Quote:
Originally Posted by Apex Chase
I am in no way defending the bail out or how it was conducted. In fact, I would prefer for the government to stay completely out of the market. But they chose to get involved and it is done. I am just trying to explain what happened because there seems to be a lot of confusion. Like all shareholders, if the Treasury's primary concern is to turn a profit it is their responsibility to play it in a way that is most profitable. In this case that was not their motivation, their primary concern was not to make money but to save a gigantic US employer at a time when our economy was falling apart. In that respect, their investment paid off because GM is alive and well.
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I agree with you completely. I only see one train of thought with any logic that would view the way the loans were repaid as negative. The loans could have been used to accelerate GM's recovery and give them an advantage in the market, possibly resulting in a better post-IPO performance by their common stock among other things. If that were the case, the loans would still have been repaid in full, with earnings rather than from the TARP escrow, at a later date and the PPS likely wouldn't be falling with the end result being taxpayers losing a lot of money. It's all very debatable and I think anyone that expected all of the bailout money to end up back in the Fed is naive. From an auto-enthusiast standpoint I could and would like to see GM stock going up in the future, but unfortunately the trader side of me doesn't see anything bullish about GM stock at all. Actually, I've been considering shorting it since the Fed is now allowed to liquidate their assets and that means a huge increase in the float if they decide to.