GM's IPO: Suckers, Found!

I was so desperate for topics today I read a newspaper. Some subjects it discussed:

Topic A: General Motors' IPO

I didn't think GM could pull off their IPO, but they did. It's especially impressive, in a better-than-expected kind of way, that government has reduced its stake to less than 30%.* (That $45 billion tax subsidy was just a gift, really. We don't want any stock for that.) Kausfiles has two official fallback positions:

1) Suckers: GM found a lot of them, even though a) by its own admission, it lacks "effective internal controls" over its finances; b) it's still saddled with the UAW, which is already pledging 'no more concessions' and even making some trouble; c) its Opel subsidiary is hemorhaging money  at a rate of billions a year; d) a high Opel official declared the IPO "premature" while noting that "there is still too much red tape and inefficiency;" e) it has surrendered a majority stake in its promising Chinese joint venture to its Chinese partner f) its bailout plan assumes it will maintain a market share of 19 percent, but its share most recently fell to 18.3 percent, part of a decades-long decline; g) who knows what accounting gimmickry was used to dress up the books; h) the government has intervened in GM's decisionmaking more than it's let on; i) we don't know if GM's new products (like the Chevrolet Cruze) will have traditional GM reliability--the company better hope not; and j) the name "General Motors' is now so tarnished that the company is removing it from auto show displays, hoping buyers will not associate "Buick" or "Chevrolet" with such a negative brand .... P.S.: GM stock purchasers won't be suckers, of course, if their shares rise. So far, they've risen 3.6 percent, even though the NYT reported that "several of the people involved in the offering said they expect to see a potential 10 to 20 percent jump in the share price on Thursday, typical for an initial offering."

2) It's all about China: Even if GM is now a solid investment, that might have very little to do with its future North American operations and everything to do with Chinese operations. Simply put, the most obvious route to big profitability isn't selling American-made Buicks to the Chinese, or even Chinese-made Buicks to the Chinese. It's selling Chinese-made Buicks in the United States--and all over the globe. Let the UAW try to organize the workers in Shanghai. ... Michigan Democrat John Dingell says he has "full faith that GM will continue to make good on the American taxpayers' investment in it ...and, most importantly, continue to invest right here in the U.S. and put Americans back to work." Alternatively, GM will decide to make a lot of money. If the latter course gets chosen, Obama's intervention still saved lots of jobs, but only temporarily.** And it helped create a branded Chinese competitor for Ford ...

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* Update: actually, the government apparently failed to get its stake to below 30 percent. The latest estimate is 33 percent.

** I favored the bailout, though I thought Obama should have driven a much harder bargain, especially with the UAW (whose contract would have been voidable in a normal bankruptcy). That would have given"new GM" a better chance of survival and served as a stronger deterrent to future executives and labor leaders who might put their firms at risk. ...

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Topic B--Steve Rattner　

What did Steve Rattner do to piss off Andrew Cuomo? Aside from, you know, possibly engaging in "fraudulent and otherwise unlawful conduct." The fight's getting ugly. Did Rattner support Ed Koch in the 1982 governor's race or something? ... Winner of the first day's spin: Cuomo. ... Rattner: "This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity." Well, you gotta start somewhere! The public pension business is so notoriously sleazy that a lot of people with "ethics and integrity" don't go into it. Rattner did ...

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Topic C--Midterms

Conservatives mildly disappointed that the GOP didn't gain 100 seats, cheer up! James Carville is pissed you got 60 ... He claims Dems could have held you to 35. ...

P.S.: Harry Reid benefited from outside groups funded by secret donors running anti-Angle attack ads. Why didn't this story get more play, and earlier play? ... 3:00 a.m.

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Topic D--The DREAM Act

Mark Krikorian seems awfully confident that the DREAM Act's partial immigration amnesty won't pass in the current "lame duck" session of Congress. He knows more than I do--but when I look down the list of potential swing senators, I get very afraid. Anti-DREAMers are supposed to rely on Lisa Murkowski? Lindsey "We're Gonna Tell the Bigots to Shut Up" Graham? Richard Lugar? Krikorian doubts Sen. Lugar's support for DREAM, given the possibility that he'll face a primary challenge in 2012, but Lugar's still a co-sponsor of the bill ...

P.S.: Here is Sen. Sessions' brief against DREAM ... 11:22 p.m.

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