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Old May 11th, 2010, 03:18 PM   #16
GreaseMonkey
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Originally Posted by ScOoTeR View Post
It is hard to understand, especially in these days of such creative bookkeeping.

On one hand, the government totally bailed out GM with loan money (thank you, taxpayers ), however, the bulk of the money was converted to ownership with "stock" given to the government in exchange.

Now, the money sitting in GM's checkbook - even though it came from the government - is GM's money, as "stock" was given as compensation. The suits at GM see this as "our money" and not as a government loan because of this exchange. So - in their minds, using funds from this account to pay back the PORTION of original loans (not converted to "stock") plus interest to the US and Canada is completely legit.

Notice I use "stock" - as the government holds "shares" of GM that are essentially WORTHLESS compared to the money invested by the taxpayers - until GM goes public and can actually issues shares and start selling stock as a public company.

IMHO, publicizing the repayment was an attempt to show improvement and recovery here at GM, without having people trying to decipher "one time deduction for VEBA/restructuring/godzilladamage/etc" type B.S. that gets written off in earnings reports. The one thing they downplayed (IMHO) was the risk that GM was using government funds to pay back the government.

They will always be (theoretically) 60% of the government's funds as long as the USA holds "stock" in GM. I believe the initial attempt was to create a positive buzz to build upon for when the IPO launches later this year.
Unfortunately, I see it as digging ourselves a deeper hole to climb out of / "one step forward, two steps back" situation that GM suits completely missed before they started touting how great we were doing by paying back outstanding loans with interest.



Haven't seen the commercial - don't watch television - but I imagine that it could downright piss people off.
I'm no financial expert but that sounds like money laundering.
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