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  • OT - Where did the money go?

    Chrysler has paid back it loan from the Government.

    http://www.nytimes.com/2011/05/25/bu...5chrysler.html

    Where has the money gone? There doesn't seem to be any reduction in the defict. Is this another Congress "shady deal" where the loan amount is left on the books and the repayment money is now considered a bonus in funds for Congress to squander? Appreciate any wisdom.
    Bill

    Being ROAD KILL on the Information Super Highway and Electronically Challenged really SUCKS!!

    Every problem can be solved through the proper application of explosives, duct tape, teflon, WD-40, or any combo of the aforementioned items.

  • #2
    Just like the GM payoff, it is another shuffling of money from one pocket to another.

    http://washingtonexaminer.com/blogs/...ilout-pay-back

    "So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion."
    Jim H.

    Comment


    • #3
      I wasn't my pocket unfortunately Alistair
      Please excuse my typing as I have a form of parkinsons disease

      Comment


      • #4
        Just moving it about.

        They paid back $7.6 billion and borrowed even more.

        "
        Chrysler was able to repay the loans because it had negotiated new financing with a consortium of investment banks that includes a term loan of $3 billion, debt securities totaling $3.2 billion and a revolving credit facility of $1.3 billion.
        The loan repayment was also helped by funds from Fiat, which paid Chrysler $1.3 billion to increase its stake to 46 percent."


        Fast becoming a one car maker, Fiat also own Ford Commercial Europe under the Iveco badge. There has been no Ford badged trucks here or in Europe for 8 or 10 years now, all Iveco.


        They make many of the badge engineered small commercials in Italy for fiat, Peugeot and Citroen, all slightly different standards of trim and different names but all made on the same production line.


        I have one, a Peugeot Boxer van, same as the Fiat Ducatto and same as the Citroen Relay. A good van, very reliable and all fitted with the Peugeot diesel engine.


        Volkswagen also fit the same engine in some of thier vehicles.
        .

        Sir John , Earl of Bligeport & Sudspumpwater. MBE [ Motor Bike Engineer ] Nottingham England.



        Comment


        • #5
          Originally posted by JCHannum
          Just like the GM payoff, it is another shuffling of money from one pocket to another.

          http://washingtonexaminer.com/blogs/...ilout-pay-back
          Well, that's sure a creative way of spinning Chrysler defaulting on their loans during their bankruptcy.

          If you click through that gentleman's citation, it's a CNN Money article which explains that just about everyone lost their loans to Chrysler when they went bankrupt, including the Canadian government, who "forgave" $900 Million in the same loan package. They must be part of the conspiracy
          http://money.cnn.com/2009/05/05/news...hrysler_loans/

          NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

          Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.

          The company filed for bankruptcy Thursday as part of a deal with the federal government, unions, some lenders and Italian automaker Fiat to keep the company from being shut down.

          The Canadian government also agreed to kick in about $900 million in bankruptcy financing. According to the filings, Chrysler's advisor assumes that this loan will be forgiven as well.

          The Obama administration official said that other money being made available to Chrysler, such as the $4.7 billion that will go to the company as it exits bankruptcy, will be a loan that the government expects to be paid back. In addition, that loan will be secured by company assets, unlike the previous loans to Chrysler.

          Bob Corker, R-Tenn., who took the lead among Senate Republicans in challenging the auto bailout last December, said he was disappointed but not surprised that Chrysler would not be paying back the money.

          "I've known for sometime that with the capital structure of the company and the situation it was in, we would not be paid back," he said. "There were several secured lenders ahead of us, and they're not getting most of their money."

          Major banks and hedge funds that loaned Chrysler $6.9 billion were offered only $2.25 billion to settle those loans by Treasury. While major banks accepted the offer, hedge funds rejected it, forcing the company into bankruptcy.
          "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

          Comment


          • #6
            Originally posted by JCHannum
            Just like the GM payoff, it is another shuffling of money from one pocket to another.

            http://washingtonexaminer.com/blogs/...ilout-pay-back

            "So, to recap, the Obama Energy Department is loaning a foreign car company $3.5 billion so that it can pay the Treasury Department $7.6 billion even though American taxpayers spent $13 billion to save an American car company that is currently only worth $5 billion."

            How's that Hope and Change workin' out for ya?

            Comment


            • #7
              The debt is currently at 14.3 trillion. (thanks Lew- I actually do know the difference, but its easy to make that mistake)
              Thats 14,300 Billion dollars.
              Chrysler paid off about $7.6 Billion this week.

              so, 7.6 billion is one eighteenth of one percent of the deficit.
              I am not exactly sure where you would see 1/18th of 1% register, but even if it had gone exclusively to paying down the deficit, the bump would be so small you would need a microscope to see it.

              In may of last year, Chrysler actually paid back 2 billion or so of the 4 billion that Lazlo's link says was never repaid.

              to date, Chrysler has paid back about 10.5 billion of 15 odd billion it was given, and it is scheduled to pay back some more, plus the feds own some stock. Most likely, we will be out, in the final accounting, between 2 and 3 billion dollars on the Chrysler bailout.

              Chrysler has NOT gotten the new loan for 3.5 Billion it has applied for. It may get it, that remains to be seen, but it is NOT using a new loan from the government to pay back the old one.
              The goal of the bailout was to allow Chrysler to get back on its feet, and operate as a free market capitalist company.
              Issuing bonds, and getting a revolving credit loan from a normal bank- these are proof that the invisible hand of the marketplace considers Chrysler to be a decent risk- which means, in that respect, the bailout worked.

              Fiat also kicked in another 1.5 billion to help pay off these loans.

              By the way- the energy loan from the feds that Chrysler has applied for- Ford has already received $5.9 Billion dollars in Federal loans from this program- so if their is a conspiracy going on, its pretty widespread. Nissan also got a billion or two.

              If we had let Chrysler sink, it could well have triggered a cascade of companies going broke- tier 1, 2 and 3 suppliers, employing hundreds of thousands of workers.
              There is also pretty reliable estimates that say the cost to the Feds if Chrysler had gone bankrupt, in unemployment, medicare and medicaid, SS, and other federal programs, would have been LOTS more than the 3 billion or so this will cost us. Plus, Chrysler pays property taxes, unemployment taxes, SS, Medicare, and lots of local, state, and federal taxes all over the country. In my county, sales tax from car dealers is something like half the income for some small towns.

              We will never know how bad it would have been NOT to bail em out, but my guess is, a lot worse.
              Last edited by Ries; 05-29-2011, 01:46 PM.

              Comment


              • #8
                This kind of she-it just pisses me off. The Gov. will drag Joe Public by the balls over a few nickel... but will turn and give a pass to this kind of BS. Bet they all get a BIG ASS BONCE for this as well.

                Originally posted by lazlo
                Well, that's sure a creative way of spinning Chrysler defaulting on their loans during their bankruptcy.

                If you click through that gentleman's citation, it's a CNN Money article which explains that just about everyone lost their loans to Chrysler when they went bankrupt, including the Canadian government, who "forgave" $900 Million in the same loan package. They must be part of the conspiracy
                http://money.cnn.com/2009/05/05/news...hrysler_loans/

                NEW YORK (CNNMoney.com) -- Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

                Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler's operations during bankruptcy.

                The company filed for bankruptcy Thursday as part of a deal with the federal government, unions, some lenders and Italian automaker Fiat to keep the company from being shut down.

                The Canadian government also agreed to kick in about $900 million in bankruptcy financing. According to the filings, Chrysler's advisor assumes that this loan will be forgiven as well.

                The Obama administration official said that other money being made available to Chrysler, such as the $4.7 billion that will go to the company as it exits bankruptcy, will be a loan that the government expects to be paid back. In addition, that loan will be secured by company assets, unlike the previous loans to Chrysler.

                Bob Corker, R-Tenn., who took the lead among Senate Republicans in challenging the auto bailout last December, said he was disappointed but not surprised that Chrysler would not be paying back the money.

                "I've known for sometime that with the capital structure of the company and the situation it was in, we would not be paid back," he said. "There were several secured lenders ahead of us, and they're not getting most of their money."

                Major banks and hedge funds that loaned Chrysler $6.9 billion were offered only $2.25 billion to settle those loans by Treasury. While major banks accepted the offer, hedge funds rejected it, forcing the company into bankruptcy.
                Last edited by Tinkerer; 05-28-2011, 07:58 PM.
                Wow... where did the time go. I could of swore I was only out there for an hour.

                Comment


                • #9
                  Originally posted by Ries
                  We will never know how bad it would have been NOT to bail em out, but my guess is, a lot worse.
                  That's probably true, but the same argument was applied to bailing out Wall Street in 2008: we couldn't afford to suffer the consequences if those big financial institutions failed.

                  Although, oddly, we let Lehman Brothers, the largest and oldest financial services company in American history fail. Strange, since the secretary of the treasury and architect of the bailout was Hank Paulson, the CEO of Morgan Stanley, who was Lehman Brother's fiercest competitor.

                  Whatever happened to free market capitalism? If you float the largest ponzi scheme in human history, and screw it up, you should go bankrupt. If you build lousy cars that no one wants to buy, while paying the execs huge performance bonuses, you should go bankrupt...
                  "Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did."

                  Comment


                  • #10
                    It also looks as though the gubment has shot themselves in the foot as far as having any chance of selling off their remaining GM stock at anything but a loss. GM stock is struggling to maintain itself in the low $30 range but needs to be in the $50's to break even. With gas prices having been driven into the $4.00 range, that isn't going to happen any time soon. O needs to be rid of GM or it will haunt him in 2012.

                    http://www.cato-at-liberty.org/obamas-gm-quagmire/
                    Jim H.

                    Comment


                    • #11
                      We have two worthless companies is what we have and we paid a lot for them when we shouldn't have.Baling them out only delayed the inevitable they are no better off today then they were then.
                      Last edited by wierdscience; 05-28-2011, 08:15 PM.
                      I just need one more tool,just one!

                      Comment


                      • #12
                        Originally posted by Rustybolt
                        How's that Hope and Change workin' out for ya?


                        Y'all quite yer why'nin and enjoy yer bran new house O-cards - It's even bigger and better than the last one and what a view, just try not to look down at the foundation cuz it's kinda defyin physics right now - still better than standin in a soup line - save that for tomorrow
                        least we got plenty of warning this time around to stock the pantry - you are stocking the pantry arn't ya?

                        Comment


                        • #13
                          There are WAY too many people here (and in the public in general) that
                          don't know the difference between Deficit and Debt. Before one
                          starts pontificating on financial matters they should learn the correct
                          terminology. :-)
                          ...lew...

                          Comment


                          • #14
                            Originally posted by Lew Hartswick
                            There are WAY too many people here (and in the public in general) that
                            don't know the difference between Deficit and Debt. Before one
                            starts pontificating on financial matters they should learn the correct
                            terminology. :-)
                            ...lew...
                            Very true Lew, even back in the Clinton yrs. when they were paying off deficits and balancing the budget, the national debt increased every yr.
                            James

                            Comment


                            • #15
                              It will be a very cold day in hell, before I own a GM or Chrysler product. These companies should have been allowed to "fail" and go through bankruptcy in the first place, if they emerged they would have been fixed and been able to survive, if not, too bad.

                              Almost everyone I know is angry about the bailout(s) they received, and then wound up filing bankruptcy anyway, that's a lot of potential customers that will take their money to Ford or to a foreign maker. Not that I know that many people, but I get the sense 'we' are far from alone.
                              Last edited by Iraiam; 05-29-2011, 01:57 AM.

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