Early Reviews of Obama's GM 'Gamble' Don't Look Good

[cobra de capell]

Early Reviews of Obama's GM 'Gamble' Don't Look Good

A Rasmussen poll released Sunday pegged support for the GM plan at just 21 percent, with 67 percent opposed. A clear majority of respondents would rather let the company go out of business than provide any more government funding.

http://voices.washingtonpost.com/44/...as_gm_gam.html
_____

I'm thinking that by the mid-term election in 2010 billions more taxpayer dollars will have been pumped into GM with no end in sight to the dollars needed to support not really GM, but the UAW.

I don't think anyone here would personally invest in GM at this point in time - but Obama has, big time - for all of us.

Millions of Americans seem turned off by these events - perhaps Millions will avoid buying GM products - possibly buying Ford products, etc.

I suspect that keeping whatever you have will be the thing to do.

It would have been cheaper, and much less messy, if GM had never received a cent of “bailout” money.

Back in 1979, Chrysler was on the ropes, but they took a loan guarantee from the Federal government, and with this guarantee, went to the commercial money lenders, and under the leadership of Lee Iacocca, returned to viability during the decade of 1980-1990. Mr. Iacocca has drawn upon the lessons learned in those years, and recently released his recommendations with the book, ‘Where Have All the Leaders Gone?’

Apparently, not many of these recommendations are being taken seriously, if they are considered at all.

Even ignoring the fact that patriotic Americans, GM's customer base, will boycott Government Motors, how could GM survive long enough to change their direction, let alone to find a profitable direction? No sensible person will loan GM money in the bond market, not with the rule of law suspended in favor of UAW interests. No sensible person will buy a stake in a company with a negative net asset value. GM will burn through $10B a month in our tax dollars until it becomes too politically costly for obama to continue paying back his UAW campaign donors, and then GM will die - long before any change in market or management strategy has time to work. There is no other possibility.

[FWB]

time to buy ford stock....

[bomelia]

Ford appears VERY prescient in staying out of the bailout deal. But, The government can still force Ford out of business. Watch for it in its disguise.

Mike

[cobra de capell]

Originally Posted by bomelia

Ford appears VERY prescient in staying out of the bailout deal. But, The government can still force Ford out of business. Watch for it in its disguise.

Mike

Fleet sales is were Government Motors can do Ford in. It's interesting that if the feds put out a bid for new cars and both GM and Ford submit a bid - the feds own GM, so therefore.......

I'll bet that the feds will have well over $100 billion invested in GM by year-end, but the red ink will continue.....

[joe g]

By this tme next year we will
think 2009 was easy!
The gov owns 5 of the largest banks, the biggest insurance company in the WORLD and now GM. We are printing money s if its a Monopoly game. HYPER INFLATION will be here by mid 2010. Mortgage rates of 25% will seem good
joeg

[SP01715]

Originally Posted by joe g

By this tme next year we will
think 2009 was easy!
The gov owns 5 of the largest banks, the biggest insurance company in the WORLD and now GM. We are printing money s if its a Monopoly game. HYPER INFLATION will be here by mid 2010. Mortgage rates of 25% will seem good
joeg

I agree 100%. I warned friends of the current crash back in 2002 an they all thought I was crazy. Now I feel the same as you. I think the worst has yet to come.

[bomelia]

Well, every now and again, I stop and think about all that has happened... and it really scares me. Things are changing so fast. Sorros is finally getting what he wanted. And nobody is stopping him.

Mike

[cobra de capell]

But, health insurance is next and BO seems to think that it needs doing by the end of Summer. He may be also thinking that 'whatever' needs doing by the mid-term election - if the Republicans can take over the house or senate a lot of 'change' will stop or at least slow down. If not, we are screwed.

There's a hedge fund out there that is placing a bet on hyperinflation - it had $400 million in it late last year - now, $10 billion.

[Wayne Maybury]

I read a very interesting article this morning from the New York Times. Basically the author states that there is no way for the government to now get out of GM and there is no way for GM to become profitable. He feels that GM will continue to lose money and keep going back to Washington asking for more and more. His opinion is that it would be political suicide for any government, especially for Democrats, to pull the plug so they will just keep funding further GM losses.

I have always driven Fords but even if I were a GM person, I could not see myself buying another GM product. I think that they are going to have a very difficult time getting the general public to purchase their cars.

Wayne

[cobra de capell]

Originally Posted by Wayne Maybury

I read a very interesting article this morning from the New York Times. Basically the author states that there is no way for the government to now get out of GM and there is no way for GM to become profitable. He feels that GM will continue to lose money and keep going back to Washington asking for more and more. His opinion is that it would be political suicide for any government, especially for Democrats, to pull the plug so they will just keep funding further GM losses.

I have always driven Fords but even if I were a GM person, I could not see myself buying another GM product. I think that they are going to have a very difficult time getting the general public to purchase their cars.

Wayne

My understanding is that there is a New GM and an Old GM, so perhaps the New GM can be profitable at some point in time - but, what about the Old GM? Car companies run by the federal government - it's going to be a disaster.

[Wayne Maybury]

Originally Posted by cobra de capell

My understanding is that there is a New GM and an Old GM, so perhaps the New GM can be profitable at some point in time - but, what about the Old GM? Car companies run by the federal government - it's going to be a disaster.

Won't the new GM rise from the ashes of the old GM as it fades from memory? Have you ever seen anything turn a profit with the government running it? That was one of the points raised in this article. With the government in charge, there is little hope that GM will ever be able to break even. I guess that I should be saying "governments" because in addition to the US Federal Government, the Governments of Canada and Ontario have also jumped into the fray and have handed out lots of the public's money to this project.

Wayne

[427sharpe]

Originally Posted by cobra de capell

But, health insurance is next and BO seems to think that it needs doing by the end of Summer. He may be also thinking that 'whatever' needs doing by the mid-term election - if the Republicans can take over the house or senate a lot of 'change' will stop or at least slow down. If not, we are screwed.

There's a hedge fund out there that is placing a bet on hyperinflation - it had $400 million in it late last year - now, $10 billion.

You hit the nail; impetus created by fear of voter backlash in the midterms. A republican gain will (hopefully) rein in this foolishness. BUT; always the possibility that the 'neo-cons' get in and try to outspend BoBo!

[cobra de capell]

Originally Posted by 427sharpe

You hit the nail; impetus created by fear of voter backlash in the midterms. A republican gain will (hopefully) rein in this foolishness. BUT; always the possibility that the 'neo-cons' get in and try to outspend BoBo!

"neo-cons" have no record of excessive spending, so why include them? It's the RINOS in Congress that increased spending, along with the demobulbs, during the W years.

We need more Conservatives in Congress - small government types.

[427sharpe]

Originally Posted by cobra de capell

"neo-cons" have no record of excessive spending, so why include them? It's the RINOS in Congress that increased spending, along with the demobulbs, during the W years.

We need more Conservatives in Congress - small government types.

Mr. Bush (the neo-con) started this crap with his paltry 700 Billion, and in my book thats still damned excessive!
And yes, we need more true conservatives in Congress.
Finally, the government via BoBo has a plan...to forgive all the cash pumped into them so far, as well as what is surely coming.

[VRM]

Originally Posted by 427sharpe

And yes, we need more true conservatives in Congress.

Yep, there is maybe a handful in there right now. The rest have fooled Republican voters into thinking that the rest of them are conservatives.

Steve

[cobra de capell]

Originally Posted by 427sharpe

Mr. Bush (the neo-con) started this crap with his paltry 700 Billion, and in my book thats still damned excessive!
And yes, we need more true conservatives in Congress.
Finally, the government via BoBo has a plan...to forgive all the cash pumped into them so far, as well as what is surely coming.

W wasn't perfect, for sure.

Question - what definition are you giving to a 'neo-con'?

The true definition is very elusive - neocons include Charles Krauthammer, Paul Wolfowitz, maybe Dick Cheney and his aide, Scooter Libby, Doug Feith in the Pentagon, Bill Kristol. Do you have problems with this group of people?

Now, a neo-con may have at some point in time been a liberal -the cliche was because "they were mugged by reality," but it was because they saw the empirical failures of liberal welfare, state and foreign policies, and they were therefore less ideological than other conservatives and brought much more of a social science background to their argumentation. Not a bad way to go.

Review some of Krauthammer's columns - he's an interesting guy and always right on point.

[Alex Donghi]

'New GM and an Old GM'
that reminds me of the Atlanta olympics guy in New mexico calls atl for tickets. bimbo asked where you from she says well you have to call your consulate in mexico for tickets. He says hes in NEW mexico. she responds I don't care what kind of mexico it is you have to call the mex consulate so he says how about Arizona. Thats ok she says. Guaranteed that idiot voted for obama
hey and the Chicoms get hummer too hilarious

[joe g]

CAN ANYONE SPELL AMTRAC- the government run railroad from the 70's that was to be makig a profit by the mid 80's? They get a 2 billion dollar subsidy every year and are still going deeper in debt.
GM WILL NEVER BE PRIVATE IN MTY LIFETIME- just more billiobs spent every year
joeg

[cobra de capell]

Well, whatever the federal government projections are on the downside - triple it and triple it again practically every year from now on out.

The money finished to GM by BOO is probably in the old GM and will never be repaid.

By the way, why is it that GM always needs to come up with a plan for profitability but the federal government doesn't need to come up with a plan to get our money back from GM? This is a business transaction, not a war - therefore, what is the end game in this piece of business? Even a bank would not have forked over billions to GM, why is it that the federal government can do it? Actually, it's not even about GM, it's about the UAW.

The only light I see at the end of this tunnel is the mid-term election and, of course, 2012. Opportunities for Americans to do the right thing.

[1ntCobra]

Originally Posted by cobra de capell

...

Even a bank would not have forked over billions to GM, why is it that the federal government can do it? Actually, it's not even about GM, it's about the UAW.

...

The banks are the root of this problem with the credit crisis, they have trapped themselves in a situation where they could not lend the money to GM even if they wanted to.

Ford was lucky and refinanced their lines of credit prior to the financial crisis. GM and Chrysler had bad timing for their refinancing.

The banks have also refused financing to many consumers who would have lined up to purchase/lease new cars, but now they cannot. Causing pain to all automakers selling cars in the US. Plus you have the recession now.

The CEO of GM wanted to borrow money from the government and avoid bankruptcy. Much like Chrysler did back in the day. I'm sure GM brass was looking beyond this short term banking mess and recession. Hey they were the #1 automobile maker in the world for decades and only recently lost out to Toyota. Do you think the US market for new cars has permanently shrunk by something like 50%? Or do you think after the financial crisis and recession, we are not going to go back to buying new cars like we have been doing?

So what does the government do? They fire the CEO who sees beyond the short term, so they can force the company into bankruptcy and then put their cronies in charge to build the Pelosi-mobile. Hey the government has a 31 year old fresh out of grad school student to go in and run things. And they get to screw the shareholders and bondholder out of ownership.

I think GM is screwed with the forced bankruptcy and having government cronies put in charge. I'm sure if the government had acted this way in '79 firing Lee Iacoccoa, taking over Chrysler and setting up to build the Jimmy Carter mobile, there would have been a big mess. But instead they lent them money, let industry experts pull themselves out of a mess, and the government was paid back with a profit. I don't how GM is going to be able to fix itself if the government puts in a bunch of amateurs to run the show.