Posts Tagged ‘government money’

Can GM Really Call That an “Initial” Public Offering?

Can GM Really Call That an "Initial" Public Offering?

Courtesy of Jr. Deputy Accountant 

Initial would imply they didn’t embarrass themselves by getting kicked off the exchange the first time around.

Reuters:

General Motors Co has completed the paperwork for an initial public offering, and timing of its filing with the U.S. securities regulators rests with the board of the top U.S. automaker, sources familiar with the process said on Monday.

The initial prospectus, expected to be for $100 million, is likely to be filed with the U.S. Securities and Exchange Commission on Tuesday, two people said, asking not to be named because the preparations for the IPO are private.

Meanwhile, GM will tell you they have paid back the government in full but that’s not exactly true. They’ve paid back the $6.7 billion they were actually loaned but the total $49.5 billion extended to GM to help it through bankruptcy is still outstanding. A large chunk of that (the part they DON’T mention in the "we paid you back!" commercials) consists of the government’s equity in GM, so GM can turn around and say they paid back the bailout loan and technically be correct. Tricky ain’t it?

It gets worse when you realize they used government money to pay back the government.

Via Reason:

As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money—government money—to pay back the government loan.

GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development—although hardly one worth hyping in ads and columns—if it were not for a further plot twist.

Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5 percent) interest loan to retool its plants to meet the government’s tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the


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Welcome To The Banana Republic: GM In Hot Water With FTC Over Misleading “Repaid Bailout” Ad When All Just TARP Shuffle

See also the post two posts ago "How is that Bailout Coming Along?" with articles by Mish and Op-Toons Review.

Welcome To The Banana Republic: GM In Hot Water With FTC Over Misleading "Repaid Bailout" Ad When All Just TARP Shuffle

automaker bailout posterCourtesy of Tyler Durden at Zero Hedge 

We are too busy maxing out our credit cards buying AAPL shares after hours into the parabolic blow out (using Sigma X of course, how else could we subpenny front run our own orders?), stacks of Kindles, 7th vacation homes with negative equity, and LBOing zero EBITDA companies to comment on this, suffice to say that if you ever needed confirmation that America is a banana republic in which fraud, corruption and lies are now the norm, here you go: Government Motors is now blatantly lying to its existing and future buyers, and everyone in the administration is complicit.

From Fox News:

General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn’t standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

Uhm, what’s wrong with that? That’s precisely the reason why the market is now on for an 8th straight up week. In order to make the rich infinitely rich (before there is revolution, hyperinflation or dollar devaluation), the Obama people must resort to anything and everything.

General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn’t standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

The TV spot may land GM in hot water with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

But a top Senate Republican has accused GM


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How Goldman Sachs Leveraged $70 Billion in Government Money For Record Profits

How Goldman Sachs Leveraged $70 Billion in Government Money For Record Profits

Courtesy of Jesse’s Café Américain

Guess which two Wall Street banks were acting as informal agents of the government in order to support the bond and stock markets and reinflate them?

Two big banks that are showing record trading profits, and a small group of enablers and assistants.

Its a near layup when the US fronts you the money and then works with you to take the markets higher via its Working Group on Financial Markets. Especially when it is on thin volumes based on ‘news’ which you help to create and control via frequent calls to young Tim who is your coordinator, in addition to all your other well-placed backchannel sources. You get a heads up, you use the futures to prop the markets. You need some good news, some can be arranged. Just like the good old days when Timmy was riding herd on the NY Fed desk.

All for the good of the country. And if you happen to make a billion per month in trading profits, well, that is the price of freedom for a job well done. Besides, a lot comes back in lobbying and campaign contributions. And you get to be rather porky and demanding about new banking and derivatives regulations because after all, you have a job to do and if they won’t let you do it, well its uh oh.

That’s what we hear, rumour-wise. Makes as much sense out of this as anything. How about you? Max Keiser thinks it is a fraud, as he describes here.

Below is Dylan Ratigan and his guest’s take on this rally and the record profits.

 


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Phil's Favorites

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

 

What is an inverted yield curve? Why is it panicking markets, and why is there talk of recession?

Markets know what has happened each time the yield curve has turned negative. The idea of a negative curve without a a recession would take some getting used to. Shutterstock

Courtesy of Mark Crosby, Monash University

Since President Trump tweeted about imposing new tariffs on China, global equity markets have gone into a tailspin.

Trump’s more recent announcement that the new tariffs would be ...



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Zero Hedge

Morgan Stanley: "The Global Economy Is Deteriorating Faster Than Offsetting Policy Action"

Courtesy of ZeroHedge View original post here.

Sunday Start, submitted by Jonathan Garner and James Lord of Morgan Stanley

As regular readers know, Morgan Stanley is pretty bearish on global risk assets. This applies to emerging markets (EM) too, where we've been calling for wider credit spreads, weaker EM currencies, particularly in Asia, and lower equity prices. However, not so long ago the narrative guiding investors ran something like this: The Fed was ahead of the curve, EM bond yields looked attractive in a world of negative interest rates and a US-China trade deal seemed within reach...



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The Technical Traders

Negative Yields Tell A Story Of Shifting Economic Leadership

Courtesy of Technical Traders

Negative yields are becoming common for many of the world’s most mature economies.  The process of extending negative yields within these economies suggests that safety is more important than returns and that central banks realize that growth and increases in GDP are more important than positive returns on capital.  In the current economic environment, this suggests that global capital investors are seeking out alternative solutions to adequately develop longer-term opportunities and to develop native growth prospects that don’t currently exist.

Our research team has been researching this phenomenon and how it relates to the continued “capital shift&rdq...



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Insider Scoop

Heavy Volume Drives Low-Float Stock Plus Therapeutics Up 200%

Courtesy of Benzinga

Plus Therapeutics Inc (NASDAQ: PSTV) is the latest and one of the most extreme recent examples of the powerful combination of low float and heavy trading volume.

Plus shares traded higher by more than 215% on Friday. The biotech stock more than tripled after the company reported ...



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Lee's Free Thinking

Long Term Stock Market Chart Perspective

Courtesy of Lee Adler

After a big day like yesterday, I like to get a little long term stock market chart perspective. (Yes, this stilted verbiage is for search engine optimization ).

We do that with a monthly bar chart, which I update when relevant in Lee Adler’s Technical Trader. That’s in addition to the regular daily bar/cycle charts covering the past year, and a weekly cycle chart covering the past 4 years.

I wrote on July 14, in reference to the price and indicator patterns on the weekly chart:

The market has overshot a 3-4 year cycle projection in terms of both price and time. There are no long term projections. A 4 year cycle high is ideally due now. A 4 ye...



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Kimble Charting Solutions

S&P About To Decline 14%, Catching Up With The Crude Oil Declines?

Courtesy of Chris Kimble

This chart looks at the performance of the S&P 500, Crude Oil and the Yield on the 10-Year note over the past 4-months.

Crude Oil has declined around 14% more than the S&P during this time frame. Yields have declined, even more, around 36%. The is a huge spread between these assets over this short of a time period.

A few importa...



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Chart School

Bitcoin 2019 fractal with Gold 2013

Courtesy of Read the Ticker

Funny how price action patterns repeat, double tops, head and shoulders. These are simply market fractals of supply and demand.

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Ref: US Crypto Holders Only Have a Few Days to Reply to the IRS 6173 Letter

Today's news from the US IRS has been blamed for the recent price slump, yet the bitcoin fractal like the gold fractal suggest the market players have set bitcoin up for a slump to $9000 USD long before the IRS news hit the wire.

Get the impression some market players missed out on the b...

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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

Reminder: We're is available to chat with Members, comments are found below each post.

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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