# The Fed giveth, and the Fed taketh away... **URL:** \ **Category:** NYSpeed Automotive\ **Created:** [February 2, 2009, 12:01pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326 "2009-02-02T12:01:48Z")\ **Posts on this page:** 12\ **Page:** 1
**Author:** ![traumadog](https://avatars.discourse-cdn.com/v4/letter/t/8baadc/32.png) [@traumadog](https://forums.speedlife.net/u/traumadog)\ **Post date:** [February 2, 2009, 12:01pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/1 "2009-02-02T12:01:48Z")
Cliffs: Apparently, under the terms of the “bailout”, GM will be required to reduce it’s unsecured debt - which it was going to do via swaps for stock/equity. Apparently, the amount of debt to be reduced counts as revenue for tax purposes; and the change in ownership amount (e.g. stock swap - some of which went to the government, BTW) triggers an automatic tax levy. In short, GM might have to pay $7 Billion in taxes to receive $13.4 Billion in loans from the government. [http://www.detnews.com/apps/pbcs.dll/article?AID=/20090130/AUTO01/901300348](http://www.detnews.com/apps/pbcs.dll/article?AID=/20090130/AUTO01/901300348) ---
**Author:** ![JayS](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/jays/32/15375_2.png) [@JayS](https://forums.speedlife.net/u/JayS)\ **Post date:** [February 2, 2009, 12:10pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/2 "2009-02-02T12:10:22Z")
So interest plus a 60% penalty… I think they could get a better deal from a loan shark or the mob. ---
**Author:** ![Fry](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/fry/32/7284_2.png) [@Fry](https://forums.speedlife.net/u/Fry)\ **Post date:** [February 2, 2009, 12:13pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/3 "2009-02-02T12:13:56Z")
> [@JayS](#): > > So interest plus a 60% penalty… > > I think they could get a better deal from a loan shark or the mob [than the government]. :lol: What’s the difference anymore? ---
**Author:** ![focusinprogress](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/focusinprogress/32/7227_2.png) [@focusinprogress](https://forums.speedlife.net/u/focusinprogress)\ **Post date:** [February 2, 2009, 12:18pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/4 "2009-02-02T12:18:59Z")
wow, that is ridiculous…if they are going to help at all they shouldn’t take taxes back on their own money they lent out to attempt to save the big three and the economy. fucking idiots ---
**Author:** ![Fry](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/fry/32/7284_2.png) [@Fry](https://forums.speedlife.net/u/Fry)\ **Post date:** [February 2, 2009, 12:21pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/5 "2009-02-02T12:21:43Z")
> [@traumadog"](#): > > (e.g. stock swap - some of which went to the government, BTW) Hold on. I don’t think that’s correct… Yeah I don’t think they have an ownership stake in GM. > AUTOMOTIVE INDUSTRY FINANCING PROGRAM > Name of Institution City State > Pricing > Mechanism > 12/29/2008 GMAC LLC Detroit MI Purchase Preferred Stock w/ Exercised Warrants $5,000,000,000 > Liquidation > Preference > 1/ 12/29/2008 General Motors Corporation Detroit MI Purchase Debt Obligation $884,024,131 N/A > 2/ 12/31/2008 General Motors Corporation Detroit MI Purchase Debt Obligation w/ Warrants and Additional Note $9,400,000,000 N/A > 1/2/2009 Chrysler Holding LLC Auburn Hills MI Purchase Debt Obligation w/ Additional Note $4,000,000,000 N/A > 3/ 1/16/2009 Chrysler Financial Services Americas LLC Farmington Hills MI Purchase Debt Obligation w/ Additional Note $1,500,000,000 N/A > TOTAL $20,784,024,131 > **[Front page | U.S. Department of the Treasury](https://home.treasury.gov/)** > > U.S. Department of the Treasury ---
**Author:** ![IanK](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/iank/32/5016_2.png) [@IanK](https://forums.speedlife.net/u/IanK)\ **Post date:** [February 2, 2009, 12:21pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/6 "2009-02-02T12:21:44Z")
> [@focusinprogress](#): > > wow, that is ridiculous…if they are going to help at all they shouldn’t take taxes back on their own money they lent out to attempt to save the big three and the economy. fucking idiots It just another opportunity for them to make money. ---
**Author:** ![sobo](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/sobo/32/5267_2.png) [@sobo](https://forums.speedlife.net/u/sobo)\ **Post date:** [February 2, 2009, 12:28pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/7 "2009-02-02T12:28:25Z")
Oh I get it! The government actually is just using the bailout as a front to steal as much money as they can from GM haha ---
**Author:** ![j\_espo1](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/j_espo1/32/7291_2.png) [@j\_espo1](https://forums.speedlife.net/u/j_espo1)\ **Post date:** [February 2, 2009, 12:34pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/8 "2009-02-02T12:34:25Z")
> [@focusinprogress](#): > > wow, that is ridiculous…if they are going to help at all they shouldn’t take taxes back on their own money they lent out to attempt to **save the big three** and the economy. fucking idiots the big 3 fucked themselves by knowingly and willingly putting out a crap product. Let them drown. ---
**Author:** ![Fry](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/fry/32/7284_2.png) [@Fry](https://forums.speedlife.net/u/Fry)\ **Post date:** [February 2, 2009, 12:38pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/9 "2009-02-02T12:38:00Z")
> [@sobo](#): > > Oh I get it! > > The government actually is just using the bailout as a front to steal as much money as they can from GM > > haha No, they just don’t want to change tax laws too. ---
**Author:** ![TradersBASE](https://yyz2.discourse-cdn.com/flex034/user_avatar/forums.speedlife.net/tradersbase/32/5321_2.png) [@TradersBASE](https://forums.speedlife.net/u/TradersBASE)\ **Post date:** [February 2, 2009, 12:40pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/10 "2009-02-02T12:40:09Z")
> [@j\_espo1](#): > > the big 3 fucked themselves by knowingly and willingly putting out a crap product. Let them drown. x2 Darwinism would provide more “hope” than our new prez could ever BS about as a platform. ---
**Author:** ![traumadog](https://avatars.discourse-cdn.com/v4/letter/t/8baadc/32.png) [@traumadog](https://forums.speedlife.net/u/traumadog)\ **Post date:** [February 2, 2009, 12:44pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/11 "2009-02-02T12:44:56Z")
@ Fry: > For accounting purposes, a warrant, like an option, is considered a “common-stock equivalent,” [http://vcexperts.com/vce/library/encyclopedia/documents\_view.asp?document\_id=76](http://vcexperts.com/vce/library/encyclopedia/documents_view.asp?document_id=76) So the bulk of the money that the government lent could be exchanged for stock at some point, at a predetermined fixed price (if it is exercised, that is). Theoretically, the Government could exercise that warrant and make a big profit if GM’s stock price rallies if GM recovers (depending on the set price of the warrant). So in a sense, it’s in the Government’s interest to not see GM into bankruptcy, as those warrants (like other stock) become useless. ---
**Author:** ![traumadog](https://avatars.discourse-cdn.com/v4/letter/t/8baadc/32.png) [@traumadog](https://forums.speedlife.net/u/traumadog)\ **Post date:** [February 2, 2009, 12:46pm UTC](https://forums.speedlife.net/t/the-fed-giveth-and-the-fed-taketh-away/62326/12 "2009-02-02T12:46:28Z")
> [@j\_espo1](#): > > **Americans** fucked themselves by knowingly and willingly putting out a crap product. Let them drown. Fixed. It’s about the rest of America (bankers, homeowners buying on credit), too.