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Post by AztecWilliam on Dec 19, 2012 23:36:29 GMT -8
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Post by aztec70 on Dec 20, 2012 20:32:25 GMT -8
www.nasdaq.com/symbol/gm/analyst-researchMost market analysts do not not see GM as a struggling company. They say it is a strong buy. There goes that contention. The author seems to think that the Treasury is an investment bank and this was an investment. Wrong, this was a successful rescue of hundreds of thousands, maybe more than a million, of jobs. The taxes those employees will pay will more than enough income to the Treasury to make up the difference. A million jobs paying income tax for years, instead of drawing unemployment benefits. That is a big win.
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Post by markyc on Dec 20, 2012 21:18:10 GMT -8
When you post an article that is not from a right wing conservative website, I MAY read it. But probably not |
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Post by AztecWilliam on Dec 21, 2012 0:01:48 GMT -8
When you post an article that is not from a right wing conservative website, I MAY read it. But probably not Well, facts are facts. With respect to the GM deal, U.S. taxpayers cannot get back the money given to that company until the GM price per share goes way, way up. Can that happen? Not impossible, but right now it looks very, very unlikely. If GM buys back its shares held by the feds at about $27.00 each, the whole deal will have been corporate welfare, pure and simple. I think crony capitalism is an appropriate term. There are several things that are important to understand with respect to the Detroit bailout, and both you and aztec70 would do well to consider these points. (1) Giving taxpayer money to a failing company simply props up that company without, almost without exception, doing anything to change the corporate culture of the firm which lead to the failure in the first place. You are rewarding failure. Meanwhile, more successful competitors who got no bailouts are put at a disadvantage. (Pres. Obama brags about GM, but does he ever give an "ataboy" to the more successful Ford, a company that took not bailout money?) Capitalism thrives when the least competitive companies are allowed to go out of business. It's terrible for the people who lose their investments and for the people who lose their jobs when this happens, but in the long run it's for the best. It's called "Creative Destruction." In socialist economies (I'm thinking especially of the Soviet Union), failing companies are continually bailed out, causing them to be a constant drag on the whole nation. (2) With respect to the auto industry, both GM and Chrysler should have gone through normal bankruptcy procedures like other companies seeking a fresh start. In the end, both did go bankrupt, but the Obama deal was, in my opinion, illegal. The bond holders who should have been first in line were screwed, while the Democrat-friendly UAW got overly favorable treatment. Chrysler has been moribund for a long, long time. It should have been allowed to fail. What happened was that Fiat was essentially bribed to take over the company. Had there been a normal bankruptcy reorganization, the valuable pieces of Chrysler (Jeep. for one) would have found new homes. For that matter, the same would have been done with GM. Even if GM were being liquidated (which was not inevitable), do you not think that investors would have been eager to buy the Chevy, Cadillac, and GMC brands and their supporting plants and distribution systems? As things stand today, GM still has to deal with UAW labor rates that make their vehicles uncompetitive. (There is also the burden of being coerced to make business decisions on political and ideological grounds rather than decisions based on rational, objective considerations. Do you think that any sane company would have introduced the Volt? Or, having brought it to market and seen was a slug it was, would any sane company have failed to cancel it as Ford did with the Edsel? By the way, the Edsel was not actually a bad car; the Volt is, if not a bad car, certainly not the car GM needed.) If you had read the piece I reference in this thread, you would have learned why the Obama bailouts have made it harder for GM and Chrysler to be profitable. All the happy talk from the administration about the auto bailout does not make that deal a good one. AzWm |
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Post by aztec70 on Dec 21, 2012 6:50:21 GMT -8
www.usatoday.com/story/money/cars/2012/10/31/gm-general-motors-q3-earnings/1670015/Both GM and Chyrsler are profitable. There could have been no "normal bankruptcy" at that time. In a normal bankruptcy banks lend money to the company to fund them during the bankruptcy process. The financial sector was frozen and was not lending money to anyone. The government was only entity that could do it. Reality, William, is different from you libertarian fantasy.
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Post by aztecwin on Dec 21, 2012 14:08:22 GMT -8
Read the details. The taxpayers are being taken to the cleaners. |
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Post by AztecWilliam on Dec 21, 2012 14:44:47 GMT -8
www.usatoday.com/story/money/cars/2012/10/31/gm-general-motors-q3-earnings/1670015/Both GM and Chyrsler are profitable. There could have been no "normal bankruptcy" at that time. In a normal bankruptcy banks lend money to the company to fund them during the bankruptcy process. The financial sector was frozen and was not lending money to anyone. The government was only entity that could do it. Reality, William, is different from you libertarian fantasy. Actually, you mention a good point that I considered but finally failed to address. I do think that the federal government could have played a positive role, even if with taxpayer money, by lending enough money so that GM could have continued operating during an orderly, normal bankruptcy procedure. I remain convinced that the Obama bailout was illegal (bondholders, who should have been first in line to be paid, were strong-armed into accepting a "Give them a deal they can't refuse" offer). Worse than that, however, is the fact that General Motors is "profitable" only thanks to government help. The company still has labor rates that are way too high. That being the case, where are they going to get the massive amounts of money needed to develop the new fleet of vehicles they will need to meet the coming draconian CAFE mileage standards? From the feds, of course! I will remind you that there is historical precedent for a car company successfully going through regular bankruptcy without government help. I refer to Studebaker. That was during a much worse financial crisis, the Great Depression. Studebaker emerged from Chapter 11 in the mid-1930s and continued making cars and trucks for the next three decades. I'm not sure that regular bankruptcy for GM and Chrysler would have been any more difficult than it was for Studebaker. The government could have and should have helped GM and Chrysler in a more even-handed manner. That it did not set a very bad precedent. Now, when an investor thinks about putting his money into a company, he would be well-advised to think, "Is this company well enough connected politically so that there is a good chance of its getting a federal bailout, or are the feds likely to tell it to drop dead if things go badly for it?" Do you think that Obama would have bailed out one of the foreign car makers with plants in right-to-work states had it gotten into trouble? (A better question might be, "Why did the foreign car makers with plants in right-to-work states NOT go broke in the first place?") The problem of the government meddling in the operation of a private firm is easy to identify; political rather than practical business considerations become more important when management considers how the company should operate. That is not in anybody's long range best interests. Even the interests of the UAW. AzWm |
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Post by AztecWilliam on Dec 21, 2012 15:01:07 GMT -8
Here is an interesting tidbit from the news item that aztec70 brought up in a futile effort to refute my rock-solid argument against government fiddling with private business. (I'm feeling rather self-assured today.  ). GM is talking with German labor unions about closing a plant in Bochum after 2016.GM is talking with the union. Talking with the union? Mother, may I? In a free society, those who own the company merely have to tell the union that business is bad and the plant has to be closed to help the overall health of the company. Which means protecting the jobs of workers in other plants. Again, this is creative destruction. When the government runs the economy, you get crap products and failing companies. You get the Trabant in East Germany. When the government stays out of the economy, or mostly so, you get the I-Phone. AzWm |
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Post by AztecWilliam on Dec 21, 2012 15:55:44 GMT -8
The French are giving us an example of what not to do as regards the government and the economy. Here's an example of what might be in store for us in America. Anyway, the unexpected consequences of collectivist outrage aimed at industry is highlighted (note the emphasis (mine). . . . . .the nationalization of that plant (Florange steel plant) was ruled out - which, incidentally, triggered the fury of workers and union leaders. All the same, the mere act of brandishing that measure will have deterred more than one foreign investor from placing their hopes, and their money, in France. Thus, by trying to perpetuate 629 posts (the removal of which, let's recall, will not lead to layoffs), thousands of jobs may never see the light of day in France because of investors' fears of falling prey to an expropriation ukase should efficiency considerations force them to trim their payroll.www.realclearworld.com/articles/2012/12/21/frances_anti-rich_boomerang_100420.htmlAzWm |
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Post by AlwaysAnAztec on Dec 21, 2012 16:53:11 GMT -8
Haters of <Obama> <Unions> <The Poor> <Gun Control> (Choose One)
Continue to Hate
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Post by AztecWilliam on Dec 21, 2012 17:04:45 GMT -8
Haters of <Obama> <Unions> <The Poor> <Gun Control> (Choose One) Continue to Hate This continual reaction . . . . you hate! . . . . when someone expresses a contrary political or economic opinion is pretty embarrassing. How about putting forth a point-by-point defense of your own position? The ad hominem attacks are not arguments. AzWm |
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Post by aztecwin on Dec 21, 2012 17:12:35 GMT -8
Haters of <Obama> <Unions> <The Poor> <Gun Control> (Choose One) Continue to Hate This continual reaction . . . . you hate! . . . . when someone expresses a contrary political or economic opinion is pretty embarrassing. How about putting forth a point-by-point defense of your own position? The ad hominem attacks are not arguments. AzWm Good point! Shows the inability to form a coherent argument. |
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Post by davdesid on Dec 21, 2012 17:34:39 GMT -8
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Post by aztec70 on Jan 3, 2013 8:28:05 GMT -8
Anyone buy GM back when you cons were bashing them? They have made some money.
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Post by aztecwin on Jan 4, 2013 15:46:01 GMT -8
Anyone buy GM back when you cons were bashing them? They have made some money. They have a long way to go before the taxpayers make any money. |
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Post by aztec70 on Jan 4, 2013 16:32:33 GMT -8
Anyone buy GM back when you cons were bashing them? They have made some money. They have a long way to go before the taxpayers make any money. Still playing that broken record, huh? |
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Post by aztecwin on Jan 5, 2013 8:53:38 GMT -8
They have a long way to go before the taxpayers make any money. Still playing that broken record, huh? What are irresponsible and uninformed response! If it sounds like a broken record, that is just what it should sound like. ?Taxpayers and others got screwed by the bailout. They will never be made whole unless GM gets much more profitable. Bond holders will never recover. The Union workers will continue to drink beer and smoke pot at lunch before returning to work to make your Volt. |
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Post by aztec70 on Jan 5, 2013 10:02:49 GMT -8
Still playing that broken record, huh? What are irresponsible and uninformed response! If it sounds like a broken record, that is just what it should sound like. ?Taxpayers and others got screwed by the bailout. They will never be made whole unless GM gets much more profitable. Bond holders will never recover. The Union workers will continue to drink beer and smoke pot at lunch before returning to work to make your Volt. Your post displays your complete lack of understanding the issues here. |
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Post by aztecwin on Jan 5, 2013 10:25:54 GMT -8
What are irresponsible and uninformed response! If it sounds like a broken record, that is just what it should sound like. ?Taxpayers and others got screwed by the bailout. They will never be made whole unless GM gets much more profitable. Bond holders will never recover. The Union workers will continue to drink beer and smoke pot at lunch before returning to work to make your Volt. Your post displays your complete lack of understanding the issues here. Now try to address the subject! |
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Post by Montezuma on Jan 5, 2013 10:38:27 GMT -8
The bailout was for the benefit of the unions and Obamacare is part II of the payoff.
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