Posted on 05/05/2009 8:40:22 PM PDT by jern
“The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department in which the government would assume at least half of GM’s debt in exchange for company shares. GM will send the information to shareholders currently holding a total of 610.5 million outstanding shares.”
My bad. They are planning on issuing a paltry 61.3805 billion shares. They will have a hard time finding paper stock, though. The Fed is feeding the printing presses pretty regularly now. Paper and ink. Those commodities are going to ROCK! (that is not investing advice. just a guess)
LOL....Lucky you, we still have ours. Not for long though.
The Restructuring Transactions will cause very substantial dilution to existing holders of GM common stock. As of March 31, 2009, there were 610,505,273 shares of GM common stock outstanding. Assuming full participation in the Exchange Offers, the aggregate amount of GM common stock issued in connection with the Exchange Offers will be approximately 6.1 billion shares, which, based on the number of shares of GM common stock outstanding as of March 31, 2009, would represent approximately 10% of the pro forma outstanding GM common stock; the aggregate amount of GM common stock issued to the U.S. Treasury (or its designee) pursuant to the U.S. Treasury Debt Conversion and to the New VEBA pursuant to the VEBA modifications will be approximately 54.4 billion shares, which would represent approximately 89% of the pro forma outstanding GM common stock, with the final allocation between the U.S. Treasury (or its designee) and the New VEBA to be determined in the future (however, as a condition to closing the Exchange Offers, subject to the overall limit of approximately 89% of the pro forma outstanding GM common stock to be issued to the U.S. Treasury (or its designee) and the New VEBA in the aggregate, the U.S. Treasury (or its designee) will hold at least 50% of the pro forma outstanding GM common stock); and existing GM common stockholders would hold approximately 1% of the pro forma outstanding GM common stock. We determined the foregoing GM common stock allocations following discussions with the U.S. Treasury where the U.S. Treasury indicated that it would not be supportive of higher allocations to the holders of GM Public Debt or to the existing GM common stockholders.Roll on fascist freighttrain, roll on.
I am a Bank of America customer, and I wish I could take our money out. My wife is not so inclined, so I have no choice in the matter. I love her dearly, but she doesn’t see certain things the same way I do. Sigh. If it were only my choice and my money...
Odd. I wish I could boycott them, but I can’t. I don’t want to see any banks fail, but I would rather see them fail than be nationalized the way they are, and this includes my own bank with my own money. Geezo Crow, what a spot.
Whoops, make that 60.5 billion pre-split shares newly issued (6.1bn + 54.4bn).
What’s that word I learned in college, the one that rhymes with fustercluck?
I just got a notice that BofA now has my Countrywide mortgage. If BofA goes under, does that mean my contract is null and void?
Nope. It accelerates the term. You may send your monthly payments to me, or just wire the balance as a one-time transaction. I will even waive the pre-payment penalty ;)
no
There's the "money quote": that's "issued" stock, not "authorized" stock. Print 'em and reverse-split-'em, none saved in the vault for employee stock plans, "future opportunities", nothing like that. Fifty-year Dow Jones member to pink-sheet penny stock overnight! (And then the 100:1 smoke-and-mirrors reverse split.)
Nope. Your debt is an “asset” and will be protected as carefully as if it were the cure for cancer.
All I know is that it took them 10 minutes to deposit a check into my account this morning. The manager had to be called over. Asked me if I established the account out-of-state (”No, I established it at this bank if you cared to look”). They asked me where I got my deposit slip (”From you and I used one last week without problems”). They finally figured out that I was depositing the check into my savings account, not my checking account.
Now imagine the same bank handling billions of dollars.
Well it's a good thing we have Timmy the Toolman Geitner workin' it, isn't it!
Seems they have a vast level 3 liability of credit derivatives which have not been elucidated to the public...it is the bailout that never ends....more capital will be needed in another few months as more of their vast book of overleveraged derivatives unwind. The system seems to be bankrupted several times over. The figure of an est’d. $600-700 trillion in world-wide credit deriv. liabilities by the BIS, with the US accounting for about $200 trillion with our five largest institutions is enough to cause general anxiety above and beyond flu concerns. Meredith Whitney just announced that half of the Fed Reserves 8000 banks are in for major trouble. The public worldwide seems to be getting the picture as well. Plenty of warning pieces posted continually on this site. People are not asleep.
That must be a trend— we have nothing but trouble with our deposits there.
I just got a letter from Bank of America informing me they’re doubling the interest rate on my credit card. I wonder if this is how they’re hoping to raise some of that capital.
Rumor-mongering or not, please keep in mind that the real purpose of the bank “stress test” is to determine how much money would be required to handle a full-scale depositor run.
Just the idea that the government and banks are so concerned about a depositor run should be frightful enough.
Should one of the top 19 banks actually succomb to such a run, say...perhaps when the actual stress test results are made public...then ATMs and credit cards could easily suffer a hiccup.
You might be without both for a weekend. Maybe even a week.
Judge for yourself how the general Public would respond.
If you don’t already own body armor, get it. Stress test results are *supposed* to be made public Thursday morning. If they need to be “massaged” or are really bad and can’t be covered up, that date will be pushed back (Friday afternoons are popular “bad news” dump days, for example).
Likewise, brace yourself “just in case” your access to ready bank cash gets stalled.
I suggest having at least a month’s worth of cash on hand...this week.
*and my caution will probably prove to be overly-conservative. The more likely result is that life goes on as normal, nothing happens, no bank runs, etc.
http://finance.yahoo.com/q?s=BAC
Market cap of 69.39B.
34/69.39= 48.99% of current existing cap is hereby required to be added?
correction, "additionally added?"
If I were getting a great rate on a CD I certainly wouldn't be in a hurry to take a penality to cash it in early. That said, it looks to me like they currently have some pretty crappy rates.
Argh. Something like that I would be fine leaving in place, I just wish I could move everything else.
The Fed will just “print” (or create out of thin air electronically) all the money needed.
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