Treasury "Out" Of GM For $10.5 Billion Loss (Claims 768% ROI)

Tyler Durden's picture

The spin does not get any better than this... As they reported they would,

  • *LEW SAYS U.S. SOLD ALL REMAINING SHARES OF GENERAL MOTORS RECOUPING $39 BLN OF ORIGINAL GM INVESTMENT

That is a $10.5 Billion loss! But, The Center for Automotive Research, a Michigan nonprofit organization that analyzes auto industry issues, those funds saved or avoided the loss of $105.3 billion in transfer payments and the loss of personal and social insurance tax collections -- or 768% of the net investment.”

 

 

And The White House...

Efforts Saved Jobs, Helped Stabilize Economy During Financial Crisis

 

WASHINGTON – As the Troubled Asset Relief Program (TARP) continues to wind down, the U.S. Department of the Treasury today announced that it has sold all of the remaining shares of General Motors (GM) common stock. 

“The President’s leadership in responding to the financial crisis helped stabilize the auto industry, and prevent another Great Depression. With the final sale of GM stock, this important chapter in our nation’s history is now closed,” said Treasury Secretary Jacob J. Lew.    “The President understood that inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production. As a result of his efforts, which built on those of the previous Administration, more than 370,000 new auto jobs have been created, and all three U.S. automakers are profitable, competitive, and growing.”

Treasury has recouped a total of $39 billion from the original GM investment.  To date, Treasury has recovered a total of $432.7 billion on all TARP investments - including the sale of Treasury’s shares in AIG - compared to $421.8 billion disbursed. Treasury will continue to wind down the remaining investments in a manner that balances maximizing the taxpayer’s return on investments with the speed of our exit.

 

Via LA Times,

...

 

Additionally, the center said the bailouts and financial restructurings saved about 2.6 million jobs in the U.S. economy in 2009 and $284.4 billion in personal income over 2009 and 2010.

 

In the report, “The Effect on the U.S. Economy of the Successful Restructuring of General Motors,” researchers Sean McAlinden and Debra Maranger Menk wrote that the value of the bailouts can’t be considered just by what the taxpayers will lose in the sale of GM’s stock.

...

 

If you only count the things that make you look good and don’t count the things that make you look bad, any investment will look good and any investment will be profitable,” said Dan Mitchell, senior fellow at the libertarian-leaning Cato Institute.

 

He said the analysis doesn’t place a value on the adjustments that the auto industry would have been forced to make in the absence of a bailout.

 

“Those adjustments, more meaningful concessions in labor costs and work rules, would have put the auto industry on a sounder footing,” he said.
 

We can't wait to hear how much Bill Ackman made or saved on his Herbalife investment...

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SilverIsKing's picture

So based on this nonsense, .gov should give Walmart $10,000 for every employee they hire and keep employed for a year.

That would provide a great return on investment.

 

Cult_of_Reason's picture

Maybe now they can rest and ease on propping up the stock market?!?

Bernanke/Yellen can taper now.

Dick Buttkiss's picture

The USG is getting out while the getting's good. Otherwise, it would be riding the "recovery" to a handsome profit next year.

Absurd on every level, in other words, while the MSM, doing the bidding of their crony-capitalist advertisers, present it as activist government on behalf of the people.

I'd throw up if I had anything left in my stomach.

Leopold B. Scotch's picture

Krugman would be pleased.  No alien invasion needed.

wee-weed up's picture

 

 

Yep, who needs campaign finance laws...

When you can just raid the public treasury of tax money...

To pay off your union cronies for steering the...

Rank-and-file votes your way.

Way to go, Barry!

Cleve Meater's picture

So... Question for the peanut gallery because I honestly don't know the answer: Last week Dan Akerson announces that he's doing a press conference at the National Press Club next Monday. This morning the Center for Automotive Research puts out a report saying that the taxpayer bailout saved a gazillion jobs or something like that.

When I saw the Akerson announcement last week, I said to myself... "Self - UST will announce the sale of the remaining shares in GM next week." When I saw the CAR report this morning, I said "Self - it's going to happen today."

So my question: Can a company and its largest shareholder coordinate and time the sale or purchase of shares without running afoul of SEC rules? I mean, I would imagine that for the rest of us hoi polloi that would be a no-no. But, clearly GM knew EXACTLY when UST was going to sell its remaining shares -- they telegraphed it last week with the announcement of the Akerson speech next Monday.

Rainman's picture

See Rattling Bones below

brettd's picture

The SEC gave them a "waiver".

Just this once.....

akak's picture

Rumor has it that the USG sold their GM shares mainly just to take the opportunity to invest in bitcoins.

Hulk's picture

plus they can write off $3k a year until the sun burns out...

Homple's picture

"I can't guzzle as much as I would like to puke."

~Artist Max Lieberman upon watching a NAZI torchlight parade

 

“Ich kann gar nicht so viel fressen, wie ich kotzen möchte”

 

Tijuana Donkey Show's picture

The GOV does give Walmart $10k per person per year in medicaid, welfare, SNAP, tax dodging, Walton trust fund scamming assistance. 

lakecity55's picture

eerily reminiscent of the old USSR GUM department stores where all the employees were government employees, just like the customers.

A Nanny Moose's picture

Multiplier Efucked

...bytchez!

jerry_theking_lawler's picture

Holy shit, I need to go to my local bank branch and demand a loan against all of my 'potential' gains from a mining a massive PM filled asteroid.....I am the owner and will eventually get to it....I am cerain of it.

Mike2756's picture

Wonder how many jobs my trading losses saved?

OneTinSoldier66's picture

Answer given below by CounterPartyVice

Rattling Bones's picture

It's almost as if we have a corrupt and incompetent government.

Rainman's picture

Hopelessness is not a strategy

Henry Chinaski's picture

Who gained? When O sold off Chrysler the American People lost $5B. The same week Fiat (privately owned car company) declared a one time $5B gain on the purchase of Chrysler...

brettd's picture

Why would they stop?

Nobody's raising a rukkus....

y3maxx's picture

Obama Administration will now take all the GM $$$ profits and sink it into a "New Obamacare Web site" for a "Daily Double Parlay".

nbsharma's picture

hilarious ackman tweet.

Derf Scratch's picture

Lax Jew, perfect faceman for this corruption and theft form the middle class...

Winston Churchill's picture

They made it back on the volume.

Must be time to go long GM judging by the Obozo investment record.

 

Non Passaran's picture

Extremely profitable!
If car loans "created and saved" are counted, this deal was fantastic for the taxpayer.

Meat Hammer's picture

The Feds are so good at proving the unknown.  

ebworthen's picture

$10.5 Billion loss?

Hell, they could have sent every household $5.2 million and stimulated a whole lot more than inventory stuffing.

Abbie Normal's picture

$10.5 Billion divided by $5.2 million = 2019

So which 2019 households should get that lost bailout money?

CounterPartyVice's picture

Without the bailout the world wouldn't exist anymore right? So the ROI is x / 0 = infinity, so it's clearly the best invesment ever.

yogibear's picture

LOL, didn't GM pay back all of it's loans years ago? But it must be true because they advertised it.

The wonders of mark to fantasy accounting.

Lew knows the Fed will keep printing. No shortage of cash with the Fed's printing. 

When Lew and Bernanke get together they probably light their cigars with 100's.

mt paul's picture

maybe Bitcoin lighters..

KCMLO's picture

Just consider that $10 billion loss an "initial investment."  They will have wonderful opportunities in the near future to try their hand at investing in GM all over again, and just think what the savings will be then!  And with these metrics for "success" look out for an 10,000% ROI!

Race Car Driver's picture

> That is a $10.5 Billion loss!


BFD - the FED shits that out every 3 days, or so. A billion ain't what it used to be.

Bryan's picture

I saved $10M today by not buying a gold-plated yacht!  I'm rich!   I think I'll go not buy a Fifi Island next!  woohoo!  I didn't know this was how it worked!?

Emergency Ward's picture

You will be taxed by the NWO IRS on your imputed gain!

Colonel Klink's picture

Nothing like transferring everyone else's wealth for the benefit of others!  When do we run out of other peoples money?

FORWARD!

lakecity55's picture

well, COL, we willl at least get to find out how the Germans felt with a homicidal psychopath in charge of the country.

*****

The latest O'Leechcare news is that you won't be keeping your prescription medicines, either.

Genocide can be sooo simple....

brettd's picture

Only when

Or if...

they stop giving their money to you....

CheapBastard's picture

BaaaaWaaaaHaaaaaa....................

Seasmoke's picture

Because I didn't blow up a nuclear bomb today. I saved or created 1 billion lives.

Saved or created...... Saved or avoided.... Enough is a fucking Enough !!!!!!

juggalo1's picture

Bailing out GM was a big success for the US govenment.  Kicking the can of GM reorganization out of the 2008 ditch was the greatest success of the Bush / Obama coalition.  I didn't think it would be possible but it is.  Instead of having to pay government benefits to all those unemployed people, we had all those workers paying taxes.  Treasury is perfectly correct to count that as a benefit to the government and the country.

Alternative's picture

Fantastic! Take from my taxes, give it to them and have them pay taxes on that. Sounds at least like a double taxation to me. Even if I would call it theft.

Emergency Ward's picture

"The end is near unless Bush/Obama plunder the sheep to pay goodies to their cronies."  Ha Ha Ha.

withglee's picture

GM made cars. They sold them for less than they cost to make (or didn't sell some they made). But they did sell "some" cars. The marketplace needed those cars. If you close GM, someone else will make the cars that GM used to make. That will take people. GM releases people into that labor pool, and they get hired by the other makers of cars. Some don't get hired. They're not needed to make cars. So what.

Why would anyone think that keeping a dead manufacturer on life support so as to keep its labor getting paid ... why would that be a good strategy.

There's only one good strategy: Make government smaller ... repeat.

jeffgroove102's picture

It is troubling how theft is becoming so rampant in society. These people's hubris knows no boundaries. Is their a reptile test that people can take before entering public office, so we cannot have them in public office. Friggin joke.

They are literally running civilization through a meat grinder, how many times over is jack lew a millionaire, what about herr obama? This has been the most singlehanded re-establishment of royalty in america.

Henry Chinaski's picture

Trends indicate civilization is mostly rare and fragile. Bitchez!