By James Dennin for Kapitall.
The Export-Import bank is a small but important remnant of The New Deal, which was President Roosevelt's economic program to lift the country out of the Great Depression in the thirties.
Basically, the way the program works is that it gives out cheap loans to foreign buyers who want to buy US goods. For instance, if a German automaker wanted to buy some of Tesla's (TSLA) batteries, they could secure cheap financing from Ex-Im Bank to do so.
The idea is that by making it easy to faciliate these loans, you're also making it easier to for US firms to export more goods. The downside is that US firms don't have access to the same arrangement, meaning that they sometimes have to pay even more for goods produced in their own back-yard.Soon-to-be former House Majority Leader Eric Cantor was a major supporter of the program among House Republicans. Analysts are saying that without high-profile support from House leadership, the agency could be in danger from the Republican's Tea Party wing, who don't think the government should be in the business of granting loans. The charter for the agency expires in September, so Congress has a long time to debate whether or not it should be reinstated, reformed, or dissolved. However the largest industrial machinery companies—arguably the biggest beneficiaries of the system, are warily watching the debate. We built a list of the six largest industrial machinery stocks by market cap. Depending on how much of their business is conducted overseas, the desolution of the Ex-Im bank could make it much harder for them to find willing buyers. Do you think Congress will act to save the Ex-Im bank, or will companies have to adapt to using the private market? Use the list below to begin your analysis, and let us know what you think in the comments.
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