Your GM bailout dollars at work - Billions Disappear

I want to preface that I am a car nut just as much as I'm a peen who-ah.   So when there is news you need to learn that you won't hear elsewhere, I must post it.    To some of you, this will be like rubbing a puppy's nose in its shit, but it is what it is.   Despite promises to the contrary, we lost $3 billion bailing out Chrysler (not including the interest on the money we paid) and we'll get absolutely soaked by the Government Motors bailout.    Estimates have between $20-40 billion of taxpayer money disappearing that will never be paid back.

It should come as no surprise that I had no use for GM being bailed out - nor Chrysler.   I believe bad companies should be allowed to fail.   Yes, there is short term trauma to the economy as people are unemployed and investors lose their shirts.    The fact remains, however, that in the bailout investors still lost their shirts and the only people to profit off the deal were labor unions and the Democrat party which got a portion of the preserved union wages in the form of kickbacks, er, donations from union dues.

I just came across some interesting facts that should put to rest that the notion that bailing out GM was a good idea.    Two items below should stun you.

The first is about the real cost of the GM bailout and that our losses are approaching $35 billion (we "gave" GM $50 billion interest free plus allowed them somehow to take the losses from a defunct company to use to offset any profits in the new company - to the tune of $14 billion more).

The second item is a video deals with the fact that in 2012 70% of GM production is now overseas.   That means that AMERICAN taxpayers saved a company purportedly to save "American" jobs when our money was diverted for international expansion in production that created no net American jobs at all!    Re-hiring some workers that were unemployed due to the sales decline leading to the bailout is not a net increase in employment - it only mitigates the pre-bankruptcy losses!

Enjoy.   And just remember - you don't get interest free money like Government Motors got.    And also remember we are paying interest on this money every day in perpetuity because all of the money we gave Government Motors was borrowed money!   And since Government Motors has not paid off the money through stock sales and direct payment, we will forever pay interest on the bailout money and the interest paid (borrowed money again) in this criminal scheme.

Enjoy.....

Government Motors: GM Stock Hits New Low, Taxpayer Loss Hits $35 Billion

General Motors (GM) shares closed down 1.5% to 19.02 on Monday, hitting 18.85 intraday. That's the lowest since the U.S. auto giant came public again in November 2010 at 33 a share. Update: GM shares early Tuesday fell 1.4% to 18.76, hitting a new low.)

That raises the taxpayer loss on the GM bailout to just shy of $35 billion. Here's the math:

GM doesn't have to pay back anything else, but taxpayers are still out $26.4 billion in direct aid. The Treasury still owns 26.5% of GM — 500 million shares. The stock would have to rise to about 53 to break-even on that direct aid. At the current price, the Treasury's stake is worth just $9.51 billion. (Taxpayers lose $5 million for each penny that GM stock falls).

That would leave taxpayers out $16.9 billion. But the true cost is much higher.

Read more at Investors (of Investor's Business Daily association) here 

As of the writing of this blog entry, GM shares are trading even lower than noted in this article.  Within pennies of a record low that was set YESTERDAY.

And then the most infuriating and galling declaration from the Government Motors CEO...

Updated:  GM: Still $42B in the Hole
Taxpayers on the hook for billions despite Obama’s claims to the contrary

Despite President Barack Obama’s stories about a resurgent GM ready to repay its bailout tab, the automaker and its former bank still owe taxpayers nearly $42 billion, according to an inspector general’s report.

GM owes $27 billion on the nearly $50 billion it received from the auto bailout and Ally Bank, the company’s lending arm, owes $14.7 billion of the $17.2 billion taxpayer-funded bailout it received.

Obama has promoted the auto bailout as a success story, highlighting the manufacturing jobs it may have saved in swing states such as Ohio and Michigan.

“I refused to turn my back on a great industry and American workers. I bet on American workers. I bet on American manufacturing,” he said at a campaign rally in Oakland. “Three years later, the American auto industry has come roaring back.”

GM’s stock has plummeted in recent months after stagnant development in overseas markets. It hit a new low on Wednesday, falling to $18.80, a 52 percent drop from its January 2011 high of $38.90.

The rapid decline of the stock price has kept taxpayers on the hook for billions in unpaid bailout dollars. The stock would need to make a quick—and meteoric—turnaround for taxpayers to break even.

“In order to recoup its total investment in GM, Treasury will need to recover an additional $27 billion in proceeds. This translates to an average of $53.98 per share on its remaining common shares in New GM,” the IG report concluded.

Read more here.