via Business Week: http://www.businessweek.com/bwdaily/...821_304909.htm

Quote:

A $300 million cash-for-clunkers-type federal program to boost sales of energy-efficient home appliances provides a glimmer of hope for beleaguered makers of washing machines and dishwashers, but it’s probably not enough to lift companies such as Whirlpool (WHR) and Electrolux out of the worst down cycle in the sector’s history.

Beginning late this fall, the program authorizes rebates of $50 to $200 for purchases of high-efficiency household appliances. The money is part of the broader economic stimulus bill passed earlier this year. Program details will vary by state, and the Energy Dept. has set a deadline of Oct. 15 for states to file formal applications. The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November. (Unlike the clunkers auto program, consumers won’t have to trade in their old appliances.)

…Not surprisingly, appliance makers cheered the news. Electrolux spokesman Tony Evans calls the federal program a “great opportunity to encourage consumers to replace their old appliances.” Lately, cash-strapped consumers have chosen to repair, rather than replace, hobbled dishwashers and other water-intensive appliances, according to industry analysts. Electrolux says it is readying “aggressive” marketing programs that will run parallel with the rebates, and it’s reasonable to expect appliance makers and retailers will devise additional discounts to amplify the rebates’ appeal. “We will be ready to go when the new incentive programs hit the market,” Evans said.

Forget a new fridge. I want cash for an upgrade to Wii Fit Plus. I’m sure the Fitness Czar will approve.

Wait, it gets better: Cash for Coiffures!
By Michelle Malkin • August 24, 2009 01:27 PM
http://michellemalkin.com/2009/08/24...for-coiffures/

Cash for Clunkers.

Cash for Kitchens.

And now…Cash for Coiffures: http://www.nowhampshire.com/2009/08/...timulus-funds/

Quote:

Arguing in favor of President Barack Obama’s American Recovery and Reinvestment Act in January Democratic Congressman and senate candidate Paul Hodes claimed the stimulus act would “Reduce Soaring Unemployment.”

It hasn’t worked out that way.

Instead, according to a report issued by the New Hampshire Office of Economic Stimulus, the stimulus act has created only 96 private sector jobs and has “saved” a little over 700 state government jobs. Meanwhile unemployment has climbed to 6.8% since the stimulus became law.

The reason for the low level of job creation is easily gleaned from the so-called Progress Report issued on August 19th: At least $175,000,000 of the first $336 million of stimulus money spent in the New Hampshire has replaced existing state spending on education, housing and safety programs which may have been cut due to state budget constraints.

A NowHampshire.com investigation reveals almost $37,000 of that money went to a Bedford beauty school that does not grant degrees.

The Office of Economic Stimulus granted Coiffures by Michael, Inc. $35,088 in a “direct payment for specified use,” and another $1,571 in “student financial assistance.”

Coiffures by Michael runs Michael’s School of Hair Design and Esthetics. The school promises “no learner is left behind.” Guest speakers at the school include Dean Banowetz, the self-proclaimed “Hair Ho.”

The Generational Theft Act fraud gets more hair-raising every day.

Jolie Rouge · 08-25-2009, 05:12 PM

That gives me an idea. Let’s put these guys in charge of a national healthcare program! Brilliant!

Just to recap:

Cash for Clunkers.

Cash for Kitchen Appliances.

Cash for Coiffures.

And now … Cash for Convicts.

Really.

The feckless feds are begging prisoners to give the money back. Really:

Quote:

Federal economic stimulus cash was handed out to cons behind bars in Bay State prisons after a bureaucratic snafu resulted in $250 checks being sent to some inmates - and now red-faced feds want it back. “Taxpayers already believe the inmates are running the asylum in Washington,” U.S. Sen. Tom Coburn (R-Okla.) said in a statement. “Now it appears they are being compensated for their efforts.”

Not only did the feds send the cash to incarcerated cons, but they failed to respond to state officials who sounded the alarm about the inmate windfall - now the subject of a national probe.

The state Department of Correction initially withheld stimulus checks mailed to 23 inmates because prison officials believed the convicts were not entitled to the cash, said DOC spokeswoman Diane Wiffin.

The DOC said it released the funds after the federal government ignored several requests for guidance. “In the absence of a formal directive, DOC determined that it did not have grounds to continue to withhold the checks from the recipients,” Wiffin said in an e-mail.

The Herald learned yesterday the U.S. Social Security Administration is asking at least 14 of the Bay State prisoners to return the cash. Inmates are generally not allowed to receive Social Security benefits while incarcerated.

It’s not clear if the cons have already spent the money in the commissary or elsewhere, however.

:

Now we are waiitng for a Cash for TV's program to buy back all the outmoded television sets that are headed to the landfills because with the digital conversion - required by law - made so many well made still functioning sets obsolete.

jasmine · 08-25-2009, 05:24 PM

even if they did give me cash credit to go towards a new appliance, I still wouldn't be able to afford it. Just like the cash for clunkers, yeah, so, they gave you credit to go toward a new car, still doesn't mean I can afford it

I have no car payment now, why would I want one?
As for the convicts getting that money(checks), I say put it towards taking care of their azz while they are locked up.

gmyers · 08-25-2009, 06:01 PM

Thats the way it was for us too. It didn't matter how much cash for clunkers they gave we couldn't afford to make new car payments either or the insurance on a new car.

pepperpot · 08-25-2009, 06:05 PM

These programs are not for the purpose of 'helping' anyone out....they are to get less energy efficient items into the garbage pile.

A temporary perk to the economy/industry was not intended/planned but happens nevertheless...and they'll take credit for that genius stroke as well.

littlebuggy · 08-25-2009, 06:18 PM

It just feels to me like this is another way to entice people into buying things they can't afford. My hubby and I bought a hybrid last year because we saved for it. And, yea, I would LOVE a new dishwasher, mines at least 6 years old, but it still cleans the dishes so I have no reason to run out and buy a new one that I can't afford. Sadly, some people will, and then when they can't afford to pay a bill here or there they won't understand what went wrong.

krisharry · 08-25-2009, 06:46 PM

OK, since I think the cash for programs are ridiculous here are a few suggestions.
Cash for boobs- I could certainly use a new set LMAO
Cash for handbags-I could always use a new one

LMAO

Jolie Rouge · 10-19-2009, 04:31 PM

[b]Cash for Clubbers [b]
Congress's fabulous golf cart stimulus

We thought cash for clunkers was the ultimate waste of taxpayer money, but as usual we were too optimistic. Thanks to the federal tax credit to buy high-mileage cars that was part of President Obama's stimulus plan, Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart.

The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don't have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. "The purchase of some models could be absolutely free," Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. "Is that about the coolest thing you've ever heard?"

The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour.

In South Carolina, sales of these carts have been soaring as dealerships alert customers to Uncle Sam's giveaway. "The Golf Cart Man" in the Villages of Lady Lake, Florida is running a banner online ad that declares: "GET A FREE GOLF CART. Or make $2,000 doing absolutely nothing!"

Golf Cart Man is referring to his offer in which you can buy the cart for $8,000, get a $5,300 tax credit off your 2009 income tax, lease it back for $100 a month for 27 months, at which point Golf Cart Man will buy back the cart for $2,000. "This means you own a free Golf Cart or made $2,000 cash doing absolutely nothing!!!" You can't blame a guy for exploiting loopholes that Congress offers.

The IRS has also ruled that there's no limit to how many electric cars an individual can buy, so some enterprising profiteers are stocking up on multiple carts while the federal credit lasts, in order to resell them at a profit later. We should note that some states, such as Oklahoma, have caught on to the giveaway and are debating whether to cancel or limit their state credits. But in Congress they're still on the driving range.

This golf-cart fiasco perfectly illustrates tax policy in the age of Obama, when politicians dole out credits and loopholes for everything from plug-in cars to fuel efficient appliances, home insulation and vitamins. Democrats then insist that to pay for these absurdities they have no choice but to raise tax rates on other things—like work and investment—that aren't politically in vogue. If this keeps up, it'll soon make more sense to retire and play golf than work for living.

http://online.wsj.com/article/SB1000...099542430.html

Jolie Rouge · 10-20-2009, 01:49 AM

Punchline of the day
By Michelle Malkin • October 19, 2009 10:33 PM Oh, crikey. I’m cramping up.

From.

Laughing so hard.

Ouch. Ow. Stop the pain! http://abcnews.go.com/Business/obama...ory?id=8864497

Quote:

The administration’s new two-pronged initiative, operating under a law passed by Congress last year, will consist of a bond purchase program to support new lending by these agencies, and a temporary credit and liquidity program to boost agency access to credit sources for their existing bonds.

The eventual size of the program will be set according to agency demand, but it does have a ceiling, said Michael Barr, Treasury’s assistant secretary for financial institutions, during a conference call with reporters this afternoon.

“The program levels are really being built from the ground up,” Barr said. “We need to have a much more refined sense of both demand and eligibility to determine the appropriate scaling of the program.”

Whatever the eventual size of the program, Barr said American taxpayers will be reimbursed through fees paid to Fannie Mae, Freddie Mac, and the Department of the Treasury. All these agencies are major backers of mortgages.

“There will be strong taxpayer protections,” he said, adding that the “expected cost to the federal government is zero” because of these fees.
Another “temporary” housing entitlement with “strong taxpayer protections” and an “expected cost to the federal government” of “zero.”

Laughter turning to tears. Wealth redistribution is no joke.

Jolie Rouge · 11-04-2009, 06:49 PM

AP IMPACT: Clunker pickups traded for new pickups
By Ted Bridis, Associated Press Writer
17 mins ago

WASHINGTON – The most common deals under the government's $3 billion Cash for Clunkers program, aimed at putting more fuel-efficient cars on the road, replaced old Ford or Chevrolet pickups with new ones that got only marginally better gas mileage, according to an analysis of new federal data by The Associated Press.

The single most common swap — which occurred more than 8,200 times — involved Ford F150 pickup owners who took advantage of a government rebate to trade their old trucks for new Ford F150s. They were 17 times more likely to buy a new F150 than, say, a Toyota Prius. The fuel economy for the new trucks ranged from 15 mpg to 17 mpg based on engine size and other factors, an improvement of just 1 mpg to 3 mpg over the clunkers.

Owners of thousands more large old Chevrolet and Dodge pickups bought new Silverado and Ram trucks, also with only barely improved mileage in the middle teens, according to AP's analysis of sales of $15.2 billion worth of vehicles at nearly 19,000 car dealerships in every state. Those deals helped the Ford F150 and Chevy Silverado — along with Ford's Escape midsize SUV — climb into the Top 10 most-popular vehicles purchased with the government rebates. The most common truck-for-truck and truck-for-SUV deals totaled at least $911 million.

In scores of deals, the government reported spending a total of $562,500 in rebates for new cars and trucks that got worse or the same mileage as the trade-ins — in apparent violation of the program's requirements. The government said it is investigating those reports and said in some cases they were probably entered incorrectly by dealers or based on outdated fuel economy figures.

The National Highway Traffic Safety Administration is still reviewing the reports, and any dealers that submitted invalid trade-ins will be directed to return the government rebate, spokesman Eric Bolton said Wednesday.

The new data, obtained by the AP under the Freedom of Information Act, include details of 677,081 clunker trade-ins processed by the government through Oct. 16. More than 95,000 of the new vehicles purchased under the program — or about one in seven — got less than 20 mpg, according to the data.

The new figures, requested four months ago by the AP, represent the first substantial outside accounting of the clunkers program, lauded by the White House and the Transportation Department for improving fuel economy, stimulating sales and taking the dirtiest vehicles off the road. The data show the average fuel economy was 15.8 mpg for the old vehicles and 24.9 for the new ones. But plenty of consumers bought relatively low-mileage trucks and SUVs with the help of government checks.

"If we're looking for the environmental story here, we're going to be disappointed," said Jeremy Anwyl, chief executive at Edmunds.com, an analyst firm. "It might have started out from the perspective of improving the environment, but it got detoured as a way to stimulate the economy."

Popular high-mileage commuter cars including the Toyota Corolla, Honda Civic, Toyota Camry and Ford Focus also were among the Top 10 most popular new vehicles bought under the four-week program, with 105,280 of those models sold for a total of about $2 billion.

Bolton, the NHTSA spokesman, said Wednesday the program "proved to be a win for the economy and the environment" because it helped financially struggling dealerships and auto manufacturers and because, under the program's rules, clunkers necessarily were replaced with vehicles that got better mileage.

Chris Moss of Smithtown, N.Y., traded in his 1992 white Ford F150 pickup — "it had 5 million miles on it and needed $50,000 in repairs, if you know what I mean" — for a new Chevrolet Malibu hybrid for his wife. When he drove his old truck to the dealership's back lot with the rest of the clunkers, "90 percent of what you saw were old 150s and Explorers," he said. Moss posted a video on YouTube of his old truck's final day, called "Rust In Peace."

The $3 billion program, known officially as the Car Allowance Rebate System, ran from July 27 to Aug. 25 and generally required that new vehicles get better mileage — at least 22 mpg for cars and either 15 mpg or 18 mpg for trucks depending on class — and that trade-ins get no more than 18 mpg. The trade-ins were required to be destroyed in exchange for either $3,500 or $4,500 rebates.

"The value that the customer got for a lot of these vehicles was just a gift, no question," said Scott Pundt, sales vice president for the Dorschel Group of Rochester, N.Y., the No. 4 dealership in the U.S. with 592 vehicles sold under the program. "We were appraising 220,000-mile vehicles that were really rough, and they were getting $3,500 or $4,500 for them." Four out of five old cars turned in there exceeded 100,000 miles.

Some deals raise eyebrows:

• In at least 145 cases, mostly involving trucks, the government reported consumers traded old vehicles that got better than or the same mileage as the new vehicle they purchased. The government said it was continuing to investigate. A driver in Negaunee, Mich., traded a 1987 Suburban that got 18 mpg for $3,500 toward a new Silverado pickup that got only 15 mpg. An Indianapolis driver traded a 1985 Mercedes 190 that got 27 mpg for $3,500 toward a new Volkswagen Rabbit that got only 24 mpg. "It's possible some quirky deal slipped through the cracks," Anwyl said.

• In at least 15 deals in nine states, owners of large pickups cashed in old trucks for between $3,500 and $4,500 toward new Hummer H3 SUVs that got only 16 mpg.

• A driver in Arlington, Va., traded a 1999 Ford Explorer with 15 mpg in July for $3,500 toward a new $28,000 Jeep Commander that weighs about 4,700 pounds and gets 16 mpg.

• In at least 32 deals, drivers traded older vehicles for new large trucks — including versions of Toyota Tundras, GMC Sierras, Chevrolet Silverados, Dodge Rams and Ford F150 pickups — that got only 14 mpg.

• A driver in West, Texas, earned $4,500 in July in exchange for a 1989 Chevrolet Suburban SUV that got 14 mpg and bought a 2009 Suburban that weighed 5,900 pounds and got 16 mpg. Across Texas, seven of the 10 most common transactions involved drivers trading old pickups for new ones.

Car-crazy California led clunker sales with more than 76,000 trade-ins, followed by Texas with roughly 43,000 and New York with nearly 37,000. In California, the Honda Civic was the No. 1 new car and no pickups ranked higher than 18th. In New York, the Hyundai Elantra was No. 1.

The clunkers program was very good for Longo Toyota of El Monte, Calif., just east of Los Angeles, which sold more than twice as many vehicles under the program as any other dealership in the country, worth more than $30 million. That sole dealership was responsible for 1,432 sales worth nearly $6 million in clunkers rebates, mostly from its sales of 323 Toyota Camrys, 277 Corollas and 171 Priuses.

"We knew it was just a matter of when, not if, we were going to get paid, so we kept our foot on the gas," Longo president Tom Rudnai said Wednesday.

The next-best dealership was Price-Simms Inc. of Sunnyvale, Calif., with 672 sales of vehicles worth about $16.1 million, mostly from its sales of 213 Priuses and 134 Camrys.

Pundt said his dealership in Rochester advertised aggressively to consumers and operated three shifts of employees to submit claims. "We had people in here through the middle of the night, working 2 a.m. until 7 a.m.," he said. "The computer was so slow."

Cash for Clunkers data: http://www.cars.gov/carsreport

http://news.yahoo.com/s/ap/20091104/...1wYWN0Y2x1bg--