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Thread: GM's return to top continues as it rejoins S&P 500

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by OpportunityCost View Post
    I take it you are aware that with a first lien holder position it doesnt matter? If its bankruptcy they get first rights to proceeds, if its reorganization, they are first in line to made whole through debt repayment.

    Obama and the DOJ (which we can totally trust, right?) stepped in and applied political pressure to the lawyers firms representing those bondholders and they recieved around 13cents on the dollar and the unions, in a non preferred position--but had their nose up the President's ass--recieved 90 cents on the dollar.

    Equal representation under the law indeed. We are ****ed when political support is used to undermine court precendent as old as the country. Because it means political favor is more important than the law.
    Cite for your numbers please...

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by apdst View Post
    You still trying to sell those lies about tax cuts?
    I'm not trying to sell anything apdst.

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by ernst barkmann View Post
    GM stock must reach $53 a share for the government to recoup its money.

    it has been selling stock well under $53
    While that might be true in a sense, think about the jobs the government saved, and the faith in the government to keep major corporations afloat in a time of need. Who knows what would have happened to the American car market if GM went under. Do we simply import and lose all manufacturing jobs? While I agree monetarily that the government has not broken even yet the physiological boost GM's recovery has given the American manufacturing industry is something that cannot be priced.
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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by iacardsfan View Post
    While that might be true in a sense, think about the jobs the government saved, and the faith in the government to keep major corporations afloat in a time of need. Who knows what would have happened to the American car market if GM went under. Do we simply import and lose all manufacturing jobs? While I agree monetarily that the government has not broken even yet the physiological boost GM's recovery has given the American manufacturing industry is something that cannot be priced.
    There are other automobile manufacturers in the United States, Ford among them, who now have to compete against the deep pockets of government. $17 trillion in debt and the government is financing an industry where there is no shortage of vehicles, no shortage of cars on the road? How does that make any sense at all?

    There was the same logic about "creating jobs" in solar companies, remember the speeches?, and billions just went to friends of the government, just as it always does. How can corruption in government ever be stopped when the electorate encourages it?

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by upsideguy View Post
    Cite for your numbers please...
    You first. Show me that first lien holders position matters based on the type of bankruptcy.

    Nah, Ill toss a few sources at you. I expect the same in return.

    Bondholder furious over GM bankruptcy – American Morning - CNN.com Blogs
    G.M. Bondholders: We're Not Seeking Bankruptcy - NYTimes.com
    The Auto Bailout and the Rule of Law > Publications > National Affairs
    Old GM Bondholders Getting Shares in New General Motors May Depress Price - Bloomberg

    Some excerpts:
    Well, what happened, John, I got this booklet at the original thing. This is a 200-page booklet and they sent this in the mail and the offering was two shares of stock for every $1,000. That's 140 shares of stock. They said originally in the booklet it was going to be 225 shares, but as you kept reading the booklet it said they were going to convert that to 101 reverse-split, which would be two shares of stock. $70,000 for 140 shares of stock.
    Of the two proceedings, Chrysler's was clearly the more egregious. In the years leading up to the economic crisis, Chrysler had been unable to acquire routine financing and so had been forced to turn to so-called secured debt in order to fund its operations. Secured debt takes first priority in payment; it is also typically preserved during bankruptcy under what is referred to as the "absolute priority" rule — since the lender of secured debt offers a loan to a troubled borrower only because he is guaranteed first repayment when the loan is up. In the Chrysler case, however, creditors who held the company's secured bonds were steamrolled into accepting 29 cents on the dollar for their loans. Meanwhile, the underfunded pension plans of the United Auto Workers — unsecured creditors, but possessed of better political connections — received more than 40 cents on the dollar.
    When U.S. Bankruptcy Court releases the warrants and stock through a trust, bondholders will collectively get 136.4 million warrants for one share each at $10 a share and an equal amount at $18.33 a share, said Wilmington Trust, which is based in Wilmington, Delaware.

    Owners of old GM bonds must notify Wilmington Trust by April 15 to get stock and warrants on April 21. If they notify Wilmington later, the bondholders will get their shares and warrants at a later date.

    Currently, Motors Liquidation has about $30 billion in claims allowed by bankruptcy court, of which about $29 billion are from the bondholders, said a person familiar with the matter.
    Depends on what source you use, and what the valuation of the stocks are, but the unions were given better position in the new company than their agreements warranted...legally.

    Just an FYI but current GM stock is $34.95/share.

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by apdst View Post
    You must have gone insane with rage when Obama shut down offshore drilling.
    Domestic oil and energy production has, in fact, increased during Obama's term, while imports have dropped.

    If his goal was to kill the US oil industry, he did a pretty shoddy job of it.

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by iacardsfan View Post
    While that might be true in a sense, think about the jobs the government saved...
    Actually, I'd say EB does have a point. It's likely the US government will take a loss on the investment.

    However, there are lots of issues to balance out, including how long anyone actually wants the government to own huge tranches of private company stock. IMO it's better for the government to divest itself of ownership sooner rather than later, although it means a loss.

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by Grant View Post
    There are other automobile manufacturers in the United States, Ford among them, who now have to compete against the deep pockets of government.
    The problem with your argument here is that if GM and Chrysler went under, so would most of the companies that supply parts to all of the Big 3. Ford would have been sunk right along with GM & Chrysler.


    There was the same logic about "creating jobs" in solar companies, remember the speeches?, and billions just went to friends of the government....
    Actually, the kinds of busts we saw are entirely typical of investment in a new field, regardless of whether the investment is public, private or both.

    The Dot Com boom, for example, was a wholly private affair, with venture capitalists throwing money at companies with no track record, run by kids with no experience, and no goals beyond issuing an IPO whose stock price pops on the first day (aka the "exit strategy"). Nepotism, favoritism, drug use, insane wastes of money, unsustainable stock prices, unjustifiable speculation -- the excess was off the scale, and very few companies actually survived. The investment in renewable energy is downright tame compared to the Dot Com explosion.

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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by pbrauer View Post
    Without the help, first from President Bush, then President Obama GM would likely be gone now.
    In the mean time, the only one of the former great three American automakers to still deserve to be considered as such, Ford continues to prosper and thrive on the quality and value of its products and the soundness of its business decisions rather than on its ability to beg for and receive government handouts.
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    Re: GM's return to top continues as it rejoins S&P 500

    Quote Originally Posted by Fenton View Post
    Allot of GM bond owners got burned by Obama. People that invested in GM, that helped them grow and in the end the Union, who caused their bankruptcy wound up getting the spoils.

    I still say GM's heading for the inevitable bankruptcy. Obama's free money just pushed the inevitable down the road a bit.
    It wasn't Obama's money, and it wasn't free. It was your money and my money and every other taxpayer's money
    The five great lies of the Left Wrong:
    We can be Godless and free. • “Social justice” through forced redistribution of wealth. • Silencing religious opinions counts as “diversity”. • Freedom without moral and personal responsibility. • Civilization can survive the intentional undermining of the family.

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