GM buys back shares - Taxpayers lose billions

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this is the governments way of "washing" its hands of the volt's massive failure, the malibu turning into even more of an unwanted fleet queen, and the new restyled silverado upcoming failure. all of this is called moral hazard.
 
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I am not at all convinced that GM would have gone all the way to liquidation. I'm no economist, though. I view what happened as somewhat opportunistic on the part of GM's management. They had to endure a Congressional grilling, but that's part of what you have to do to earn the big bucks, I guess. I don't have a particularly strong opinion about GM, but arguments similar to the ones above could possibly be made about a lot of companies on the brink. This one just stands out due to scale. Are we capitalist, or are we socialist?
 
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Originally Posted By: DBMaster
I am not at all convinced that GM would have gone all the way to liquidation. I'm no economist, though.
GM would have not have been able to acquire the financial backing because of the banking - financial crisis.
 
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^I know the arguments that were made. All I am saying is that if there are not serious consequences for making poor business decisions then capitalism may be doomed. I just hope we can figure out how we think our economic system is supposed to work soon because at some point these "soft landings" are going to bankrupt the U.S. How big is "too big to fail?" Does the definition depend upon the product, number of employees, home state of the company, or commodity? Companies like GM, perhaps, SHOULD be broken up and sold in pieces, go out of business, or stop [censored]-ing the public and deal with its problems like any company that wasn't "too big to fail" has to do. If small businesses are the "engines of the economy" where is their bail out? This cherry-picking ultimately undermines faith in our economic system.
 
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Originally Posted By: Vikas
Seems pretty simple; shareholder is deciding to sell his shares and he is actually getting premium over the market price. What more do you think he can ask for??? You are an individual investor, explain to me how you would do this differently??? Are you claiming that market price should be higher? I mean what exactly is your complaint about GM buying back the shares from US Government? I am holding bunch of HP shares :-( I have lost lot of money; only if I had sold it when it was over 40. Can I get HP to buy back my shares at a premium??? If you are saying US Government should not have taken a stake at GM, then that is different argument.
Confused? The point is that buying back the shares at the current market price is cheating the taxpayers out of billions of dollars, all of which have been redistributed to union thugs/trash.
 
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The bailout wasn't act of pity or kindness toward the Big Three. It was an attempt to keep a lot of Americans from having their lives ruined by the screw-ups of a few people in Detroit. If the argument is that we didn't need to do it, then bring it on. If the argument is that economic collapse would have been better than momentarily undermining capitalism, I think that's a bit too much.
 
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Originally Posted By: d00df00d
The bailout wasn't act of pity or kindness toward the Big Three. It was an attempt to keep a lot of Americans from having their lives ruined by the screw-ups of a few people in Detroit. If the argument is that we didn't need to do it, then bring it on. If the argument is that economic collapse would have been better than momentarily undermining capitalism, I think that's a bit too much.
It was a nod to union cronies, period. They got the lions share of benefits for turning out the vote. GM would have very quickly reappeared as a series of smaller corps. Too many savvy investors were ready and waiting for that opportunity, and they would have voided all the unsustainable benefits and pensions that they STILL cannot afford. There was no benefit to the common man.
 

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Originally Posted By: SteveSRT8
Originally Posted By: d00df00d
The bailout wasn't act of pity or kindness toward the Big Three. It was an attempt to keep a lot of Americans from having their lives ruined by the screw-ups of a few people in Detroit. If the argument is that we didn't need to do it, then bring it on. If the argument is that economic collapse would have been better than momentarily undermining capitalism, I think that's a bit too much.
It was a nod to union cronies, period. They got the lions share of benefits for turning out the vote. GM would have very quickly reappeared as a series of smaller corps. Too many savvy investors were ready and waiting for that opportunity, and they would have voided all the unsustainable benefits and pensions that they STILL cannot afford. There was no benefit to the common man.
That's an interesting view, and shows some selective memory on your part given that 1)the bailout was originally orchestrated by a Republican president with few ties to labor unions and 2)at the time of the bailout, the country (and the world) was in financial meltdown. Money for investing at the level required to keep an auto company afloat (even a smaller one) just wasn't there.
 
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Originally Posted By: Fleetmon
The current administration should be thrown out on their ear and throw the two top clowns out first! To the sheep that support this administration.....up yours!!!!!!! They are in this for the money as should be obvious..the average person will continue to suffer.
Originally posted in 2004?
 
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^^^ no they were in a lame duck sesssion when the mess started. It wasn't a republican presidents sole choice . Also my opinion they should have been alowed to go bankrupt and get rid of the fat in the company. But that didn't really happen.
 

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Originally Posted By: chevyboy14
^^^ no they were in a lame duck sesssion when the mess started. It wasn't a republican presidents sole choice . Also my opinion they should have been alowed to go bankrupt and get rid of the fat in the company. But that didn't really happen.
Actually, it was a Republican president's full choice to initiate the bailout. The fact that he was a lame duck at the time only reinforced the fact that reason more than politics factored into his decision. After all, he'd already lost the election. At this point, I think most people view it as moderately successful vs. the alternative. Ultimately time will probably be the best judge, and I think it's still far too early to tell.
 
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Originally Posted By: tgferg67
How many billions would it have cost the taxpayer if GM had gone under.The loss of just the tax base would have been an estimated $108 billion over 3 years.
How much did this bailout cost the original GM stockholders, who lost every penny of their investment?
 
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Yep, the government bailed out a bunch of whining crybabies that were upset because they were in danger of not getting their $million + of bonuses. However, once they were bailed out they got them didn't they? We have two bobble-heads running this country....the unions growl and the heads start bobbing up and down, the minorities complain and the heads start bobbing up and down, the average person trys to get a loan or tax breaks and the heads start bobbing side to side. I realize they aren't the only ones making the "decisions" but they are the ones bobbing their heads up and down to some of the stupidest causes while bobbing side to side for all of the proper requests. The governments track record is something of an amazement....to continue to screw up (Katrina, Ike, Sandy, power grids, ethanol (hey - the car makers make a lot of money on repairs for this blunder), outrageous fuel prices, and the list goes on and on and on and on. We the people are paying their salaries....when do WE get something?
 
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My last GM was so bad, I bought a Honda. Couldn't be happier! Night and day difference. I don't know if I could ever buy another from the Big Three again. I wonder why I waited so long. I was at GM's Lake Orion engine plant today. Pulled in to see a dozen "workers" outside smoking by the main enterence. Went in the main cafe to see some 20-something with his pants half-down sleeping at one of the tables. I wanted to puke and was happy when I got to leave.
 
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Originally Posted By: rshaw125
People forget that GM wanted to reorganize through bankruptcy before the bailout. Massive pressure was put on them not to. So they went into the great recession even weaker. Bankruptcy does not mean ceasing to exist. American Airlines has been through it twice. Washington wanted taxpayers to think the plants would all have closed forever. Washington to the rescue.
To the contrary. The names of companies continue after bankruptcy, however, under current bankruptcy law, those companies are considered "new" companies. Some of the assets attributable to American Airlines were sold off to pay creditors, and to pay the Pension Benefit Guaranty Corporation for pensions to those who had worked for American Airlines. Some assets, along with the name American Airlines were reserved by the judges in the cases for American Airlines to come out of bankruptcy as a new company twice. The trustee of the old American Airlines sold the name during bankruptcy to obtain money for creditors and the U.S. Government. Same thing happened with General Motors and Chrysler. The original companies died in 2009. Certain assets of the old companies were sold to pay creditors and the pension fund run by the U.S. Government. Other assets were reserved by the judges to start the new companies. The names were bought from the Trustee of the bankrupt companies, along with the assets that the judges reserved prior to the companies emerging from bankruptcy. The old companies, that were American Airlines, General Motors, and Chrysler were renamed and their assets not reserved by the judges were liquidated.
 
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