Tales from Bailout Nation (cont.)

Like rats leaving a sinking ship...

The U.S. government plans to sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker's stock, people familiar with the matter said.

A sale within the next several months would almost certainly mean U.S. taxpayers will take a loss on their $50 billion rescue of the Detroit auto maker in 2009.

To break even, the U.S. Treasury would need to sell its remaining stake—about 500 million shares—at $53 apiece. GM closed off 27 cents a share at $29.97 in 4 p.m. trading Monday on the New York Stock Exchange, hitting a new low since its $33-a-share November initial public offering.

At current share prices, the American tax-payer would take an $11 billion dollar loss if the remaining government-owned shares were put up for sale today.

So, why are the feds so eager to dump this turkey?

Government officials are willing to take the loss because the Obama administration would like to sever its last ties to the auto maker, the people familiar with the matter said. A summer sale makes it more likely Treasury could sell all of its stake in GM by year's end, avoiding a potentially controversial sale in the 2012 presidential election year.

A summer sale when, hopefully, no one is paying attention. And good to know the calculus for selling GM stock is now purely political instead of based-upon any economic rationale. Perhaps, Team O can divert some of their campaign warchest funds to this IPO because, at this point, they really would serve the same purpose.

So, if you are scoring at home you have a) a bankruptcy cramdown where unions were shoved to the head of the line before secured creditors, b) a pack of blatant public lies regarding the payback of the TARP loan, c) a $9 billion loss on the first IPO last November and now this... a massive stock dump in order to clear the books ahead of the 2012 presidential elections.

Yep, this public-private partnership has been a smashing success all the way around.


Just to repeat... we will never... never buy a GM product for as long as we live.