U.S. to lose $25 billion on auto bailout

[Vel]

1) We didn't "save" anything. Bankruptcy has been a viable option for thousand of companies that emerged healthier.
2) The cost of war is non sequiter. Regardless of what we spend on military, it does not justify the bailouts.
3) We did create a tremendous moral hazard.
4) We did screw over the bondholders
5) We did screw over GM's competitors who could have taken market share.

As for number 4.......I still dont get why there was no outrage over that.
As for number 5.....Ford did it right....and they walk away as the losers. Go figure. Reward the bad at the cost of the good.

If by GM's competitors you mean Toyota, Honda, Nissan, VW, etc., I say fuck 'em. They are not American companies. It's not the U.S. government's job to take care of them.

Nissan and VW provide jobs for Tennesseans. GM is providing jobs for the Chinese.

 

[Vel]

Now Obama wants to do what he did to GM to "all industries"....he's an economic illiterate.

Like this..
Lawsuit against Obama Administration Doubles in Size as Former Chrysler Dealers Defeat Government?s Key Motion | The Law

 

[auditor0007]

Treasury: U.S. to lose $25 billion on auto bailout

By David Shepardson
Detroit News Washington Bureau

Washington -The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15 percent higher than its previous forecast.

In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.

The report may still underestimate the losses. The report covers predicted losses through May 31, when GM's stock price was $22.20 a share.

On Monday, GM stock was trading down 6 cents, or 0.2 percent, to $20.49. At that price, the government would lose another $850 million on its GM bailout.

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.

Treasury spokesman Matt Anderson said the costs were still far less than some predicted.

"The auto industry rescue helped save more than one million jobs throughout our nation's industrial heartland and is expected to cost far less than many had feared during the height of the crisis," Anderson said.

The Obama administration initially estimated it would lose $44 billion on the bailout but reduced the forecast to $30 billion in December 2009.

Republican presidential candidate Mitt Romney has decried the losses on the auto bailout and insisted that forcing GM and Chrysler Group LLC to go through bankruptcy first would have saved taxpayers money.

But President George W. Bush — who gave the automakers and their finance arms about $25 billion in his final weeks in office in bailout funds — said there wasn't time.

Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.

The Treasury also has put on hold an initial public offering initially planned for last year in Ally Financial Inc. because of market weakness. The government holds a 74 percent majority stake in the Detroit auto finance company as part of its $17.2 billion bailout and has recovered $5.7 billion.

GM CEO Dan Akerson told employees at a town hall meeting Thursday that the company was working to take actions to boost the automaker's sagging price.

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From The Detroit News: Treasury: U.S. to lose $25 billion on auto bailout | The Detroit News | detroitnews.com

But, but, one of Obama's slogans (and left talking point) is that GM is alive. Glad we could keep the company afloat for the wealthy unions even though it means we lose our ass. Hell, we lost money on Solyndra and a bunch of other green companies. Ain't throwing away money fun? It is when it's not yours you are playing with.

Things are looking up for the car makers despite the current stock price.

Bull Vs. Bear: The Future Is Looking Up For Major Automakers (CARZ, VROM, GM, F, TM)