GM Repays Its Loans?

[Faldur]

This is a great example of why Government has no business owning stock in a company its supposed to regulate.

So anyone who has bought a GM vehicle recently received a wonderful letter informing you that they have paid ALL of the government loans back, plus interest!! 5 years early!! You may also have seen the huge tv commercial campaign to inform the public of there wonderful trustworthy nature.

Now for those pesky facts... what we are not being told is that to pay back the government loan, GM has borrowed on its TARP line of credit. So they borrowed $4.7 billion dollars from the government, to pay the government $4.7 billion so they can run these wonderful commercials telling America how great of a company they are. Has our country become a land of complete idiots? Does no one question authority anymore?

The most alarming part is that our news media has become completely silent. Truth, independence, and investigative journalism no longer exist in what is supposed to be a "free" media. And where is government regulation? Truth in advertising? Does it seem odd that the people who are supposed to regulate the company are one of the primary stock holders?

For those fans of cut and paste.. http://radioviceonline.com/gm-repays-loan-to-us-actually-not-really/

[bsting]

Hey Faldur,

I don't think they're spending $4.7b on TV commercials. The real question is what happened to the hapless stock holders? On balance, this seems like good news to me.

[BeardedOne]

Actually, the press has been on this pretty well over the past couple of days. Making it clear that GM is paying OLD notes with NEW money from the bailout. While it still doesn't shine as fiscal responsibility on their part, it is not a new form of finance.

Paying down/off old debt with new loans is historically good business (If it doesn't get out of hand). Personally, I refinanced my house three times in about a four year period to knock interest rates and payments down. When I first bought the house, the payments were in the $900 USD range, now they are closer to $550 USD with no huge paydown of the note. It gives more flexibility in the payment with the ability to ramp up payments to principal or to add in extra payments (To principal) in better times. The long-term savings can be astronomical, especially when dealing in millions/billions like Government Motors does.

Of course GM's admen are spinning this to the public like GM is paying the bailout money back early. Unfortunately, the public will eat this up.