Posted on 11/17/2008 8:20:55 AM PST by Candybar
Would Barney Frank, Nancy Pelosi, Harry Reid or Obama and his motley crew invest THEIR OWN MONEY (if they could) in the auto industry? The answer would be a RESOUNDING NO.
Let's look at a few facts thanks to John Hinderaker of the Powerline Blog and Paul B. Samuelson, courtesy of the Washington Post Co.:
### The market cap for GM, Ford, and Chrysler is approximately $7 billion.
### Ford has a negative book value of equity.
### GM has a huge negative net worth on a book basis of $56 billion.
### Essentially, the market is valuing the companies --- well above their (negative) book values --- but at what amounts to scrap value. GM's hourly compensation - wage plus fringe benefits - totaled $71 in 2007, compared to $47 for Toyota's U.S. plants.
My fellow Americans, would the greatest of all investors, Warren Buffett, the Oracle of Omaha, invest Berkshire Hathaway money in the auto industry? I think not. In fact, I own a few shares of Berkshire stock. I should hope that he would never make such an investment!
This is neither an investment nor a speculation. Would you put up $25 billion of your own funds for a total market cap of $7 billion? Would you put up $25 billion of your own funds for a negative book value of equity? Would you give GM $25 billion when their hourly compensation is $71 compared to $47 for Toyota? The answer is abundantly clear! NO!
This is neither an investment nor a speculation.
Well, then, what is it? I'll address this in my next post.
Looks like a good day to flush some green backs down the toilet.
Day care for the UAW.
Tie Congressional retirement accounts to GM stock and see how popular a bailout becomes.
Think of it not as an investment but what it actually is. Convoluted welfare for the UAW.
Sadly, it looks like we’re turning into an entire nation of welfare bums now.
No.
Yep.
In fact, come late January 2009 I’m going to quit my job, stop being a productive citizen, and go “on the dole”.
It’ll be SWEEEEEEEET!
If one was to bust the UAW....
Cut Executive pay by 50% and NO DAMN bonuses....
Take congressional retirement fund and pledge it against their debt. See how many votes it gets.
Damn, if I had read your post I would have saved time. LOL
Respectively, no and yes.
Let the “big three” fail and be replaced by new American auto manufacturing companies.
My daughter bought 2007 Chevy Equinox. Within a year the CV joints went,front brake rotors warped and the fuel pump (inside the gas tank) had to be replaced.
What utter junk GM is now producing. After buying Chevys for 20 years I will never buy another! I'm going Toyota next time.
So why bail out GM so they can produce more shoddy cars? It's all about keeping the Union fat and happy.
Hey Nancy - How’s that investment with Pickens’ Wind Farms working out for you?
Let the UAW put their funds in first; all of their retiree funds.
Then we can talk about the possibility of aany taxpayer money going in.
No taxpayer funds to bail out the UAW....
First clue if the bamks won’t loan them the money it’s a bad deal for everybody.
>>Would Barney Frank, Nancy Pelosi, Harry Reid or Obama and his motley crew invest THEIR OWN MONEY (if they could) in the auto industry?<<
They might buy stock just before a big bailout, watch the stock go up that day, and then quickly sell it. Only the insiders will make money.
I bet you were one of the people who didn’t believe what others were saying about how bad Chevys were compared to the imports, right?
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