Do You Favor A Government Loan To The Detroit 3?

gagrice

We will officially start losing 50% of our investment in GM by the end of the year.

Uncle Sam Books 50% Loss As Government Motors Buys Back 200MM Shares From Tim Geithner

http://www.zerohedge.com/news/2012-12-19/gm-buys-back-200mm-shares-us-government- -uncle-sam-divest-remaining-stake-50-loss

The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share

Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout - and the government would need to sell its remaining shares for about $70 each to break even.

stever

"As told in "Overhaul," Rattner's book about the bailouts, it was Wilson who concluded that GM's obligation to the U.S. Treasury would have to be "equitized" -- in the form of stock rather than loans -- or else GM would sink under the burden of too much debt.

"I thought GM was dirt cheap a year ago and the stock is up 38% since then, and I still think it's attractive," he wrote."

Architect of GM bankruptcy says stock is undervalued (Detroit Free Press)

berri

Since I think the gov doesn't directly loan, but rather guarantees the loan, it may have ridden on what interest rates the lenders would have required. Remember, a lot of banks were in a crisis back then too and liquidity dried up.

gagrice