Posted on 04/30/2009 8:47:17 PM PDT by Eric Blair 2084
President Obama insisted at his press conference last night that he doesn't want to nationalize the auto industry (or the banks, or the mortgage market, or . . .). But if that's true, why has he proposed a restructuring plan for General Motors that leaves the government with a majority stake in the car maker?
The feds have decided they should own a neat 50% of GM, yet that is not the natural outcome of the $16.2 billion that the Treasury has so far lent to the company. Nor is the 40% ownership of GM that the plan awards to the United Auto Workers a natural result of the company's obligations to the union.
Yet Secretary Timothy Geithner and his auto task force, led by Steven Rattner, have somehow decided that Treasury and UAW chief Ron Gettelfinger will get to own a combined 90% of GM. If there's a reason other than the political symbiosis among the Obama Administration, Michigan Democrats and the auto union, it's hard to discern. From now on let's call it Gettelfinger Motors, or perhaps simply the Obama Motor Company, though in the latter they'd have to change the nameplates.
The biggest losers here are GM's bondholders. According the Treasury-GM debt-for-equity swap announced Monday, GM has $27.2 billion in unsecured bonds owned by the public. These are owned by mutual funds, pension funds, hedge funds and retail investors who bought them directly through their brokers. Under Monday's offer, they would exchange their $27.2 billion in bonds for 10% of the stock of the restructured GM. This could amount to less than five cents on the dollar.
(Excerpt) Read more at online.wsj.com ...
Good article.
This is Obamunism in action!
Lenin would be so proud of his disciple.
Rest assured, Sam, thanks to Obama and the UAW there will never be another Trans Am. And say goodbye to the Corvette and the Camaro too.
Once upon a time, a GM bond was as good an investment as gold for the proverbial “widows and orphans.”
Karl Obama has certainly put a definitive end to that.
Now who will know if any company’s bonds are any good?
The effect of this uncertainty will be to increase the cost of capital to American companies, putting us at even more of a competitive disadvantage.
Tonight’s mod has no sense of humor apparently. Oh well.
Sam Kinison, hadn’t though this wildman in awhile. Thanks for reminding.
A. Gettlefinger Motors
B. Government Motors
C. Grand Theft Auto
D. All of the above
Bummer about that. At least I caught your post before it was pulled. :)
He/she was just doing their job. It wasn’t that bad.
Come on admin, you have to admit that it was harmless and you probably got a chuckle out of it.
WSJ kicks butt exposing this criminal administration for what it is. WSJ ROCKS!!!!!
Karl Marx believed that workers should own the means of production.
Now the UAW owns the means. That was easy.
Here comes the hard part....convincing people to buy the crap.
“Here comes the hard part....convincing people to buy the crap.”
I’m convinced. If I ever buy a new vehicle, it will be a Honda.
When it finally craps out at 300k miles and I have to buy a new car, it definitely WILL NOT be the 2013 Cadillac Pelosi with the Sierra Club package or anything made by GM...
I don't care if the US Gubmint demands that Motor Trend name it "Car of the Year".
Remember the “K-car”?
Another Chrysler bailout.
We’re repeating the late 1970’s...............
You’re right. Not only a Chrysler bailout but remember the 80’s Cadillac Cimarron (sp) or the 1976 Ford Mustang 4 cylinder POS?
Everything about socialism is sham and affectation. - 23.11 Evil “Economic Harmonies” - Frédéric Bastiat
I’m currently driving an eighteen-year-old Mazda Miata which is approaching 240K miles. Still on its original engine and it runs fine. Doesn’t ride as well as it did when I first bought it, but it does handle better (suspension is modified).
Interesting fact about Miatas: they are built in Hiroshima.
"We have deserts in our continent too, but we don't send people with fake birth certificates out of them to become president in *your* continent!"
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