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Thread: GM Pays off its Bailout Loans

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by Dezaad View Post
    And, there is no changing the fact that the government will eventually sell the part of GM that we now own, and will recover most, perhaps all and then some, of the money that we spent in purchasing part of GM.
    And how do you figure that?

    You people just don't want other people to realize that the bailouts, in all the forms they came in, have gone generally well, and that they saved us all from abject misery. Cuz that would affect the upcoming elections.
    You're right. I don't think they have gone well at all and to pretend they have is amusing to say the least.
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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by texmaster View Post
    Again, No it is not.

    They only paid back part of the loan.

    Loan- An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time.

    loan Definition

    So again it is not factually correct they paid back the loan. Just because the government was stupid enough to give them interest free money that doesn't change the fact it is still a loan and 43 Billion has not been paid back.
    Since when is taking out an equity stake in a company refered to as a loan?
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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by Lord Tammerlain View Post
    Since when is taking out an equity stake in a company refered to as a loan?
    Read the definition of loan again.
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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by Dezaad View Post
    You people just don't want other people to realize that the bailouts, in all the forms they came in, have gone generally well, and that they saved us all from abject misery.
    you people---LOL!

    sure, the bailouts are bodacious

    that's why obama, the bountiful poobah of abundanza, today RUNS AWAY from the word

    Obama on Wall Street: A vote for reform is a vote to stop tax-payer bailouts - TheHill.com

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by texmaster View Post
    And how do you figure that?


    Figure what? That we will sell the stock that we own in GM? Or that we will get around 43 billion for it?

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by texmaster View Post
    Read the definition of loan again.
    When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

    They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.

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    Re: GM Pays off its Bailout Loans

    Fox News article on the GM bailout repayment...

    "The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials."
    Sen. Chuck Grassley

    Hmmmm...interesting...

    Still, atleast they didn't blow taxpayer dollars. (Okay, so I was trying to soften the blow... )

    Quote Originally Posted by Dezaad View Post
    When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

    They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.
    The following is a short exerpt from the bailout agreement between the U.S. and Canadian governments and GM:

    - The U.S. Treasury is prepared to provide approximately $30.1 billion of debtor in possession financing to support GM through an expedited chapter 11 proceeding and transition the new GM through its restructuring plan. The U.S. Treasury does not anticipate providing any additional assistance to GM beyond this commitment. In exchange for funds already committed by the U.S. Treasury and the new injection of $30.1 billion, the U.S. government will receive approximately $8.8 billion in debt and preferred stock in the new GM and approximately 60% of the equity of the new GM. The U.S. Treasury will also have the right to appoint the initial directors other than those that will be selected by the VEBA and the Canadian government.

    The Governments of Canada and Ontario will participate alongside the U.S. Treasury by lending $9.5 billion to GM and New GM. The Canadian and Ontario governments will receive approximately $1.7 billion in debt and preferred stock, and approximately 12% of the equity of the new GM. Based on its substantial financial contribution, the Canadian government will also have the right to select one initial director
    The summary brief as reported in the Chicago Sun-Times (June 1, 2009) can be read here.
    Last edited by Objective Voice; 04-23-10 at 06:58 PM.

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by Objective Voice View Post
    Fox News article on the GM bailout repayment...


    Sen. Chuck Grassley

    Hmmmm...interesting...

    Still, atleast they didn't blow taxpayer dollars. (Okay, so I was trying to soften the blow... )
    Actually, this is still blowing taxpayer dollars. Essentially, this is what happened, according to Grassley's claims (exact figures are off):

    GM received 8 Billion in loans, and 43 billion in cash from selling shares of GM stock to the government. There was also some unused money, say 7 Billion that went into an escrow account. This money was intended to be used by GM if needed. GM took out this money and repaid its loan.

    This is still blowing tax dollars - the money didn't magically appear.

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by Dezaad View Post
    When you buy stock (equity) in a company, you are not loaning them money. You are giving them money and they are giving you part ownership in the company in exchange.

    They are under no contract to ever pay you back. We bought stock in GM for about 43 billion. We will sell the stock on the New York Stock Exchange. We may get 2 Billion for it. We may get 100 Billion for it. It will depend on how much the stock is worth when we sell it.
    This is factually incorrect. We first lent the money to G.M. This loan was then converted to an equity stake. GM is still losing money and has a huge underfunded pension liability.

    Unlike the deal most of the banks were forced to take and which the government has already made money this deal will be a loser.

    Just a question for the folks here. Is it a debate when people just make up facts? Probably for FOX or MSNBC, but not sure about the standards here.

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    Re: GM Pays off its Bailout Loans

    Quote Originally Posted by washunut View Post
    This is factually incorrect. We first lent the money to G.M. This loan was then converted to an equity stake. GM is still losing money and has a huge underfunded pension liability.

    Unlike the deal most of the banks were forced to take and which the government has already made money this deal will be a loser.

    Just a question for the folks here. Is it a debate when people just make up facts? Probably for FOX or MSNBC, but not sure about the standards here.
    While I wasn't aware that there was first a loan that was converted to an equity stake, it makes no difference. It is still a fact that GM is under no obligation to pay the 43Billion and does not intend to. It is still a fact that we will sell the equity on the open stock market, and that whatever we get for selling those shares is all that we will get toward the 43 Billion. Whatever it was to start with, it is no longer a loan.

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