For US To Recover Its Investment, GM Stock Would Have To Hit Record Levels

Washington Post:

If a new General Motors emerges from bankruptcy as planned, U.S. financial aid for the company will expand to nearly $50 billion, but neither the government nor the company is forecasting how much of the public money will be repaid.

Read the whole story: Washington Post

Comments

[nomorefed]

People now are getting paid the SAME WAGES as they did in 2000. But are prices at 2000
levels? H3LL NO. So they go into debt, adding more layers tothe USA debt ponzi scheme.

good finance articles: http://heavysidetrade.blogspot.com/

[loki]

I know, let the oil speculators handle gm stock. Then it will be worth thousands a share in a week!! Just look at what they are doing to oil right now. Sure, they are moving a little more cautious than pre-collapse, but they are back to their old tricks. The greatest thing for them is that Obama , not having direct ties to oil corporations like Bush Cheney did, isnt obligated to try to slow the rising cost to the consumer.

[econ1]

Did anyone really think that the government would get back a significant part of the money it blew on GM?

Government instead of pouring billions into productive, successful companies to make them stronger (or just taxing them less) pours billions into two of the worst companies.­..brillian­t.

This is after pouring billions into ethanol.

Now the government is going to pick the winners (losers?) in the energy industry through cap (the winners) and trade (our economy away).

[smchp]

The house was on fire. The people were screaming "help, the house is on fire, save my children". The firefighters ran in and saved the children. Now you want to accuse the firefighters of kidnapping!

[jalowe1957]

I'm about to plop down another $10 or so in GM stock via my ShareBuilder account.

With its stock hovering around a buck and a quarter a share, a little speculation wouldn't hurt my waistline.

[JuliusR]

After bankruptcy current GM shares are worthless. Just send me your 10 bucks and call me GM.

[JuliusR]

Between 2000 and 2008, the United Auto Workers (UAW) union gave
$23,675,562
to the Democratic Party
and its candidates.

In 2008 alone, the UAW gave $4,161,567 to the Democratic Party,
including
Barack Obama.

In return, the UAW received 55 percent of Chrysler and 17.5 percent of
GM,
plus billions of
dollars.

But nobody's calling this a scandal. It's time we start.

[Mikeeee]

Fail.

[blimie]

It was so shocking when they said the union was getting a percentage of GM. That is insane.

[DonCosenza]

Did you consider the amount of money that Chrysler and GM owe the UAW for pension and health care benefits? That's why they got these stakes in the companies (through a trust that UAW does not directly control, I might add)- they are massive creditors.

[JuliusR]

No. That was between the auto companies and the UAW. NOT the public purse.

[grateful4thedead]

gov't motors is doomed to, at best, mediocrity. at worst, they will never make it. there simply is not enough money.

[sc300nc]

GM is doomed. They may stay in business but will never again be a major player in the automotive industry. They sold their souls for gov't money, and the gov't will be their demise. I will never buy another GM product. I will be a strong FORD supporter. They will have a disadvantage competing against ObamaMotors but will come out on top. Support FORD!

[DonCosenza]

You realize that Ford has also received considerable government money too, right?

[sc300nc]

Nowhere near what GM and Chrylser has gotten. Not even in the same ballpark.

[Sundialsvc4]

You want the price of GM to skyrocket to the moon, long enough to cash out? Why, consider it done.

We all make lots of money. We dump all those union workers, close plants, make insane profits for ourselves (and oh yes, most certainly for you too, Senator... don't worry your pretty little head about that...) and ... well, that's it, isn't it?

What? Them? Well, if they are about to die then they had better do it, and rid the world of the surplus population.

[buckeyedave]

Spending money to save jobs, does not save jobs in the long run, it wastes money.

[ntmessage]

Who expects GM or any of the non-bank financial institutions to make money for the taxpayer? Anyone with that expectation was a victim of the rhetoric. That money was a giveaway. We skewered the banks, which will pay us back, and with interest. Then we slipped in lost causes on the taxpayer’s back, with money that will be gone, at least for a real, long time and almost no chance of recovery.

Next, if we do not keep the overall cost of healthcare within 7-8% of GDP and cover everyone, (that includes out of pocket, etc – all in), and feel there will be health care reform, we will again be the victim of the rhetoric and left holding the bag. Only this time, our economy will not just get to the brink, it will in fact collapse.

[Chicago1771]

Obama Motors. What I don't like about this is that GM was bailed out because of the UAW. The UAW helped get Obama elected and that is the only reason we pumped so much money into this worthless company.

[DonCosenza]

Out of curiosity, which investment bankers' union was it that Obama is beholden to for the bank bailouts?

[smchp]

ahhhhhh, those pesky history re-write memory demons. You remember who started the GM bailout don't you. Let me give you a hint, "I'm the decider".

[Earl]

Don't worry, inflation is our friend.

[Dolphinsfan592]

Obama/Bush threw this on our backs whether we like it or not. Were screwed.

[tomasedison]

GM has been a rolling trainwreck since the early 1970's. The blight finally had to be cleaned up, the various enablers - lawyers,lawmakers and corporate types were all too willing to stand by and profit from the nevver-ending death knell.

[DonCosenza]

The Washington Post's calculations leave out a few factors. If GM had been liquidated, all of its employees would be out of work. They would have been collecting unemployment until that ran out or they found new jobs. After that, if they didn't have a job, many of them would receiving other government spending (welfare, medicaid, etc.) at both a federal and state level.

By keeping at least a subset of the workers employed, the government (local, state and federal) will continue receiving tax revenue from these individuals, and have to pay out less in social services.

So, the government, unlike a private equity firm, has an additional incentive to seeing GM survive, eventually (one hopes) on its own, even if the government takes a loss on its actual equity stake. In fact, I hope the government doesn't make money on its equity stake, because the government should not be in the business of trying to generate revenue from investing in private industry.

[buckeyedave]

If we had ham, we'd have ham 'n eggs, if we had eggs.