From The Detroit News: http://www.detroitnews.com/article/20120813/AUTO01/208130392#ixzz23SnfVvui
- 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 fell $0.07, or 0.3 percent, to $20.47. 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. At the current price, the Treasury would lose more than $16 billion on its GM bailout.
The steep decline in GM's stock price has indefinitely delayed the Treasury's sale of its remaining 26 percent stake in GM. No sale will take place before the November election.
Ooops. Even though the book won't be closed for a while, it says something that our Treasury is predicting a loss. Oh well, it's just other people's money.
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Delete@Jean - exactly why they don't give a damn
DeleteThe government has chosen the winners and losers in our economy. I have read many opinions on why certain businesses were supported with tax money, but the fact remains that the government has become very active in American business. It is not an casual observer and regulator. This meddling will continue up to the point that no one will be able to create new businesses that can compete with the government supported and protected ones.
ReplyDeleteWhat a few billion more in comparison to the 5 trillion in the last 3.5 years. Maybe we're becoming jaded at the spending we hear about every day.
ReplyDeleteDo ya think?
DeleteAdd to that the issue of dealership closures:
ReplyDeletehttp://www.cbsnews.com/8301-503544_162-57484452-503544/new-romney-ad-blames-auto-bailout-for-job-loss/
"As the ad says, loans became difficult to obtain from both Wall Street financial institutions and the lending arm of General Motors. Some dealerships struggled to stay afloat or were forced to close due to the larger financial crisis and as the government takeover and subsequent structured bankruptcy led to less access to cash, according to the Center for Automotive Research (CAR).
And jobs were lost during the bailout, but only a fraction of the number that would have been lost without it. The structured bankruptcy, however, was estimated to have led to the loss of 365,000 jobs compared an estimated 1.8 million jobs if the federal government did not intervene, according to a 2010 study by CAR."
Complete disclosure: I haven't looked for corroboration on the 356K losses. And, of course, it would be impossible to vett the contention that 1.8M would have been lost. I tend to think that would not have happened. The point is that the loss that went along with the positive of so-called saved jobs just didn't seem to get much press.
OK, classify that as a mini-rant.