General Motors (GM) shares closed down 1.5% to 19.02 on Monday, hitting 18.85 intraday. That's the lowest since the U.S. auto giant came public again in November 2010 at 33 a share. Update: GM shares early Tuesday fell 1.4% to 18.76, hitting a new low.)Heckuva job.
That raises the taxpayer loss on the GM bailout to just shy of $35 billion. Here's the math:
GM doesn't have to pay back anything else, but taxpayers are still out $26.4 billion in direct aid. The Treasury still owns 26.5% of GM — 500 million shares. The stock would have to rise to about 53 to break-even on that direct aid. At the current price, the Treasury's stake is worth just $9.51 billion. (Taxpayers lose $5 million for each penny that GM stock falls).
Do we really want government picking winners and losers in the market, a la Solyndra? What evidence is there that government is any good at this?
Update, 8/13/12: How much are we taxpayers losing on the auto bailouts? This much:
The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15 percent higher than its previous forecast.
2 comments:
And Darren, we waste billions of dollars, close three companies and loss tens of thousands of jobs so we can have GM move behind Toyota world wide.
Toyota sold 4.97 million vehicles globally in the first six months of this year, a strong result that could see the Japanese automaker regain its crown as the world's top automaker from General Motors Co...
...Toyota's production was hit by the quake and tsunami in northeastern Japan last year and then by flooding in Thailand, which is an important production base for the automaker. Before those disasters, its sales were dented by massive U.S. recalls, totaling more than 14 million vehicles since the quality control problems emerged three years ago.
GM, which was No. 1 in world auto sales last year, plans to release first-half global sales Aug. 2. Its vehicle sales will total 4.56 million, even if it merely matches the first-quarter pace, and will likely approach 4.7 million vehicles, given its strong performance in China and the U.S., its two largest markets....
Yes, some would say the transition of GM from a icon of capitalism and free enterprise to a government agency has not been beneficial.
The portion quoted is incomplete. Being out $26.4 billion in direct aid and having an asset worth $9.51 billion, would be out $26.4 - $9.51 not equal to $35 billion.
The article linked went into the remainder of the $35 billion, but if people don't follow the link, they may think that bad math is happening.
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