{"id":13595,"date":"2010-11-11T11:12:53","date_gmt":"2010-11-11T18:12:53","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=13595"},"modified":"2010-11-11T11:12:53","modified_gmt":"2010-11-11T18:12:53","slug":"new-math-or-an-old-game","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/13595\/new-math-or-an-old-game\/","title":{"rendered":"New Math… or An Old Game?"},"content":{"rendered":"

General Motors is preparing a public stock offering…\u00a0you know, because it’s primarily owned by the government and unions\u00a0right now.\u00a0\u00a0\u00a0 The sale is expected to raise $10.6 billion, most of which is\u00a0going to\u00a0the government\u00a0against the $50 billion bailout last year.\u00a0 Since government<\/em> is literally\u00a0us<\/em> (I mean, the $50 billion didn’t come from some savings account the Fed has\u00a0from working nights and weekends as a pizza delivery boy, right?), that means we<\/em> are selling an asset we<\/em> purchased with bail out money… back to ourselves<\/em>… and then putting the money we took from our left pocket into our right and claiming to have paid ourselves<\/em> back.\u00a0\u00a0Not sure, but I think there’s a nice big dollop of irony in there somewhere.\u00a0<\/p>\n

This is all well and good so far as socialist, potato-passing goes.\u00a0 I’m sure I’m not alone when I say that, while I don’t speak<\/em> political gobbley-gook, I understand it just fine.<\/p>\n

What bothers me here is the math.\u00a0\u00a0 The plan is to sell about 365 million shares at between $26 and $29 each, raising an estimated $10.6 billion.\u00a0 This will value the company at around $48 billion which, surprise, surprise, is Ford’s capitalization.\u00a0 As a matter of fact, if the shares sell near the high end of the range, GM’s capitalization will be closer to $60 billion – which means bigger and, ostensibly,\u00a0better than Ford.\u00a0 (Side note: Ford saw the problems ahead of time, made the difficult choices, accepted no public welfare, didn’t forever alter the bond market and our basic understanding of risk\/reward investing, came through the worst economic times the auto industry had ever seen and recently reported record profits… but they’re market capitalization is the same as or less<\/em> than GM’s? I suppose that’s the price you pay for actually thinking the rules of the market place should apply to everyone equally.\u00a0 Makes one wonder though, how happy Ford’s stock holders would be – and how much money they might be spending right now\u00a0– if Ford’s efforts had been properly rewarded in the free market and they were not in competition with the US Government.)<\/p>\n

Back to the math.\u00a0 Most of this\u00a0($10 Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

General Motors is preparing a public stock offering…\u00a0you know, because it’s primarily owned by the government and unions\u00a0right now.\u00a0\u00a0\u00a0 The sale is expected to raise $10.6 billion, most of which is\u00a0going to\u00a0the government\u00a0against the $50 billion bailout last year.\u00a0 Since government is literally\u00a0us (I mean, the $50 billion didn’t come from some savings account the […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[251],"tags":[],"class_list":["post-13595","post","type-post","status-publish","format-standard","hentry","category-big-mother","no-featured-image"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":6950,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6950\/the-bad-news-obamas-housing-relief-plan-is-a-giveaway-to-lenders-not-homeowners-the-worse-news-it-wont-work-anyway\/","url_meta":{"origin":13595,"position":0},"title":"The bad news: Obama’s housing relief plan is a giveaway to lenders, not homeowners. The worse news: It won’t work, anyway.","author":"Greg Swann","date":"February 19, 2009","format":false,"excerpt":"If you read the news this morning, you'll find Realtors all over the country rejoicing that President Obama has surged into the depressed real estate market on a white charger, bearing with him an heroic plan to rescue everyone -- borrowers, lenders and especially Realtors. No discouraging words? To the\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14022,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14022\/heads-up-america-slavery-is-not-somehow-virtuous-when-you-enslave-each-other-if-you-want-freedom-you-must-demand-freedom\/","url_meta":{"origin":13595,"position":1},"title":"Heads up, America: Slavery is not somehow virtuous when you enslave each other. If you want freedom, you must demand freedom.","author":"Greg Swann","date":"January 25, 2011","format":false,"excerpt":"Here's the political issue that matters: Government is crime. When your local City Hall tells you which trees you must plant in your yard, that's a crime against you. When your state taxes your income in order to give your money to people who did not earn it, that's a\u2026","rel":"","context":"In "Egoism in Action"","block_context":{"text":"Egoism in Action","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/egoism-in-action\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5244,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5244\/arthur-laffer-the-age-of-prosperity-is-over\/","url_meta":{"origin":13595,"position":2},"title":"Arthur Laffer: “The Age of Prosperity Is Over”","author":"Greg Swann","date":"October 27, 2008","format":false,"excerpt":"The author of the Laffer Curve in the Wall Street Journal:When markets are free, asset values are supposed to go up and down, and competition opens up opportunities for profits and losses. Profits and stock appreciation are not rights, but rewards for insight mixed with a willingness to take risk.\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3648,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3648\/mortgage-market-week-in-review-4\/","url_meta":{"origin":13595,"position":3},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"August 1, 2008","format":false,"excerpt":"Is it just me, or do Fridays keep coming around faster and faster? Maybe it\u2019s because I\u2019m so young! Any way, it\u2019s time for our \u201cMortgage Market Week in Review.\u201d We\u2019re going to focus on a couple of main topics for today: Jobs - the ADP report came out on\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":10254,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/10254\/goldman-sachs-and-gods-work\/","url_meta":{"origin":13595,"position":4},"title":"Goldman Sachs and God’s Work","author":"Sean Purcell","date":"November 9, 2009","format":false,"excerpt":"I guess I haven't reached that point in my life yet when I'm so jaded (or is it cynical) that nothing will surprise me.\u00a0 I say this after reading an interesting little article in the London TimesOnline.\u00a0 They had the chance to interview Lloyd Blankfein, the Chairman and CEO of\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8704,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8704\/mortgage-market-update-what-difference-does-gm-make\/","url_meta":{"origin":13595,"position":5},"title":"Mortgage Market Update – what difference does GM make?","author":"Tom Vanderwell","date":"June 1, 2009","format":false,"excerpt":"Well, here we are on the morning many people thought would never come.\u00a0\u00a0\u00a0 Many people said they never expected that GM would actually go under.\u00a0\u00a0 Well, under they are with approximately $178 Billion in liabilities and only $82 Billion in assets (and I think the $82 Billion includes the money\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=13595"}],"version-history":[{"count":4,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595\/revisions"}],"predecessor-version":[{"id":13599,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/13595\/revisions\/13599"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=13595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=13595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=13595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}