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General Motors Is Headed For Bankruptcy -- Again
Forbes ^ | 08/16/2012 | Louis Woodhill

Posted on 08/16/2012 7:28:35 AM PDT by SeekAndFind

President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; Government; News/Current Events; US: Michigan
KEYWORDS: bailout; bankruptcy; fubo; generalmotors; gm; michigan; uaw; union

1 posted on 08/16/2012 7:28:40 AM PDT by SeekAndFind
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To: SeekAndFind
Here we go again!!
2 posted on 08/16/2012 7:32:21 AM PDT by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
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To: SeekAndFind

but, but, but, but, he fixed it...this is totally “unexpected”. The little boy king don’t care, he’ll avoid GM like a birth certificate.


3 posted on 08/16/2012 7:38:45 AM PDT by Doogle ((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: SeekAndFind
Nothing much new here. King Obama has dumped billions in these failed stupid business and we will never recover the money. Failed businesses without constructive change, especially dumping Unions, will always go to the garbage can.
4 posted on 08/16/2012 7:44:00 AM PDT by Logical me
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To: SeekAndFind

Let it die!


5 posted on 08/16/2012 7:44:15 AM PDT by X-spurt (It is truly time for ON YOUR FEET or on your knees)
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To: SeekAndFind

Buying GM stock is like tossing your money down the toilet.

Naxt time they get in a bind they will screw the stockholders again.


6 posted on 08/16/2012 7:52:02 AM PDT by Venturer
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To: Venturer

I’m shocked......


7 posted on 08/16/2012 7:57:08 AM PDT by Fred911 (YOU GET WHAT YOU ACCEPT)
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To: SeekAndFind

“Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.” - Barack Hussein Obama


8 posted on 08/16/2012 7:58:59 AM PDT by Proud2BeRight
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To: SeekAndFind

Since the UAW now”owns” GM, does that mean its assets, including the pension fund and all the resorts, will be open to seizure to pay debts?


9 posted on 08/16/2012 8:00:56 AM PDT by VanShuyten ("a shadow...draped nobly in the folds of a gorgeous eloquence.")
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To: SeekAndFind

Excellent article. Thanks for the post!


10 posted on 08/16/2012 8:01:02 AM PDT by Dryman (Define Natural Born Citizen)
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To: SeekAndFind

Buffett will buy more shares in GM. He still owes the Govt for the bailout of Goldman and getting him on board just before it happened.


11 posted on 08/16/2012 8:02:50 AM PDT by PGR88
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To: SeekAndFind

It was always assumed GM would go bankrupt again.

The first bankruptcy was to stongarm the bond holders and give the unions a “pump and dump” equity to pull cash out of the dead corporate body.

Now it will HOPEFULLY be an unvanished bankrupcy where the union contracts are dumped as they should have been in the first place.


12 posted on 08/16/2012 8:03:47 AM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: SeekAndFind

BOHICA and FUBO!


13 posted on 08/16/2012 8:07:34 AM PDT by TurboZamboni (Looting the future to bribe the present)
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To: longtermmemmory

I assume that will depend on who the president is.


14 posted on 08/16/2012 8:13:03 AM PDT by John W (Viva Cristo Rey!)
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To: SeekAndFind
Wonder if Warren Buffett had any shares of GM before the first bailout/dealership-cancellation/shareholder-screwing.

Wonder if he has any now.

15 posted on 08/16/2012 8:23:02 AM PDT by N. Theknow (Kennedys=Can't drive, can't ski, can't fly, can't skipper a boat, but they know what's best for you.)
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To: SeekAndFind

Da scheppert nix


16 posted on 08/16/2012 8:23:14 AM PDT by Osage Orange ("Were we directed from Washington when to sow, and when to reap, we should soon want bread.")
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To: SeekAndFind

My Mom traded in her Buick for a Nissan. My sister traded in her Pontiac for a Toyota. I traded in my Buick for a Subaru. My neice traded in her Chevy for a Kia. We used to be a GM family. We believe in the right to organize and have collective bargaining. Unions electing Democrats to plunder the public treasury to give money to the unions is criminal.


17 posted on 08/16/2012 8:23:41 AM PDT by blueunicorn6 ("A crack shot and a good dancer")
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To: SMARTY
Actually, if the government burned hundred dollars bills, it would decrease the money supply and make everyone holding dollar denominated assets richer. If, otoh, the government printed hundred dollar bills, it would make very one who owns dollar denominated assets, richer.
18 posted on 08/16/2012 8:23:49 AM PDT by Lonesome in Massachussets (The Democratic Party strongly supports full civil rights for necro-Americans!)
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To: SeekAndFind

Forget that the 2013 Malibu is a step backward for GM. The reality is that leftists overwhelmingly buy foreign-branded vehicles. Add to that all the newly minted anything-but-GM crowd and you have a perfect storm. I hope the UAW is happy.


19 posted on 08/16/2012 8:26:41 AM PDT by BillyBonebrake
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To: John W
I assume that will depend on who the president is.

Maybe not.

http://thehill.com/blogs/ballot-box/presidential-races/224371-romney-campaign-claims-auto-bailout-was-his-idea

I'd like to think it might matter, but perhaps the Etch-A-Sketch will fall on the side of the taxpayers.

20 posted on 08/16/2012 8:27:16 AM PDT by Colonel_Flagg (Conservatism is not a matter of convenience.)
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To: SeekAndFind

Obumo may be a dope touting his saviourship of GM BUT
both Rinos and Dems went along with the initial paniced stupidity.
Therefore, this particular foulup isn’t going to get much exposure. It is, however, an excellent example of elite,
ill-informed, top-down gov’t management. Obumo’s solution to GM’s “problem” was politically inspired - not the way successful businesses operate.


21 posted on 08/16/2012 8:33:12 AM PDT by bossmechanic (If all else fails, hit it with a hammer)
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To: SeekAndFind
I have driven Chevy Suburbans since they were a 3 door crew truck and had not yet been named Suburbans. I traded my last one for a Chevy Tahoe when the first one came out. I had a ‘05 Tahoe when I heard the Obama administration announce that we would all have to drive SmartCars or some such little car. I went that day and traded my ‘05 for a ‘09 Tahoe. I have never been sorry and I am taking really good care of it so it will last me till I am too old to drive, whenever that happens!
22 posted on 08/16/2012 8:36:41 AM PDT by Ditter
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To: SeekAndFind

Calling Captain Obvious


23 posted on 08/16/2012 8:44:51 AM PDT by ChildOfThe60s (If you can remember the 60s....you weren't really there)
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To: SeekAndFind

Wait one darn minute. A year ago GM had an advertisement saying they paid off all the Government Loans.

If you can’t believe Commercials, what can you believe?


24 posted on 08/16/2012 8:59:04 AM PDT by Kickass Conservative (Republicans Hope people are Smart, but Democrats Know people are Stupid.)
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To: SeekAndFind

I have a 2001 GMC Sierra C2500 Crew Cab Pickup.
Bought it new in OCT 2001 after the SEP 11 attacks.
I’m through with GM completely, mostly due to the bailouts, but also because this current truck isn’t near as well made as the 89 Super Cab that preceded it.

Its Ford or Foreign from now on.


25 posted on 08/16/2012 8:59:04 AM PDT by OriginalChristian (The end of America, as founded, began when the first Career Politician was elected...)
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To: BillyBonebrake

You are right on the money. I travel pretty much every week and about half the time my rental car is a Chevy. Truthfully they’re nice enough cars. They can be competitive car vs car.

The problem is not the product; the problem is what ‘they’ have done to the GM BRAND.

To your point about the “newly minted anything-but-GM crowd” too many in the market would buy anything BUT a GM, and the Progressives all want to drive their foreign marques. Who’s left? A much smaller available market.

GM and the gummint have ruined the stature of the GM brand. THAT is a HUGE loss in value/goodwill. The stock NEEDS to be lower.


26 posted on 08/16/2012 9:01:12 AM PDT by Blueflag (Res ipsa loquitur: non vehere est inermus)
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To: SeekAndFind

Just in time for the RNC Convention and the preezy debates...


27 posted on 08/16/2012 9:25:03 AM PDT by Hotlanta Mike (Resurrect the House Committee on Un-American Activities (HUAC)...before there is no America!)
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To: Kickass Conservative
If you can’t believe Commercials, what can you believe?

How right you are, my friend, how right you are.


28 posted on 08/16/2012 9:26:03 AM PDT by Dahoser (Separation of church and state? No, we need separation of media and state.)
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To: SeekAndFind; stephenjohnbanker; DoughtyOne; Gilbo_3; NFHale; Impy; LMAO; dools0007world; dforest; ..
RE :”President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

More taxpayer $$$$ money down a rathole ping!

Any chance that Romney/Ryan will make this an issue?

29 posted on 08/16/2012 9:45:17 AM PDT by sickoflibs (Romney is still a liberal. Just watch him. (Obama-ney Care ))
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To: sickoflibs

well good. I am fed up with them. Unions fail companies all the time. why do you think our auto parts come from other countries.UNIONS. Obama is a UNION prez. That makes him a fail to start with. Union member better realize evenually Unions will cause their jobs to end.


30 posted on 08/16/2012 10:51:57 AM PDT by dalebert
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To: SeekAndFind
but the stock closed at only $20.21/share on Tuesday.

Flashback:

Romney: U.S. should sell GM stake

Mitt Romney says yes. And he wants President Obama to do it now...

...GM shares currently sit at $25.40, far below the $51 per share price necessary for taxpayers to break even...

31 posted on 08/16/2012 11:00:53 AM PDT by Dan Zachary
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To: SeekAndFind

The administration is trying to pretend that GM was “rescued” and they have criticized Romney for saying that they should have been allowed to go into bankruptcy. Despite the attempts to hide the fact, they did indeed go into bankruptcy but it was a politically driven process with little attention given to the structural problems which caused the initial failure. A traditional bankruptcy as advocated by Romney would have had a good chance of saving GM as a viable company. It is quite likely that GM will have to go through a legitimate bankruptcy but will never recover what was lost through the bastardized process forced on them by Oboma.


32 posted on 08/16/2012 11:22:24 AM PDT by etcb
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To: sickoflibs; All
A picture that is worth a thousand teleprompted words...WHAT an effin' LOSER!

33 posted on 08/16/2012 11:39:19 AM PDT by mkjessup (Jimmy Carter is the Skidmark in the panties of American history, 0bama is the yellow stain in front!)
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To: sickoflibs

“Any chance that Romney/Ryan will make this an issue?”

Well, it sure won’t stop Obamy from lying and telling us what a success he made of GM, will it?


34 posted on 08/16/2012 11:54:53 AM PDT by AuntB (Illegal immigration is simply more "share the wealth" socialism and a CRIME not a race!)
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To: AuntB
RE “Any chance that Romney/Ryan will make this an issue?”
.....
Well, it sure won’t stop Obamy from lying and telling us what a success he made of GM, will it?”

It would be nice to have a party that actually believes that this is wrong.

35 posted on 08/16/2012 12:27:52 PM PDT by sickoflibs (Romney is still a liberal. Just watch him. (Obama-ney Care ))
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To: sickoflibs; SeekAndFind; stephenjohnbanker; DoughtyOne; Gilbo_3; NFHale; Impy; LMAO; ...

” More taxpayer $$$$ money down a rathole ping! (GM)

Any chance that Romney/Ryan will make this an issue? “

Too early to tell.


36 posted on 08/16/2012 12:47:04 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: cripplecreek; AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; ...

Thanks sickoflibs.


37 posted on 08/16/2012 3:55:46 PM PDT by SunkenCiv (https://secure.freerepublic.com/donate/)
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To: Springman; cyclotic; netmilsmom; RatsDawg; PGalt; FreedomHammer; queenkathy; madison10; ...
Sometimes bankruptcy needs to happen. We tied it the marxist way and it failed. Now lets try it the free market way.

Image Hosted by ImageShack.us
38 posted on 08/16/2012 4:01:21 PM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: SeekAndFind

Maybe they’d get somewhere if they weren’t forced to sell Volts and other such nonsense. No one, or very few people, can afford those designer cars that the gov’t is forcing on the corporations and customers.


39 posted on 08/16/2012 4:25:21 PM PDT by madison10 (You can ignore reality, but you can’t ignore the consequences of ignoring reality)
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To: stephenjohnbanker
I suspect there would be a bailout under Romney/Ryan BUT it would come with a condition that they restructure, sell assets, cut the dead wood etc.
40 posted on 08/16/2012 4:30:20 PM PDT by cripplecreek (What does it profit a man if he gains the whole world but loses his soul?)
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To: SeekAndFind

A quick glance at Yahoo Finance shows analysts rate GM Strong Buy (6), Buy (9) or Hold (4). EPS estimates for 2013 exceed 2012. Cash and marketable securities are up from year end. I haven’t delved in to the term structure of their LT debt, but at first glance levels appear reasonable. All the OEMs have gotten better at managing production and inventories, and that is contributing to improved pricing. As a result of the recession, they all have also significantly reduced cost structure. Lastly, there remains significant pent-up demand for autos that should boost industry sales levels next year. Lastly, basing a bk foercast on the sales of a car that has yet to show up in showrooms for a company of this size seems pretty weak. I’m guessing any GM bankruptcy is a long ways off.


41 posted on 08/16/2012 6:24:56 PM PDT by nc28205
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To: nc28205

At what level do you plan on buying stocks?
Series.


42 posted on 08/16/2012 6:32:36 PM PDT by right way right (What's it gonna take?)
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To: right way right

>>>At what level do you plan on buying stocks?

I don’t buy individual company stocks. I am invested in mutual funds. But keep in mind that the stock price is a refelection of expected future earnings, not necessarily credit events. While earnings expectations may have be lower than they were ealier in the year, they are still positive. Assuming there isn’t a large maturity due in the near future that GM will be unable to re-finance in what is a very issuer friendly environment, there is no reason to think that bankruptcy is imminent.


43 posted on 08/16/2012 6:55:19 PM PDT by nc28205
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To: SeekAndFind

The problem here is not specific to General Motors although I OPPOSED all BAILOUTS because I never bought the elitist bull crap about too big to fail and I believe that Gubmint should not declare Lehman Bros. a loser and heavily Saudi invested Citibank a winner through the use of selective bailouts.

The problem with GM is very basic. The work force is SHRINKING and the population is growing both through rightful birth and wrongful illegal immigration.

Few business will prosper when the population is growing and the workforce is diminishing.

Of course that is a classic definition of socialism, increasing consumers and diminishing producers.


44 posted on 08/16/2012 7:14:56 PM PDT by Biblebelter
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To: Doogle

The little boy king don’t care, he’ll avoid GM like a birth certificate.

LOL!!


45 posted on 08/17/2012 10:02:00 PM PDT by TomasUSMC ( FIGHT LIKE WW2, FINISH LIKE WW2. FIGHT LIKE NAM, FINISH LIKE NAM)
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To: cripplecreek; All
We tied it the marxist way and it failed. Now lets try it the free market way.

BUMP and thread BUMP!

46 posted on 08/18/2012 9:36:26 AM PDT by PGalt
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Comment #47 Removed by Moderator

To: Kickass Conservative

I know two of obama’s biggest worshippers who BELIEVE GM paid the loan back. I don’t think they understand that GM took out another loan to pay off the first one. Neither of them has ever owned a home. Therefore they have no idea how a refinance works.


48 posted on 09/21/2012 2:04:26 PM PDT by Terry Mross (The Clintons seem to be very afraid of obama. Do they owe him their souls?)
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To: SeekAndFind

http://www.forbes.com/sites/boblutz/2012/08/17/chicken-littles-second-gm-bankruptcy-the-gold-medal-for-silly-op-ed-pieces/


49 posted on 09/21/2012 2:08:34 PM PDT by nascarnation (Defeat Baraq 2012. Deport Baraq 2013)
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