Even though you own $27 billion in GM bonds, you'd get 10% of the company. The UAW, which has a claim on $20 billion for its health-care and pensions obligations, would only have to sacrifice half of that to get 39%. The feds, who will invest another $9 billion to bring their total investment to the same level as your bonds, wants 51%. . . .
Does anyone at the Treasury do math any longer? The total sacrifice of all three parties would be $64 billion, of which the federal government and the bondholders are contributing the same percentage: 42.2%. The UAW will contribute about 15.6%. Why would the Obama administration expect bondholders to contribute 42% of the solution in order to gain 10% of the company?
Looter tactics straight out of Atlas Shrugged. My advice to anyone owning market mutual funds or stock in a publicly-traded corporation can be summed up in three words: Sell, sell, sell! Weimar America and Dow 3,000, here we come! UPDATE: Saw a scroll on the bottom of Fox News saying that GM bondholders have rejected the deal -- yea, bondholders! -- which explains why the Dow is up, for now. The "Geithner Motors" scheme of handing over the once-mighty industrial giant to the UAW goons whose greed has bankrupted the company has got to be the worst idea for "recovery" I've ever heard. UPDATE II: Bloomberg, at 11:17 a.m.:
General Motors Corp. fell 8.3 percent to $1.87 for the steepest drop in theA share of GM is now cheaper than a gallon of gas.
Dow. Bondholders find the automaker's offer to exchange their $27 billion in
debt for equity unreasonable and said they should be treated more equitably with