Deep in Fantasyland: White House touts GM loan repayment

[girl gone mad]

http://econblogreview.blogspot.com/2010/04/deep-into-fantasyland-white-house-touts.html">Snow Business
Deep in Fantasyland: http://firstread.msnbc.msn.com/archive/2010/04/21/2275990.aspx">White House touts GM loan repayment:

. . . the White House is trumpeting the news. Here's a blog post by chief White House economic adviser Larry Summers:

What a difference a year makes. Just about a year ago, the American auto industry was on the brink of collapse. Today, General Motors announced that it has repaid its $6.7 billion loan to the U.S. government in full five years ahead of schedule . . .

However, a more independent opinion comes from the man the Democrats appointed to oversee TARP, Neil Barofsky. A Google search of the topic brought me to Grassley Slams GM, Administration Over Loans Repaid With Bailout Money. Leaving the politics out of it, here is the meat:

"I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," he said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money."

Barofsky told the Senate Finance Committee the same thing Tuesday, and said the main way for the federal government to earn money out of GM would be through "a liquidation of its ownership interest."

A financial adviser named Nick Massey has a long, more thorough shredding of the Summers point of view in http://www.edmondsun.com/business/x563631288/Don-t-believe-the-hype-on-GM-s-loan-repayment">Don’t believe the hype on GM’s loan repayment.

http://econblogreview.blogspot.com/2010/04/deep-into-fantasyland-white-house-touts.html">more...

[dipsydoodle]

1. And the music goes round and round............

.

[icnorth]

2. With the exception of Ford

a year ago the American auto industry was bankrupt. Now Government Motors has repaid a part of the loan with with funds from loan. The balance of the loan is wiped out with stock issues. Equity? B.S., There is no equity, Government Motors is bankrupt. Another variation of the derivatives scam by the Wall Street casino.

[Travis_0004]

3. Yup

The US government is still owed 50 billion or so, and the stocks they have are worthless, as GM's equity is 170 billion or so in the red.

[cowman]

4. All I own are Fords

I have a fully restored 1968 Ford Fairlane Cobra, and a 2009 Ford Explorer and a 2008 Ford Expidition. I like FMC because they are the only ones that told to Feds to fuck off with their bailout money and they made the hard choices and now are doing quite well. This idea that a company is too big to fail is the most asinine thing I have ever heard of and Larry Summers is such a dickwad. The Obama Admin should can his sorry ass

[upi402]

5. Larry Summers: a guy who told Brooksley Born to STFU

and that Wall Street's credit default swaps and casino behavior was A-okay (during Clinton-republicanism).

Hope
Change
My ass