How GM IPO Proves the Tea Party Wrong

The US Tax Payer lost 9 billion on this boondoggle for Wall Street.

http://www.reuters.com/article/idUSN1827687520101118

Bloom said GM has done the right thing and pricing of $33 per share is a "fair deal" even though the partial sale represents a loss of roughly $9 billion on taxpayers' original investment.

If that proves the Tea Party wrong, I just want to know what color is the sky on the planet you are on?

I wonder who is buying this stock? $ 193 billion released by the Fed to banks this past week? GM stock offering the next.

Fed counterfeit money. "Lends" the money to banks for nearly nothing. Banks then buy GM Stock at the allotment price. Stock rises to 6%. Banks sell their shares with a gain as excitement sucks others into the buy. Banks pay back Fed and sit on profits. ....and the rest of story is yet to be written.

Something the Dog Said wrote: I always enjoy the comments from the self-professed "experts". IPOs on the NYSE are always underwritten by banks and financial institutions. Those entities receive a 7% discount for taking on the entire risk of the IPO. Those institutions then allocate the shares to their clients and brokerage firms for sale to the general public. This instance is no different than any other large IPO.

Also, according to the Center for Automotive Research,
“The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income."

You don't like comments from yourself? You seem to be self professed....

The point is the manipulation of the free market. Had GM gone into bankrupcy, it would have come back as a lean company for the long term. The govt. chose them....and gave them special treatment. Now they are still a clunky old company, with horrible books. Yes, the govt will get the $$ back due to a pump and dump scheme, but they didn't help the company long term. It was a payoff to a specific group of people...the unions.

I will be surprised if GM competes long term....I wouldn't buy the stock with the intention of holding long term.

The problem with the liberal mindset is the lack of guts to deal with immediate pain, for a long term great future. The reps have suffered with that same problem. We are finally getting some politicians with guts in there to do the right thing long term, and the liberals are having a cow....

So, let's see....

Also, according to the Center for Automotive Research, “The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income."

So, the Gov't MIGHT...(emphasis on "MIGHT", since we don't know how high the stock will go, and if the Gov't sells its shares at $50/share in the future, it will recoup every dollar)... have lost $9 billion.

In the meantime we KNOW that they DIDN'T have to spend $28.6 Billion for unemployment benefits/Medicare/Social Security and other programs
AND, the 1.4 million jobs and $121 billion in personal income was not lost...

Hmmmmm...... $28.6 Billion + $121 Billion = $149.6 Billion that was saved... vs. a $9 Billion loss--for now....

Yeah, the sky is Blue, and the sun is yellow where I'm sitting.

But, hey, "Let Them Eat Cake" is still the rallying cry of Righties and Tea Partiers....

LadyJazzer wrote: So, let's see....

Also, according to the Center for Automotive Research, “The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income."

So, the Gov't MIGHT...(emphasis on "MIGHT", since we don't know how high the stock will go, and if the Gov't sells its shares at $50/share in the future, it will recoup every dollar)... have lost $9 billion.

In the meantime we KNOW that they DIDN'T have to spend $28.6 Billion for unemployment benefits/Medicare/Social Security and other programs
AND, the 1.4 million jobs and $121 billion in personal income was not lost...

Hmmmmm...... $28.6 Billion + $121 Billion = $149.6 Billion that was saved... vs. a $9 Billion loss--for now....

Yeah, the sky is Blue, and the sun is yellow where I'm sitting.

But, hey, "Let Them Eat Cake" is still the rallying cry of Righties and Tea Partiers....

Oh yes, I doubt we would hear the left making the same rallying cry for a bank or oil company if the losses were similar during a liquidation.

I wonder if the reports discusses the impact on competitor market share and how gains by those competitors would have increased employment elsewhere?

Face it, GM was saved because of the Unions.

RenegadeCJ wrote:

Something the Dog Said wrote: I always enjoy the comments from the self-professed "experts". IPOs on the NYSE are always underwritten by banks and financial institutions. Those entities receive a 7% discount for taking on the entire risk of the IPO. Those institutions then allocate the shares to their clients and brokerage firms for sale to the general public. This instance is no different than any other large IPO.

Also, according to the Center for Automotive Research,
“The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income."

You don't like comments from yourself? You seem to be self professed....

The point is the manipulation of the free market. Had GM gone into bankrupcy, it would have come back as a lean company for the long term. The govt. chose them....and gave them special treatment. Now they are still a clunky old company, with horrible books. Yes, the govt will get the $$ back due to a pump and dump scheme, but they didn't help the company long term. It was a payoff to a specific group of people...the unions.

I will be surprised if GM competes long term....I wouldn't buy the stock with the intention of holding long term.

The problem with the liberal mindset is the lack of guts to deal with immediate pain, for a long term great future. The reps have suffered with that same problem. We are finally getting some politicians with guts in there to do the right thing long term, and the liberals are having a cow....

I have yet to claim to be an "expert" on any subject. Actually GM did go into bankruptcy Chapter 11 as part of the investment program. Had the bailout not been provided, GM would have been forced into Chapter 7, from which it would not have emerged intact. Millions of jobs would have been lost, medicare/medicaid claims would have gone up dramatically, unemployment benefits would have gone up tremendously, plus the loss of warranties to those who GM products, and so on. The problem with the conservative mindset is the inability to actually determine the facts and just make things up. We finally have politicians who can implement successful programs that save the taxpayers billions of dollars, save millions of jobs and the conservatives are having a cow . . .

residenttroll wrote:
I wonder if the reports discusses the impact on competitor market share and how gains by those competitors would have increased employment elsewhere?

The liberals act like this would have happened in a bubble. If GM ceased to exist, people still buy cars. Production would have increased in the better competitors, and lot of new jobs would be available.

“By taking GM and Chrysler under the taxpayer wing, the Government may have saved some money in the short term, but it created a dangerous precedent for the future. Given the events of the auto bailout, why would the leaders of any other failing industry take the difficult path through restructuring when, with the help of think tank apologists, they could simply collapse into a publicly-funded do-over?”

--Edward Niedermeyer, editor-in-chief of The Truth About Cars

Something the Dog Said wrote: I have yet to claim to be an "expert" on any subject. Actually GM did go into bankruptcy Chapter 11 as part of the investment program. Had the bailout not been provided, GM would have been forced into Chapter 7, from which it would not have emerged intact. Millions of jobs would have been lost, medicare/medicaid claims would have gone up dramatically, unemployment benefits would have gone up tremendously, plus the loss of warranties to those who GM products, and so on. The problem with the conservative mindset is the inability to actually determine the facts and just make things up. We finally have politicians who can implement successful programs that save the taxpayers billions of dollars, save millions of jobs and the conservatives are having a cow . . .

Not one successful program has been enacted to turn anything around. Propping up GM, only to have it fail again later isn't a successful plan for getting the country going again. If propping up fiscally insolvent companies were a recipe for success, NO company would go bankrupt. The free market works when you let the failures fail, and let the companies who run a good ship succeed. Propping up the failures only hurts the economy.

Something the Dog Said wrote: We finally have politicians who can implement successful programs that save the taxpayers billions of dollars, save millions of jobs. . .

For your sake, I certainly hope you are kidding.