We all know how the economy got into this mess. Banks took their debt and sold it to other people. Now you can do the same. The Receivables Exchange lets you market your outstanding debt online to investors around the world and get paid as quickly as three days. Sounds shady. But the company just got $8 million in funding from Redpoint Ventures, which has also backed TiVo and MySpace. The Receivables Exchange is open to small and medium-size businesses. Buyers of debt, it says, include “investment-shy hedge funds, investment firms and insurance companies.” Although, if you get a bid from AIG, we suggest you take a pass.
Speaking of AIG, here’s our 2 cents on those retention bonuses. Retention?! Are they kidding? Where are these people going to go? Who’s going to hire anyone with AIG on his resume?
Stimulus-plan tax breaks for small biz. Look closely and, buried amid the trillions in aid for corporations, you can find some help for small business in the American Recovery and Reinvestment Act. One is an IRS rule that allows you to carry back net-operating losses as far as five years. “The new provision could throw a lifeline to struggling businesses, providing them with a quick infusion of cash,” says IRS Commissioner Doug Shulman. “We want to make it as easy as possible for small businesses to take advantage of these key tax benefits.” That’s a first.
Living on beer and cigarettes. That’s how Zimbabwe is getting by, reports that country’s new finance minister. This intrigued us. But turns out he’s talking about tax revenues. Cancel that flight to Harrare.
If everybody hates you, you must be doing something right. Obama’s strategy to aid small business is taking fire from all sides. The American Small Business League, a frequent Main Street fist-shaker, decries Obama for continuing to ignore the problem of big business stealing government contracts from small business. Meanwhile, the Wall Street Journal, always happy to carry water for corporations, is sniping at Obama’s small-business loan program for “lack of oversight.” Are they kidding? The government has spent the past six months shoveling billions into the laps of criminally incompetent CEOs. So why the bashing for Obama when he (finally) tosses some change into the guitar case of small businesses singing the blues?
Last word on AIG comes from Dan Pedrotty, director of investments at the AFL-CIO, who wonders about the sudden sacrosanctity of contracts when it comes to AIG bonuses. As Pedrotty pointed out to the L.A. Times (at the bottom of the article) hourly auto workers were forced to give up their contract rights, so why not AIG employees? “AIG would not be in existence were it not for the American taxpayers,” Pedrotty says. “So it really doesn’t pass the laugh test.”