I suppose there are few of us who hadn’t guessed this, but it would have been nice to have it reported before the administration committed to a bailout:
It’s sure to be a stretch. For the United States to fully recover its investment, the value of General Motors stock will have to reach levels it has never before attained.
“I’m not going to predict it — that’s not my job today,” GM chief executive Fritz Henderson said in a recent interview.
“I don’t know how much we’re going to recover,” a senior Obama administration official said as the company headed into bankruptcy last month.
This uncertainty stems from the difficulty in valuing the 60 percent GM stake that the United States will receive in exchange for the public investment. The government also gets preferred shares and other compensation.
The stake will be worth enough to fully cover the government’s direct investment only if GM’s stock rises above $68 billion. Even at its recent 2000 peak, GM’s stock was worth only $56 billion.
Liberals have complained that about the secretive nature of the Bush administration. They argued that some folks in the Bush White House should have known that Iraq lacked stockpiles of Weapons of Mass Destruction, but failed to disclose all they knew. Here we have a case of the supposedly-transparent Obama administration sitting on negative information because it might have spoiled the GM bailout. Just like they sat on a report about the effectiveness of DC’s charter schools. And just like they sat on an inconvenient EPA report that casts doubt on the administration’s arguments about ‘global warming.’
If President Obama was genuinely interested in openness and transparency, he would have said clearly up front that there was no expectation that all this money would come back to the Treasury. Instead, he has concealed that fact – largely because he could see how many Americans opposed this bailout. If he had been truthful about his plan, there would have been even more opposition to this payoff to the unions.
Steve Maley
KnightsofMalta
C'mon, give Fab a break
6eorge Jetson (Diary) Wednesday, July 1st at 12:30PM EST (link)He’s just lip-synching to the lyrics of the liberal TOTUS soundtrack.
And who wouldn’t want one of these?
And as to recovering the taxpayers investment in GM, why would you doubt such a seasoned 31-year old executive leader?
Kowalski
6eorge Jetson (Diary) Wednesday, July 1st at 12:53PM EST (link)GM Job training program
Greg (Diary) Wednesday, July 1st at 12:37PM EST (link)Just need to get the Students to repay their loans.. I sorry I meet to say Union…
GM Will Repay Its Loans.
Loren Heal (Diary) Wednesday, July 1st at 5:27PM EST (link)When inflation zimbabwes, $58B will just about buy a Silverado, as long as you lay off the pricey options.
But even after they pay back every penny, the government will still control them somehow.
Unless we take back power, and soon.
–
Join the Concord Project, and follow @lheal, if you dare.
No Great Shock
oklahomajon Wednesday, July 1st at 9:51PM EST (link)No Great Shock but nothing shocks me out the goverment anymore
I dunno. I think GM could be worth more than 68 Billion someday
The_Gadfly (Diary) Thursday, July 2nd at 5:49PM EST (link)If they didn’t have the union albatross around their neck, the EPA hamstringing their ability to make cars people want to buy, and engineers designing their cars instead of politicians. Oh, and it also might help if they actually kept their dealers who made a profit as opposed to just the ones who were politically well connected.
Of course, if none of that happens,…
Another way that GM may be worth more than $68B
civil truth (Diary) Thursday, July 2nd at 5:57PM EST (link)With a nice dose of Weimar/Zimbabwe inflation, the gov’t stake in GM could soon be valued at $69Q or even $68Q. The sky’s’ the limit. We’ll all be billionaires – what an investment!
Of course, the dollar will be worth less than the paper’s its printed on, but beggars can’t be choosers, right?
The greatest evil…is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed, and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voice. Hence, naturally enough, my symbol for Hell is something like the bureaucracy of a police state or the offices of a thoroughly nasty business concern. -C.S. Lewis
http://www.gmsplace.com/