[SteveR]

Through a bizarre coincidence, I met a guy last night who's an auditor who oversees large corporation financial interactions and we got to talking about GM. He wouldn't tell me if he was involved in the deal, but he was very knowledgeable about the GM deal to the point where he was referencing documents and reports that GM was handing over to the gov. He confirmed the story about GM trading debt for stock options and corporate percentages and went further. He explained that this was a premeditated move on GM's part and the point is to first acquire cash to spend and then to offer virtual stocks in return which requires no actual cash to return to the gov. The move is twofold; it boosts GM's credit and it puts GM in a position to now go get a loan from a bank for even more money, which is exactly what he said GM will do next. This will start the cycle over again. Once GM can't repay the next bank loan, they'll go to the gov for another TARP loan and since the gov now owns an even bigger percentage of the company, they'll be more inclined to hand out another loan, thus giving GM even more cash for free. He also said that once they get the bank loan they'll roll that loaned cash into an account and fudge the books and call that loan money profit and he's predicting GM in Q3 and Q4 of this year will declare a roughly $4-5 billion profit per quarter and that will actually be reflecting the money they got from the loan minus the actual loss they will have that'll be taken out of the loan.

He also went into detail about GM's accounting and operating details. He said that GM is so bloated and inefficient that in order for GM to stay afloat the way they are structured now, they'd have to sell 17 million new cars every year. That's roughly one new car per every fifth household every year. He said now that the gov has a controlling stake in GM, GM is now MORE likely to be inefficient because now the gov has a financial interest in not letting them fail.