US Gov't loses $14 billion from auto bailout

[SoonerNate]

http://news.yahoo.com/s/ap/20110601/ap_on_re_us/us_obama_autos_2

and the beat goes on...


The Obama administration said Wednesday that the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry.

SErowaB4nUY

[StoopTroup]

And yet the day is saved and we are still not bankrupt.

[Sooner5030]

nothing was saved....we just delayed the inevitable......we've been doing it for a long time now. no one knows when the house of cards will fall.......but the numbers have been getting really scary the last 6 years. Not one year of positive GDP growth if you net out the nominal deficits.

[StoopTroup]

We?

How many jobs were saved?

[Mongo]

at least JohnnyMack had the sense to stop fellating Obama. You should too ST

[SoCaliSooner]

And yet the day is saved and we are still not bankrupt.

Yes. The housing market didn't collapse either on the day that the loan process was de-regulated.

[StoopTroup]

at least JohnnyMack had the sense to stop fellating Obama. You should too ST

If I'm fellating him....you must be butt-****ing the **** out of him....lol

[Mongo]

If I'm fellating him....you must be butt-****ing the **** out of him....lol

you make no god damn sense

[StoopTroup]

you make no god damn sense

Well....at least you are on the same level with me.

[SoCaliSooner]

If I'm fellating him....you must be butt-****ing the **** out of him....lol
http://roxpile.com/files/2011/04/brick-tamland.jpg

[StoopTroup]

Are you two in danger of losing your welfare checks? Is this what this latest round of attacks are?

[Chuck Bao]

That article is very poor, Nate. It doesn't explain exactly how the US federal government lost the $14bn. I haven't had time to search for a better explanation of the loss and I am damn curious.

[Blue]

They'll just start taxing you by the mile to make it up. No, not cut spending, but tax more. Yeah thats the ticket.

http://autos.aol.com/article/tax-per-mile/?icid=maing-grid7%7Cmain5%7Cdl7%7Csec1_lnk2%7C67486

[Sooner5030]

chuck......you'll have to wait for the last SIGTARP report for a final verdict. In total.....expected losses on TARP will be between $48-75 billion (nominal) depending on which way you like to estimate bad debt. Even if they all paid back 100% of original amount with warrants the taxpayer would get paid back 80% of value when comparing what those FRNs purchased in 2008 versus today.

http://www.sigtarp.gov/reports/congress/2011/April2011_Quarterly_Report_to_Congress.pdf

note: yes I know TARP includes alot of other shiat besides the auto shiat

[soonercruiser]

And yet the day is saved and we are still not bankrupt.

WE, the Republic, the citizens are going bankrupt!

Maybe Chrysler & GM aren't going bankrupt......at our expense...
But we are!

[SoCaliSooner]

We are getting the double dip already...plus with that stimulus, we're further in debt too.

[StoopTroup]

A 14 year Depression would be so much better.

[Blue]

A 14 year Depression would be so much better.

You'll still get it eventually.

[StoopTroup]

You'll still get it eventually.

Your optimism in the Republican Party is amazing.

[SoCaliSooner]

Are you two in danger of losing your welfare checks? Is this what this latest round of attacks are?

I just got a temporary disability check today, about 77% of my regular pay but without being taxed.

Thank you Obama Jesus....

[StoopTroup]

I just got a temporary disability check today, about 70% of my regular pay but without being taxed.

Thank you Obama Jesus....
Wouldn't that be from the State of California?

[SoCaliSooner]

Wouldn't that be from the State of California?

Negative. From our private work comp company, besides, I am a Los Angeles county employee...not a state employee.

[StoopTroup]

So it wasn't Obama Jesus unless you were working for a Government Funded Work program?

[SoCaliSooner]

So it wasn't Obama Jesus unless you were working for a Government Funded Work program?

I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage… If I help Obama he’s gonna help me.

[StoopTroup]

I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage… If I help Obama he’s gonna help me.

I sent him a nasty letter the other day about the patriot Act. I'm surprised my hOUse hasn't been searched.

[OutlandTrophy]

That article is very poor, Nate. It doesn't explain exactly how the US federal government lost the $14bn. I haven't had time to search for a better explanation of the loss and I am damn curious.

It's my understanding that the loss occured because we invested x amount of dollars in new gm stock and we sold after the stock dropped in value to the tune of 14 billion dollars.

[Chuck Bao]

It's my understanding that the loss occured because we invested x amount of dollars in new gm stock and we sold after the stock dropped in value to the tune of 14 billion dollars.

Thanks OT. I now see this from Wikipedia.


GM was listed on the New York Stock Exchange and the Toronto Stock Exchange again on November 18, 2010 following a $33/share initial public offering of $23 billion, including preferred shares. The shareholding by the Treasury department was reduced from about 61% to about 33%, including preferred shares... Disposal of such shares gave the Treasury department about $13.6 billion in proceeds. It was previously estimated that the Treasury had to sell GM shares at an average of $43.67/share to break even.

GM shares are currently trading at $29.67.

I guess the question should be why the Treasury department bought in at such a high price. I know that it was a confidence game at that time, but, in my opinion, no consideration should have been made to protect the old shareholders.

[OutlandTrophy]

because it wasn't their money

[pphilfran]

The old shareholders got killed, old shareholders are now using stock certificates as toilet paper... and the old bond holders got screwed...

I don't know about buying in....the fed gave em a trunk full of money and in exchange the New GM gave the fed a box full of stock...

[olevetonahill]

at least JohnnyMack had the sense to stop fellating Obama. You should too ST

Since when has JM ever had any common sense?:confused:

[Chuck Bao]

The old shareholders got killed, old shareholders are now using stock certificates as toilet paper... and the old bond holders got screwed...

I don't know about buying in....the fed gave em a trunk full of money and in exchange the New GM gave the fed a box full of stock...

In my opinion, the old shareholders and bond holders should have already had plenty of toilet paper before the Treasury department bailout. Like the banking sector, there should be no "moral hazard" regarding "too big to fail". It is a tough life out there, so poor rich people should have to deal with it, as well.

The other thing that bothers me is that posters on this board picking up the right-wing slanted media and saying that GM stands for Government Motors and this is just another sign that President Obama intends to create a socialist or communist state.

The Treasury department did the right thing in selling off part of its holdings and re-listing the stock after it re-emerged from Chapter 11. They should have bought in cheaper or got more than a 66% stake for bailing GM out. I can just imagine how many people would have been howling about communism at that time, though. Politics and financial markets do not mix well together.

I am just more than a bit angry about it all. And, I hope there is an investigation.

[pphilfran]

In my opinion, the old shareholders and bond holders should have already had plenty of toilet paper before the Treasury department bailout. Like the banking sector, there should be no "moral hazard" regarding "too big to fail". It is a tough life out there, so poor rich people should have to deal with it, as well.

The other thing that bothers me is that posters on this board picking up the right-wing slanted media and saying that GM stands for Government Motors and this is just another sign that President Obama intends to create a socialist or communist state.

The Treasury department did the right thing in selling off part of its holdings and re-listing the stock after it re-emerged from Chapter 11. They should have bought in cheaper or got more than a 66% stake for bailing GM out. I can just imagine how many people would have been howling about communism at that time, though. Politics and financial markets do not mix well together.

I am just more than a bit angry about it all. And, I hope there is an investigation.

This won't be exactly right but it should be close...

The fed gave GM x amount of money...GM was going to issue y amount of shares...and those new shared got divided up...fed got a %....union got %...not sure who else....

The number of shares offered times the listing price gave the capitalization cost...the fed share did not equal the amount of money loaned...the company wasn't worth enough to pay off everybody so the fed essentially paid more per share....

In most any other BK the bond holders would be at the front of the line...but not in this case...their positions got them zilch...they got screwed while the union and the fed pulled in some buck....

Anybody with any sense knew GM was going under in late 2008...the promise of a buyout delayed the BK and caused GM to burn through all available cash...now it is nut cutting time with no time to waste...so they put together a pizz ant plan to pay back the union backers and screw over the loyal bondholders...

Force the BK in late 2008 and once the liabilities were reduced there would have been enough cash on hand to keep afloat...the stockholders would still be dead meat but the bondholders would have gotten something in return...

[Chuck Bao]

This won't be exactly right but it should be close...

The fed gave GM x amount of money...GM was going to issue y amount of shares...and those new shared got divided up...fed got a %....union got %...not sure who else....

The number of shares offered times the listing price gave the capitalization cost...the fed share did not equal the amount of money loaned...the company wasn't worth enough to pay off everybody so the fed essentially paid more per share....

In most any other BK the bond holders would be at the front of the line...but not in this case...their positions got them zilch...they got screwed while the union and the fed pulled in some buck....

Anybody with any sense knew GM was going under in late 2008...the promise of a buyout delayed the BK and caused GM to burn through all available cash...now it is nut cutting time with no time to waste...so they put together a pizz ant plan to pay back the union backers and screw over the loyal bondholders...

Force the BK in late 2008 and once the liabilities were reduced there would have been enough cash on hand to keep afloat...the stockholders would still be dead meat but the bondholders would have gotten something in return...

Thanks for that, pphilfran, and spek.

Wow! It was definitely not the US Treasury department's finest moment. Those ivy league graduates probably need more savvy financial advisors or they need to completely take politics out of their market transactions. I learned a long time ago that smart people tend to make the stupidest mistakes.

The only "aha" feeling I got out of your post is that the GM unions lost proportionally as much as the government.

[soonercoop1]

nothing was saved....we just delayed the inevitable......we've been doing it for a long time now. no one knows when the house of cards will fall.......but the numbers have been getting really scary the last 6 years. Not one year of positive GDP growth if you net out the nominal deficits.

agreed as the union contracts are still in place...nothing changed except the tax paying citizen got f'd by the Feds once again...

[Breadburner]

I think Canada recieved some as well....

[pphilfran]

I think Canada recieved some as well....

Yep....Canada tossed in about 10 billion for a 12% stake...

The US gave 50 billion and controls about 60%...

Today's market cap for GM....44.4 billion...share price of 29.60 with 1.5 billion shares outstanding

[jkjsooner]

The problem I have with these types of statements is that some people look at this and think, "Damn, we blew $700 billion on the bailout and now we lost $14 billion more."

They don't realize is that much of that $700 billion has been paid back. This only represents a part that will not be paid back.

[SoCaliSooner]

They don't realize is that much of that $700 billion has been paid back. This only represents a part that will not be paid back.

Any proof of that? I keep reading about fraud and money sent to contractors who haven't paid taxes. I guess we're not in debt now.

[jkjsooner]

Any proof of that? I keep reading about fraud and money sent to contractors who haven't paid taxes. I guess we're not in debt now.

From wikipedia for TARP 1. Take it for what it's worth.



Originally expected to cost the U.S. taxpayers as much as $300 billion,[1] by December 16, 2010 the Congressional Budget Office (CBO) estimated the total cost would be $25 billion,[2] although Treasury Secretary Timothy Geithner argued that the final cost would be still lower. [3] This is significantly less than the taxpayers' cost of the savings and loan crisis of the late 1980s. The cost of that crisis amounted to 3.2% of GDP during the Reagan/Bush era, while the GDP percentage of the current crisis' cost is estimated at less than 1%.[4] While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.[5] Of the $245 billion invested in U.S. banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered "on track" to pay back $51 billion from divestitures of two units and another $32 billion in securities.[4] In March 2010, GM repaid more than $2 billion to the U.S. and Canadian governments and on April 21 GM announced the entire loan portion of the U.S. and Canadian governments' investments had been paid back in full, with interest, for a total of $8.1 billion

I'm sure there is plenty of fraud. What I am saying is that I believe there are plenty of people who want to spin this as additional losses or at least leave their viewers/listeners to make this assumption.

[SoCaliSooner]

So..all tallied 179 bil...out of 787 bil.

That's not "much" of the stimulus being paid back. For some perspective, California's entire debt issue and shortage is less than 20 bil.

[jkjsooner]

So..all tallied 179 bil...out of 787 bil.

That's not "much" of the stimulus being paid back. For some perspective, California's entire debt issue and shortage is less than 20 bil.


I don't think those numbers are complete. We have 169 of 245 paid back from the banks. I don't know where the money went and who owes what so I can't say. I'm guessing we still have a lot of outstanding equity, etc.

The CBO estimates a loss of $25 billion. That gives you an idea of where we stand.

I recognize the auto bailouts were not part of TARP but they all get lumped in together when people talk about them. That's especially true for the idiots who like to blame Obama for TARP 1.

[SoCaliSooner]

I don't think those numbers are complete. We have 169 of 245 paid back from the banks. I don't know where the money went and who owes what so I can't say. I'm guessing we still have a lot of outstanding equity, etc.

The CBO estimates a loss of $25 billion. That gives you an idea of where we stand.

I recognize the auto bailouts were not part of TARP but they all get lumped in together when people talk about them. That's especially true for the idiots who like to blame Obama for TARP 1.

I get it now, you are correct. We're talking about TARP 1 under Bush. Yes, most of TARP 1 is being paid back.

The 787 billion is a different animal completely.

[diverdog]

I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage… If I help Obama he’s gonna help me.

Actually you might have to worry. If the economy goes in the chitter and the internal investments made by the insurer tank you could be SOL. I hope that does not happen but then again no one expected AIG to tank.

[diverdog]

I don't think those numbers are complete. We have 169 of 245 paid back from the banks. I don't know where the money went and who owes what so I can't say. I'm guessing we still have a lot of outstanding equity, etc.

The CBO estimates a loss of $25 billion. That gives you an idea of where we stand.

I recognize the auto bailouts were not part of TARP but they all get lumped in together when people talk about them. That's especially true for the idiots who like to blame Obama for TARP 1.

If we get out of this losing $25 billion then that is cheap and a very good deal for the American people.

[sappstuf]

If we get out of this losing $25 billion then that is cheap and a very good deal for the American people.

But not what Obama promised...

Kihs79qeZz4&

[Sooner5030]

stop talking nominal $ and stop linking f'ing wikipedia. You get everything you want from SIGTARP reports. Just take the time to read them plz...thnx

we loaned out x(wheat/gold/silver/land/corn/cotton) and would only be paid back .7x if every f'ing FRN was repaid with warrants included. TARP also doesn't account for the $1 trillion of toxic MBS that the FED took on it's balance sheet in exchange for digital FRNs back to the shiaty banks that loaned them out or purchased the loans.

bad decisions were made by lots of institutions but the effects of those decisions were felt by the taxpayer while they got to clean up their balance sheet.

note to the mob: just let the bottom hit naturally...it's happened before....we recovered fine from the 1890s.