GM playing a money game? - ModernCamaro.com - 5th Generation Camaro Enthusiasts
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post #1 of 7 Old 04-22-2010, 09:54 PM Thread Starter
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GM playing a money game?

http://wsbradio.com/blogs/jamie_dupr...oney-game.html

Interesting article

GM Money Game By Jamie Dupree
@ April 21, 2010 1:45 AM


General Motors will make a big splash in the news today by announcing that the automaker will repay several billion dollars loans from the federal government earlier than expected. But it's not really coming out of the GM wallet.

The issue came up yesterday at a hearing with the special watchdog on the Wall Street Bailout, Neil Barofsky, who was asked several times about the GM repayment by Sen. Tom Carper (D-DE), who was looking for answers on how much money the feds might make from the controversial Wall Street Bailout.

"It's good news in that they're reducing their debt," Barofsky said of the accelerated GM payments, "but they're doing it by taking other available TARP money."

In other words, GM is taking money from the Wall Street Bailout - the TARP money - and using that to pay off their loans ahead of schedule.

"It sounds like it's kind of like taking money out of one pocket and putting in the other," said Carper, who got a nod of agreement from Barofsky.

"The way that payment is going to be made is by drawing down on an equity facility of other TARP money."

Translated - they are using bailout funds from the feds to pay off their loans.

For you and me, that might be like using one credit card to pay off another, eh?

"When do you think we'll have really good news from GM?" Carper asked.

"I don't have a crystal ball on that Senator," Barofsky replied.

Most of Uncle Sam's bailout money that was given to GM has now been turned into stock in the U.S. automaker.

"The assumption is that, over time, hopefully the value of the stock will appreciate," said Carper.

Long term that could prove to be a money-making investment for the feds - or if things go the wrong way for General Motors - a big, fat loss for Uncle Sam.

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post #2 of 7 Old 04-23-2010, 12:11 AM
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Kind of the same thing I said the other day in that other thread.

https://www.moderncamaro.com/forum/sh...3&postcount=12

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post #3 of 7 Old 04-23-2010, 12:31 AM
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Regardless, the IPO will still pay the government back.
Done deal when that happens.

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post #4 of 7 Old 04-23-2010, 06:20 AM
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Quote:
Originally Posted by OctaneSS/RS View Post
Regardless, the IPO will still pay the government back.
Done deal when that happens.
It's still just as misleading as "our pedals don't stick."

Politics and business. It's just how it is!

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post #5 of 7 Old 04-23-2010, 06:36 AM
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Quote:
Originally Posted by demonspeed View Post
It's still just as misleading as "our pedals don't stick."

Politics and business. It's just how it is!


I dont want to get into politics but I cant wait for it to be a real announcement that the gov is paid back. The headline is very misleading I was like holy crap I first read then after reading more wasnt as impressed.What can I say im glad GM is still here

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post #6 of 7 Old 04-23-2010, 06:36 AM
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i know they wanna get that IPO out and this will help them do it. like Octane said, that's the real solution. it's more like switching your credit debt to a card that's offering 0% for a year so you can pay it off quicker



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post #7 of 7 Old 04-23-2010, 06:38 AM Thread Starter
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The $$ shell game

GM still needs to turn a profit, maybe we will see that yet in 2010 - still a long road ahead.

On a side note, saw a partially camo'd Volt rolling through town the other day

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