And the Thug Obama berated shareholders of the auto companies as greedy for trying to get more than $.11 on the dollar for their investment in Government Motors and Chrysler! They make my stomach turn.
Shareholders got nothing - zero, zilch, nada. Bondholders in one deal got 11 cents on the dollar and 29 cents in the other. Bondholders, as secured creditors, are supposed to be first in line. The retirees pension and health plan, got a big chunk of the new companies. As junior creditors, by law they are supposed to get nothing until the senior creditors get paid in full.
On the other hand, Goldman Sachs got 100 cents on the dollar. In the absence of a deal, they would have gotten their assets pledged by them to be insured, handed back to them. These "assets" are worth 0 to 10 cents on the dollar. After that, they would have been junior creditors for the rest, and may have gotten a total of 10 to 30 cents on the dollar in bankruptcy. In Goldman Sachs case, in was trading at $200.27 before the crisis started, on 2 May 2008, and at $52.00 on 20 November 2008, for a loss of over 74%. They then rallied to $192.28 14 October 2009, for a net loss of 4%, and a gain of 269.8% from the closing low, before declining again as the financial sector is in the early stages of a second decline.
Goldman went from a market cap of $26.7 billion at $52.00 per share, to a market cap of $98.8 billion at $192.28 per share, for a gain of $72.1 billion. So, in addition to the direct gain of $13.2 billion from AIG to GS, there was an indirect benefit of another $58.9 billion, by shareholders knowing that the U.S. Treasury stands behind any mistakes Goldman Sachs executives might make.
It help to have friends in high places who are corrupt to the core.