GM, New Math, and You (US & Canada Taxpayers)

[ArthurPE]

I didn't make a misstatement. The gov't gave the car companies the money. Sure, they got equity, but big deal... It's basically worthless. Neither company has a positive outlook.

Oddly enough, the CBO doesn't agree with you. The CBO and the OMB estimate the gov't will lose between $31-34 billion on the TARP money given to the car companies. link

if you get something in return, it's not 'giving', it's a transaction...
people are buying and trading GM stock daily, so it's worth something...

again, they did not give it to them, they bought stock shares...
HUGE difference

those figures only detail outlays/expenditures, it does NOT factor profit, dividends or sale of the stock...
which will at least recoup the $$$, and most likely make a profit...
and that is for all the companies including suppliers...
again, misleading

...on April 21, 2010, GM CEO Ed Whitacre Jr. announced that the company had paid back the entire amount of the U.S. and Canadian government loans, with interest, a total of $8.1 billion. The government still has $2.1 billion invested in preferred shares that pay dividends, plus a 61% share of common equity valued at about $45 billion to the U.S.

In a national TV advertisement which appeared in the U.S. in April 2010, chairman and CEO Ed Whitacre talks about the company repaying loans from government in full, with interest, five years ahead of the original schedule. There are congressmen call that a "lie to the American people". At issue is the money for the loan repayment came from other bailout funds housed in an escrow account belonging to the company, that smacks of deception to critics.

as the report states, when all is said and done the gov will have ~47 bil invested, and will hold 61% of equity (45 bil) and 2.1 bil of prefered stock...they will have 'given' them nothing, not a cent...

only time will tell

but this is one of those topics that people jump on...
damn government!!!! socialists are stealin' our liberty!!!
<div style="float: left; margin-right: 10px;"><embed src="http://media.entertonement.com/embed/OpenEntPlayer.swf" id="1_c22be364_5593_11df_b410_0019b9b841a0" name="1_c22be364_5593_11df_b410_0019b9b841a0" flashvars="auto_play=false&clip_pid=kmjzclhjmd&e=&id=1_c22be364_5593_11df_b410_0019b9b841a0&skin_pid=wfxswdnlkf" width="300" height="30" type="application/x-shockwave-flash" pluginspage="http://www.macromedia.com/go/getflashplayer" allowscriptaccess="always" wmode="transparent"></embed><div id="1_c22be364_5593_11df_b410_0019b9b841a0_anchor" style="font-size: 8px; color: black; text-decoration: none; display: block; text-align: center;">They took our jobs!! sound bite</div><img alt="They took our jobs!! sound bite" border="0" height="0" src="http://www.entertonement.com/widgets/img/clip/kmjzclhjmd/1/1_c22be364_5593_11df_b410_0019b9b841a0/blank.gif" style="visibility: hidden; width: 0px; height: 0px; margin:0; padding:0; float:right" width="0" /></div>
yet >900 bil in Iraq, many, many dead, 10,000+ US crippled & maimed, both physically & mentally...
long term costs: healthcare, debt, pensions, etc., as high as 2 trillion...
and it is no different, some say worse, than it was 7 years ago...

compared to this, GM is a stellar investment...

 

[Stereodude]

You're going to need better a lot better bait than that if you really want to get someone to bite.

Personally, I think I'm going to put the ol' ignore list to good use.

 

[ArthurPE]

You're going to need better a lot better bait than that if you really want to get someone to bite.

Personally, I think I'm going to put the ol' ignore list to good use.

those are FACTS, but I could see how you would choose to ignore that...
they did not 'give' them money, they 'bought' equity/stock
the $$$ they 'gave' (most people term it 'loan') was repaid...
although the total outlay may approach 50 mil, they will sell the stock and possibly reap dividends, so the NET cost will be ~0...

you can ignore my posts, but there is no 'ignore button' for reality

I'm not sure what you expected:
you post misinformation, slanted and one sided with obvious bias
someone tries to show the other side
you choose to 'ignore' it
????

 

[tonygeno]

those are FACTS, but I could see how you would choose to ignore that...
they did not 'give' them money, they 'bought' equity/stock
the $$$ they 'gave' (most people term it 'loan') was repaid...
although the total outlay may approach 50 mil, they will sell the stock and possibly reap dividends, so the NET cost will be ~0...

you can ignore my posts, but there is no 'ignore button' for reality

I'm not sure what you expected:
you post misinformation, slanted and one sided with obvious bias
someone tries to show the other side
you choose to 'ignore' it
????

Since when have facts gotten in the way of an anti-government/Obama rant?

 

[ArthurPE]

Since when have facts gotten in the way of an anti-government/Obama rant?

lol!

 

[Chu Gai]

I didn't make a misstatement. The gov't gave the car companies the money. Sure, they got equity, but big deal... It's basically worthless. Neither company has a positive outlook.

Oddly enough, the CBO doesn't agree with you. The CBO and the OMB estimate the gov't will lose between $31-34 billion on the TARP money given to the car companies. link

Yes, but if some time in the future, the CBO revises this to losses of 11-14 billion, the gov't can say they made a profit of 20 billion.

 

[Stereodude]

those are FACTS, but I could see how you would choose to ignore that...
they did not 'give' them money, they 'bought' equity/stock
the $$$ they 'gave' (most people term it 'loan') was repaid...
although the total outlay may approach 50 mil, they will sell the stock and possibly reap dividends, so the NET cost will be ~0...

The only person here ignoring reality is you. If I pay $100k for a used car worth $1k, I would have given the seller $100k, because I certainly didn't buy a car for $100k. But, using your new math I would have simply bought it for $100k (not given away $100k) because I could sell the car and possibly reap dividends.

you can ignore my posts, but there is no 'ignore button' for reality

You seem to have found one.

I'm not sure what you expected:
you post misinformation, slanted and one sided with obvious bias
someone tries to show the other side
you choose to 'ignore' it
????

I didn't post misinformation. I posted facts. You're the one trying to claim the gov't made some shrewd investment by flushing money down the GM and Chrysler toilet.

Then you're trolling trying to draw some equivalence by ranting about the Iraq war, military-industrial complex, and the defense industry hoping to sucker someone into a discussion with you about them.

 

[Stereodude]

Yes, but if some time in the future, the CBO revises this to losses of 11-14 billion, the gov't can say they made a profit of 20 billion.

Sarbanes–Oxley to the rescue!

 

[Rickster71]

Boy, that is interesting. Most of the public would not dig this stuff up. What a bunch of dirt bags they are.

Who's the dirt bag; GM, or our government for being in bed with them.

 

[ArthurPE]

The only person here ignoring reality is you. If I pay $100k for a used car worth $1k, I would have given the seller $100k, because I certainly didn't buy a car for $100k. But, using your new math I would have simply bought it for $100k (not given away $100k) because I could sell the car and possibly reap dividends.

I didn't post misinformation. I posted facts. You're the one trying to claim the gov't made some shrewd investment by flushing money down the GM and Chrysler toilet.

Then you're trolling trying to draw some equivalence by ranting about the Iraq war, military-industrial complex, and the defense industry hoping to sucker someone into a discussion with you about them.

fact:
you said the gov 'gave' GM money: patently false
they loaned them $$$ which was repaid
they BOUGHT stock

you posted slanted and misleading information laced with hyperbole in a not so subtle attack at the powers that be...that is fair, what is not fair is not acknowledging you are wrong, you can have your opinion, but not your own 'facts'...

you are ignoring reality AND the facts, they acually paid less than the going rate at the time, not more, although the stock has fallen since then...
but 50 bil (loan, escrow and backing) got them 60% of a company with annual rev of 150 to 200 bil, that is a bargin in anyones book...
again, only time will tell

yes, people have paid small money for a clunker muscle car, that later sold for 10 times as much, as I said, only time will tell
they may lose a little, make a little (maybe a lot) or most likely break even

the war & defense complex comparison is valid:
we spent 2 trillion on it with no benefit for Americans
but that was bush's perogative as president

we support the defense industry with unecessary spending, a healthy % of which is wasted: to keep jobs, the sole reason at times, again, fair play...

but this won't cost 2 trillion + many lives
it's a sound investment in America and saved many jobs...
that is directly comparable to the war & defense spending...
a 'waste' of tax money for reasons not agreed upon by all...

if you don't like it, cool, but you can't make up false stuff to fit your arguement and position...

 

[highfigh]

Dont get me wrong I don't think any of this is "right" but we have no one to blame but ourselves. This isn't the only example, but its probably the biggest example that doesn't affect you so you are outraged. This is similar to what the average consumer does with their credit card debit, they shift and move it around in hopes of getting lower rates (and most of the time all it does is get them in trouble).

This is no different than the housing market, how many home owners bought homes they couldn't afford and have since been bailed out by government assistance and re-fis? The home owner got one loan, higher rate then couldn't afford it and now has a lower rate and tax incentives to help them.

The problem is people are not responsible and greedy (by people i'm not point my finger at you, I am generalizing). When the average person is in debt thats more because of the decisions they have made (no one forced them to buy that new car, house, clothes, shoes, etc.) rather than a bank, auto maker, or any business. They certainly didnt help by making it easier on them to do so, but no one forced them to do it.

Its amazing to me how many people think they "have" to have a cell phone, cable tv, internet, NEW car, etc. When they complain, I have no sympathy for them when I see the possessions they have.

Its more frustrating to me to watch individuals get bailed out after bad decisions and be better off for it, when I make sacrifices and sound judgement and get nothing for it. At least with the major businesses by bailing them out they are helping a large group of people (who may or may not be responsible).

I would have to disagree that we're to blame. We vote for members of Congress, often because "they're not too bad" and when new meat shows up, we have no choice but to base our decisions on their past history and what they, or others, tell us. Unfortunately, this has become an easy way to be scammed by them and others, culminating on the decision to elect a President with no experience in the private sector, a dubious life history and thoughts that he can transform a nation of 300M+ in a short time when we have historically been "somewhat resistant to change".

We're a lot like Flounder, in 'Animal House', when he let the guys from Delta House drive his brothers' Lincoln Continental. When he saw it after it was basically totaled, he said, "You told me it would be safe! You said it would be OK!" and D-Day's response was 'Hey! You f&cked up! You trusted us!".

One of the worst things about this whole mess is that tens of millions just couldn't bother to pay attention to what has been happening over the last 80 years after government started giving to people who didn't necessarily deserve anything. I have no problem with helping people who can't do for themselves but I have a major problem with helping those who won't do for themselves. People who don't see the benefits of staying in school will almost never be able to see the big picture and how they'll be left in the dust by everyone else. Governments that want to stay in office/power love people like them because as soon as that government gives them what they need and make it hard to want to improve themselves, they're hooked. As soon as they become dependent on government for their survival, they're slaves. They may not want to be in their position but they have very little power to get out of it.

Those who voted for this gang of thieves are at fault, not those who warned against it.

 

[highfigh]

if you get something in return, it's not 'giving', it's a transaction...
people are buying and trading GM stock daily, so it's worth something...

again, they did not give it to them, they bought stock shares...
HUGE difference

How much dividend income will be appropriated by the government/Congress for pet projects? I'm sure it will never be used to service any debt. Is the US government going to tell us when they sell that stock at a profit? Highly unlikely. Will they allow the market to dictate the stock price or will they control it, as I suspect? If they let the market decide, they'll be hypocrites. If they control it, they will have caused the destruction of the free-market economy.

IMO.

 

[Stereodude]

fact:
you said the gov 'gave' GM money: patently false
they loaned them $$$ which was repaid
they BOUGHT stock

I knew reading comprehension wasn't your strong point. Lets review...

• US gives GM $49.5 billion to finance it's bankruptcy in exchange for 60.8% equity of the company
• Canada gives GM $8.1 billion to finance it's bankruptcy in exchange for 11.7% equity in the company

I explicitly mention the equity they were given in exchange for their monetary gift in the very first post.

You want to call it buying stock, which is absurd. If they wanted to buy stock and own the company they could have bought the company outright from the stock holders for a fraction of the cost before GM declared bankruptcy, but instead all those people took a bath when GM declared bankruptcy and the stock became worthless.

 

[Stereodude]

Who's the dirt bag; GM, or our government for being in bed with them.

*raises hand*

Both!

 

[son-yah-tive]

Have you driven a Ford lately?

Yes, two Mustangs. And are we positive BERNIE is still behind bars? Or, just working for GM, on the other side them.

 

[ArthurPE]

How much dividend income will be appropriated by the government/Congress for pet projects? I'm sure it will never be used to service any debt. Is the US government going to tell us when they sell that stock at a profit? Highly unlikely. Will they allow the market to dictate the stock price or will they control it, as I suspect? If they let the market decide, they'll be hypocrites. If they control it, they will have caused the destruction of the free-market economy.

IMO.

will we see a reduction in taxes due to a possible profit associated with the GM deal? no, have we ever? The gov taketh, it seldom if ever, giveth...
will spending increase to consume any possible profit? yes, always does...

will they tell us? probably, good PR and 'I told you so' factor...
if they don't it will be on the books for all to inspect, if you're willing to dig...

I would hope they use their majority share to 'control' it, ie, force GM to make the right decisions to realize a profit, ergo, higher stock value...ANY investor in that position would do the same...

that's a bit dramatic, the end of the free-market system as we know, don't you think?
they control the defense industry
the railroads/Amtrack (btw, the same was said when they took it over)

perhaps the free-market system needs revamped, the days of robber-barons and industrialists like Mellon, et all, are over...it's a global economy (and we are having our asses handed to us wrapped with a bow), all other countries 'support' their industries...and we do the same
breaks for oil companies, in fact we 'war' for them
the total support of the defense industries
taking over pensions for steel & coal
subsidies & tax credits for power generation
etc.

why is this any different?

 

[ArthurPE]

I knew reading comprehension wasn't your strong point. Lets review...

I explicitly mention the equity they were given in exchange for their monetary gift in the very first post.

You want to call it buying stock, which is absurd. If they wanted to buy stock and own the company they could have bought the company outright from the stock holders for a fraction of the cost before GM declared bankruptcy, but instead all those people took a bath when GM declared bankruptcy and the stock became worthless.

it would seem it is you who is grammatically challenged, not to mention logically...
but enough with the 2nd grader insults and presonal attacks...

I don't want to 'call' it buying stock...it IS buying stock...???
it wasn't a 'gift', it was a 'payment'...
there you go again, all hyperbole, all fictional, all intentionally misleading for your crazy conspiracy therories...
' da guvernment is goin' to git us!!!! '

no they couldn't have, they bought it at less than market value at the time...
if they hadn't 'rescued' it at that time, it would have ceased to exist, it would have been valueless...
investors would have lost, the economy would have tanked more, x00,000's would have lost jobs, snowballing into a much bigger issue...but I wouldn't expect you to understand this, blinders and hate are not conducive to open minded, insightful or forward thinking patterns...
private investors rescue companies all the time, it's the best way to get good deal, as was the case here...

they got 60% of a company with 150-200 bil in revenue for 13 bil (7 spent so far), the balance is untouched/untapped guarantees/options...

again, either you do not undertsand what actually transpsired, or you distort for your own (not so hidden) agenda...


US PAYS GM $49.5 billion to finance it's bankruptcy TO BUY 60.8% equity of the company
Canada PAYS GM $8.1 billion to finance it's bankruptcy TO BUY 11.7% equity in the company

FIXED
but that doesn't suit your agenda, now does it?

 

[Stereodude]

US PAYS GM $49.5 billion to finance it's bankruptcy TO BUY 60.8% equity of the company
Canada PAYS GM $8.1 billion to finance it's bankruptcy TO BUY 11.7% equity in the company

FIXED
but that doesn't suit your agenda, now does it?

US DRASTICALLY OVERPAYS GM $49.5 billion to finance it's bankruptcy TO BUY 60.8% equity of the company
Canada DRASTICALLY OVERPAYS GM $8.1 billion to finance it's bankruptcy TO BUY 11.7% equity in the company

FIXED
but that doesn't suit your agenda, now does it?

 

[mtrycrafts]

the gov has sustained the defense industry since the 50's, it's >1/2 the budget...$500 toilet seats, helo/planes that crash, planes that don't fly...research on BS projects...untold trillions + the associated debt...

...

Didn't what's his name warned us about the industrial complex? Oh, Eisenhower.

Dont get me wrong I don't think any of this is "right" but we have no one to blame but ourselves. This isn't the only example, but its probably the biggest example that doesn't affect you so you are outraged. This is similar to what the average consumer does with their credit card debit, they shift and move it around in hopes of getting lower rates (and most of the time all it does is get them in trouble).

....

Yes, some do this with their own accounts but I doubt they are bragging that they payed off their credit and now have none.

 

[mtrycrafts]

...Sign me up!

Me too. Once I am dead, not worries