Government Bailout

When the economic situation becomes so poor that companies are on the verge of failing, occasionally governments will step in to offer aid. This bailout by the government is usually only conducted when officials believe that, if they don’t support the company, it could structurally hurt the overall economy. This attempt to prevent the spread of contagion through the rest of the economy can come in the form of loans or capital.


When the financial crisis hit, U.S. government bailouts became available to many big corporations. Back then, president Obama claimed that the 500 million shares that taxpayers were investing in General Motors Company (NYSE/GM) at $33.00 a share were an investment…

For June, the U.S. created 80,000 new jobs, well below economists’ forecasts of 100,000. The unemployment rate remained steady at 8.2%. (Source: U.S. Bureau of Labor Statistics, July 6, 2012.) When looking within the U.S. job numbers for June, of…

Here’s the bottom line on the crisis in Europe: The only way the European debt crisis could be put temporarily aside is if the European Central Bank (the “ECB,” our equivalent of the Federal Reserve) prints money. Since Germany is…

Spain’s third largest bank, Bankia, was declared fine just a month ago… But, in mid-May, it was revealed that Bankia required a €4.1-billion government bailout. By the end of May, the government bailout required to help Bankia hit €23 billion…

U.S. consumer credit jumped in March 2012 by the most in over a decade (source: Bloomberg, May 7, 2012). Sure, we heard the usual bullish economists and election-hungry politicians say, “Here’s proof that consumer spending and consumer confidence is improving.”…

Do the politicians really have any idea what is going on? It was only a few weeks ago that the prime minister of Spain said the country’s banks were so sound that they required no government bailouts. Fast forward… Last…

I had the pleasure this week of reading General Motors' preliminary prospectus, all 542 pages of it. The GM public offering will be the second largest initial public offering (IP0) in U.S. history, second only to Visa's public offering of…