GM/Banks Various Shell Games With Our Money





Remember when the GM commercial touted the “fact” that GM paid back much of the billions they owed us (they also raved about their profits in the millions)? It’s a shell game.

TARP had 50 billion. The government spread it out as 29.1 billion GM stock (essentially cutting out the creditors & investors who should have been first); 6.7 billion in loans to GM; 13.4 bilion went into escrow. When they “paid it back,” they took the money from escrow, converted it into a loan payment and gave it back to TARP.

Why is this story so important? For one thing, it fundamentally changed our capitalist system. Why would anyone want to invest or give credit to businesses if the government can take the investment whenever they choose. Secondly, GM (and the banks) lied and said they paid us back, but it was with our own money. Third, the government paid off the unions with creditors and investors money. Lastly, the banks are perpetrating a similar fraud by monetizing bad debt in collusion with the Feds.

Now they have “paid back” in full. More on the scam: Outside the Beltway

It’s really a UAW bailout. “Under the administration’s plan, the U.S. government gets 60 percent of the new GM (presumably now called “Government Motors”), the Canadian government gets 12.5 percent, the United Automobile Workers’ health care fund gets 17.5 percent, and bondholders get the leftover 10 percent. As a sweetener, the UAW also gets a $2.5 billion note, and $6.5 billion in preferred stock paying a 9 percent cash dividend. In commenting on the plan, UAW leaders said that necessary changes involve “painful, unprecedented sacrifices” for union workers, the New York Times reported.” UJ World

Workers got huge profits, not the investors/shareholders as would normally be the case in a free capitalist society. They changed the rules after the game was played. UAW makes out again/research and media center

The GM bankruptcy hammered investors, which includes our pension funds. Pittsburgh-Tribune

One example of the banks trickery follows: By repaying its TARP loan for example, Goldman wriggled out from under the nettlesome compensation limits imposed by TARP, while also conveying an image of financial strength. But this “strength” was illusory. Goldman repaid the TARP loans with funds it procured days earlier from the Federal Reserve. Then, over the ensuing months, Goldman recapitalized its balance sheet by selling tens of billions of dollars of mortgage-backed securities to the Fed.
And the public never knew anything about these activities until two weeks ago, when the Fed was forced to reveal them….abovetopsecret