Sunday, December 21, 2008

Go bankrupt, but keep the jet

They're still flying their corporate jets, even after we learn banking executives were paid $1.6 billion in bonuses for ignoring risks and doubling down in 2007.

Paulson's $700 billion bailout, along with Bernanke's $7 trillion printing press option have been a collosal mistake.

Tim White


Anonymous said...


After Hours: 4.25 Down 0.24 (5.35%)7:59PM ET
Last Trade: 4.49
Trade Time: Dec 19
Change: Up 0.83 (22.68%)
Prev Close: 3.66
Open: 4.38
Bid: N/A
Ask: N/A
1y Target Est: 2.34
Day's Range: 4.01 - 4.49
52wk Range: 1.70 - 29.28
Volume: 70,218,216
Avg Vol (3m): 38,694,100
Market Cap: 2.74B
P/E (ttm): N/A
EPS (ttm): -38.74
Div & Yield: 1.00 (22.30%)

Let me explain some of these numbers to those of you who are not familiar with a company's short summary.

General Motors is the county's number one domestic auto manufacturer. GM has lost over $60 billion over the past year in stock equity.

General Motors is worth $2.74 billion as of the close on Friday, December 19, 2008 @ 8PM.

Without taxpayer approval, an executive order was made by our President to loan somewhere around $14 bil to GM.

Let's see, they lose an average of $15 bil every three months and we just gave them a $14 bil loan for now.

Doing some math you can figure that GM has about 610 mil shares outstanding, with a value of $4.49 per share. Knowing that they received this loan, the analysts that cover GM predict that GM will be worth $2.34 per share one year from now..God willing!

So, if you take the outstanding shares and multiply it by the 1yr target est. GM will be worth somewhere around $1.43 bil a year from now. Nice investment, right?

Does anyone see a problem here? or Does anyone see an opportunity? Chrysler is a PRIVATE company, so no data is available to the public. But we used tax dollars to bail them out also. Problem Two? or Problem Too?

Ford, doesn't need any money right now. What's up with that?

Let me just check Toyota and Honda for a moment, I'll be right back...
Okay, Toyota is worth over $100 billion and earns a profit of $9.00 per share and Honda is worth $75 billion and earns $1.70 per share.

It makes you wonder who dropped the bombs on who 63 years ago doesn't it!

I say let them go bankrupt! and we can all be riding rickshaws in the morning.

Good Night,


Anonymous said...

In the end, it would be cheaper to just let these firms offload their retirement benefits on the feds and let them get back into the car business.

They are the canaries in the coal mine, though. We have collectively made promises to present and future retirees we cannot honor based on realistic economic projections. The people grilling Rick Wagoner for his bonehead UAW deal have done the same thing with social security and Medicare. And they too, fly corporate jets around.

The Democrats are going to give corporate socialism a test drive. It might be worth it if it educates the public why we cannot do this for the entire economy.