What does the market know?

Here is that chart comparing the stock of New GM with the Dow. I sense a downward slope (for GM). What does the market know that Jonathan Cohn doesn’t. Maybe this. (Sample: ““How many large-cap IPOs have you bought over the last six months in which the issuer already missed initial expectations by 30% and were hit with senior management turnover?” ) …

Update: Megan McArdle adds up the costs of the bailout, and they come to $250,000 for each of GM’s 75,000 hourly workers. Of course there are lots of non-GM workers at suppliers, dealers, etc. whose jobs would also be lost if GM went under. That’s one reason I tended to favor the bailout. But Obama could have driven a much harder bargain with the UAW–one that would have given GM a better shot at surviving and served as a deterrent to future union leaders who might want to gamble with their employer’s solvency. Instead, the union has been rewarded for helping bankrupt a “too big to fail” concern. Bad precedent, whatever happens. And it’s hard not to be annoyed by the media-assisted hype directed at investors, plus the premature victory declarations from commentators like Cohn and Dionne. GM is still an iffy proposition, long term, as a North American operation. It has a lot of competitors, most of whom don’t have to destroy their corporate culture or deal with the UAW. … Even if it survives, as McArdle notes, taxpayer losses are likely to total 1-2 Rattner Units. (1 Rattner Unit = $11 billion). ….

  • torispelling

    Mickey, don’t forget the $15bn that GMAC still owes us! That’s gotta be logically considered in any ‘bailout’ calculations of GM, since with no GM bailout, there’d have been no GMAC bailout.

    And since financing for new cars and prime customers *never* dried up, what was the point of the GMAC bailout anyway?

  • truebearing

    Is Cohn in a bubble, or just another Obama shill? GM is doing better because of the problems in Japan and Toyota’s faltering, which can’t be counted as achievements by GM, or any of their cheerleaders either.

    Ford’s success doesn’t bear the Obama seal of Fascist Corporatism, but Cohn wasn’t paid to discuss that.