GM bailout. US reports $9.7 LOSS

[waggy]

http://www.nbcnews.com/business/u-s-reports-9-7-billion-loss-general-motors-bailout-8C11490659

DETROIT — The U.S. government has booked a loss of $9.7 billion on the nearly $50 billion bailout of U.S. automaker General Motors Co., according to a quarterly report to Congress on Tuesday.


/snip


lol oops. that's not good

 

[Jaskalas]

$9 billion story over our $17,000 billion debt. :hmm:

Small potatoes I'm thinking, aside from the picking of winners and losers. GM is a winner because some politicians chose to bail them out. How are investors supposed to react when the "free" market is managed in the halls of Congress?

Yet they didn't chose to bailout every home owner, and many people were foreclosed on. Why did GM get those billions and not the "little" people who lost their homes? If our leaders lived among us plebs they might feel differently about when and where to intervene. Maybe fewer people would have been hurt in this economy.

Lord knows, our $17t debt could have bought and paid for every single home in America. That sort of security is priceless. If you're going to burn currency, there are far better ways to do it.

 

[shira]

From the story:

Treasury owns 101.3 million GM shares as of Sept. 26, the most recent date available.

GM is today at about 36. That's another $3.6 billion. So the final loss won't be quite as bad as stated in the OP.

 

[mshan]

Morningstar estimates GM stock is worth $56 / share:

Morningstar's Stock Analysis of GM:

Fair Value Estimate $56


Consider Buy $33.60

Consider Sell $86.80

But there was alot of pressure for government to sell it's stake (from GM management and others).

Same thing with bailed out banks. Government can only break even, at best, then all of the easy gains from there, accrete to private shareholders who took none of the risk during 2008 / 2009.






Private the gains, socialize the losses...

"All totaled, the damage comes to $6 trillion to $14 trillion, a staggering number that nearly equates to an entire year of gross domestic product.

Broken down, that translates to $50,000 to $120,000 for every U.S. household "or the equivalent of 40 to 90 percent of one year's economic output," the paper said.

And it could be worse—a lot worse—depending on how long it takes for a full recovery to set in.

"If the effects of the crisis are permanent, the path of consumption observed since 2007 suggests that the cost of the crisis may be more than double the $6 trillion to $14 trillion estimate," the paper said.


http://www.cnbc.com/id/101022718

http://londonbanker.blogspot.com/2008/10/financial-eugenics-paulson-plan-for.html

 

[Doppel]

Seize Goldman Sachs et al to cover the difference, then break those companies up and throw all their employees into the ocean somewhere then everyone wins.

 

[tgferg67]

I'm not sure if using zero losses is a proper reference. Unemployment insurance and loss of tax base would have been part of an alternative scenario.