Treasury ups auto bailout loss estimate…

January 30, 2012 3:01 pm  

(Detroit News) – The U.S. Treasury Department boosted its estimate of government losses in the $85 billion auto bailout by $170 million.

In the government’s latest report to Congress this month, the Treasury upped its estimate to $23.77 billion, up from $23.6 billion.

Last fall, the government dramatically boosted its forecast of losses on the rescues of General Motors Co., Chrysler Group LLC and their finance units from $14 billion to $23.6 billion.

Much of the increase in losses is due to the sharp decline of GM’s stock price over the last six months.

GM was trading at noon today at $24.24. It’s down 35 percent over its 52-week-high of $37.23, but the Detroit automaker has rebounded from a low set last year of $19.05.

The Treasury, which initially held a 61 percent majority stake in GM, now holds a 26.5 percent share, or 500 million shares in GM. To break even, the government would need to average $53 per share for its remaining stake.

At current prices, the government would lose more than $14 billion on its GM bailout.

The sharp decline in GM’s stock price has put the government’s sale of its remaining shares on hold.

The government booked a $1.3 billion loss on its $12.5 billion bailout of Chrysler.

As part of its $17.2 billion bailout, the Treasury still holds a 74 percent majority stake in Ally Financial Inc., the Detroit-based auto lender and bank holding company. Ally, formerly known as GMAC, put its IPO on hold indefinitely last year because of market weakness.

Source: http://www.detroitnews.com/article/20120130/AUTO01/201300393/Treasury-ups-auto-bailout-loss-estimate?odyssey=mod|newswell|text|FRONTPAGE|s

Debt Ceiling Skyrockets, Obama No Longer Calls Bush 'Unpatriotic' for Increases
Tea Party: Lloyd Marcus Delivers Powerful Message

Top Stories

Teachers Granted Power to ‘Confiscate and Destroy’ Un... (EAG News) - The British government is urging school leaders to use their “common law powers” to search student lunches and potentially confiscate...
State: Force Clergy to Perform Gay Weddings (The Blaze) - A new survey conducted in the wake of the Supreme Court’s legalization of same-sex marriage last Friday found that 19 percent — or ...
Disabled Vet Faces Life In Prison for Treating PTSD with Pot (Infowars) - A marine corps veteran faces life in prison for cultivating marijuana plants while he lived in Oklahoma, plants which he relied on to tre...
Robot Kills Man at Volkswagen Plant Machine grabs worker, thrusts him against metal slab (The Local) - The incident occurred on Monday as a Volkswagen factory in Baunatal, Hesse, when...
Ben Carson Tells Washington ‘Here we Come!’ (Breitbart) - Dr. Ben Carson, the gifted neurosurgeon and political conservative who’s running for the Republican nomination for president, has a me...
Jim Carrey Slams School Vaccine Legislation Carrey tweeted that Gov. Jerry Brown is a "corporate fascist" who "must be stopped." (Hollywood Reporter) - Jim Carrey is speaking out against new l...

Comments


Please help us stay spam-free. Mouse over a spam post and click the X to report spam.