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June 1st, 2009
09:19 AM ET

Bondholder furious over GM bankruptcy

[cnn-photo-caption image= caption="GM bondholder Debra June speaks to CNN's John Roberts."]

General Motors turns to bankruptcy today in the hopes of finding a new start. The move comes after a majority of those holding $27 billion in GM bonds agreed to swap that debt for a stake in the new General Motors.

Debra June is a small bondholder who six years ago invested $70,000 in GM bonds. She predicts that investment is now worth less than $200. She spoke to John Roberts on CNN’s “American Morning” Monday.

John Roberts: You invested $70,000 in GM bonds some six years ago. As a result of this deal, that is going to be converted to equity shares. What's that investment worth now?

Debra June: Well, what happened, John, I got this booklet at the original thing. This is a 200-page booklet and they sent this in the mail and the offering was two shares of stock for every $1,000. That's 140 shares of stock. They said originally in the booklet it was going to be 225 shares, but as you kept reading the booklet it said they were going to convert that to 101 reverse-split, which would be two shares of stock. $70,000 for 140 shares of stock.

There was no way I was going to take the deal. Then they came out and they sweetened the deal. And I tried to contact General Motors. I left a message with the people I called up. I talked to the people on the phone. I e-mailed two e-mails, “Please let me know what the deal is.” I'm with GM Bondholders Unite, the 60-plus group and also the Main Street Bondholders. What they're doing to the people is ridiculous. It's horrible. You're wiping out common people that saved money. I'm not a corporation.

Roberts: No, you're a school teacher, we should point out. So $70,000 is a huge amount of money to you.

June: It is. It is. And it's a shame. I mean what they're doing, they're saying 10% and this and that. I don't know what they're doing. People out there have saved their money. We've done the right thing. I pay my bills and here all of a sudden, they want to give me two shares. 140 shares of stock.

Roberts: And that stock, all in total is worth about what, $200?

June: I believe so right now.

Roberts: Maybe less than that.

June: Even less. When they regroup, even if the stock was $10. That's unbelievable. I mean I can't imagine someone doing something like that.

Roberts: So Debra, what was your reaction when you heard General Motors was going to go into bankruptcy? You said you resisted this plan, you didn't agree with this. The major bondholders were the ones who said go ahead and do this debt for equity swap. What did you think when you heard they were going into bankruptcy and that was the deal?

June: Well, I'm in shock. When I bought into GM, I thought it's a safe thing. I bought six years ago. I always thought it was safe even when the government came in. I was so excited, I said "Well they’re going to take over." But Obama’s task force, these people came in, they didn't negotiate. We had no say. The private investor had no say in the matter. They dealt with the big corporations. Obama is for the people, he said. How can you be for the people? How can he do this?

Roberts: So do you blame the task force? Do you blame the company, the unions? Who do you blame for getting in this situation?

June: I blame, originally, GM, for letting it go like this. It's like Bernie Madoff was their bookkeeper. It's ridiculous, but also for the task force to come in and not let anyone from the main sector, just a representative to go in there and try to negotiate. They never let us do that. I would have given...I'm not joking on this, I would have said to GM, "Here don't give me any interest, just take that." That would help them immensely… I mean to send this booklet out, the task force actually did this?

Roberts: So do you have any hope of recouping your investment? If this company gets lean and mean and agile, do you have any hope you can recoup that $70,000 and beyond that if the price of the stock goes up?

June: Nothing. Right now, I'm not even in on the new deal, the sweetened deal, I couldn't even get in on it. And that's - and it's in the paper. They didn't care about the people. It's in the paper.

Roberts: So you really feel robbed, do you?

June: I feel robbed. I know that there's an attorney out there for the GM bondholders Unite. That’s the gentleman Thomas Lauria and he's supposed to represent the small people. I hope and pray the judge, whoever gets this, is going to say “Wait, this isn’t right what's happening to the people, it's not right what's happening to the workers.” The dealerships are going to close. It's going to be a trickle down effect but they're taking income from me and thousands and thousands of other people who are in worse shape than I am and it's not right.

Roberts: We'll keep following this and maybe we can stay in touch with you and keep checking back.

June: Please, please people out there – contact your congressman. Do something. Say it's not right. I remember Michelle Obama said she was not proud of her country until her husband was in office. I'm a school teacher. If I was teaching her children, would she say she was proud that this is happening to a common person like myself? I mean you can't, you can't do it.

Filed under: Business
soundoff (700 Responses)
  1. JLo

    Let me get this argument framed right: The government funds GM for six months to delay bankruptcy. Therefore, bondholders are entitled to have the government indemnify their risk? If the government had stayed out of it, the bondholders would have had nothing six months sooner. I'm not getting the argument.
    The government insures (some) banks and S&L's, not corporate bonds. This bondholder wants a disproportionate share of voice in deciding how this financial mess should be worked out, and wants the federal government and Michelle Obama to provide that amplification. Good luck with this line of thought...

    June 1, 2009 at 12:22 pm |
  2. Fed up with our Government

    For all of the people who say they do not feel bad for the GM bondholders, WHAT IS WRONG WITH YOU?

    This has less to do with the bondholders as individuals than what our government stepped in and did TO THEM. Buying bonds is not the same as buying stocks. You are a preferred debt holder who should be paid back first in a case like this but our government stepped in LIKE A DICTATORSHIP, and forced the companies hand into dealing with corp's and unions before taking care of the bond and preferred stockholders, which BY LAW, should have been taken care of first.

    She was entitled to get a fair shake from the bankruptcy, not all her money back, but she was supposed to be negotiated with first, not last or 4th.

    There is risk in everything and she should have known that, but she shouldn't have been screwed by our government's policies more than was required by law. It's like they went a little extra on the middle-class individual bondholders.

    And stop with the race card... all she said was she was wondering whether Michelle Obama would be proud of how our country/government is handling this situation since it affects the middle and working class people of this country.

    June 1, 2009 at 12:22 pm |
  3. Richard

    I'm amazed at how many people in this forum don't understand the difference between playing the stock market and investing in bonds.

    June 1, 2009 at 12:22 pm |
  4. Jessica

    Why myself, and many others, fail to feel "compassion" for someone such as this woman, is because its called "THE STOCK MARKET"

    there's no real logical way EVERYONE who invests can make money, in fact, it requires that MOST lose money (kind of like Vegas or a Pyramid Scheme).

    Whether GM went bankrupt or not, did she not notice she lost ALL her money...just like everyone else in America?

    I'm confused why SHE is more important that anyone else who just lost all their money? (does she not realize EVERYONE else lost money too?)

    June 1, 2009 at 12:22 pm |
  5. Frank

    Carl, you are wrong. There are other claims that come first such as salaries and wages, taxes, etc. The loan the government provided recently also has a higher priority. The problem with GM is/was that there liabilities exceeded their assets as they have not been profitable for a while and unwilling or unable (gotta love the unions) to make painful cuts.

    June 1, 2009 at 12:21 pm |
  6. David

    Reading some of the comments on here makes me realize that we truly do have a lot of ignorant people in this country. Here's a hint guys, before posting stupid comments about bond investing, please do some research. Investing in bonds is not the same as investing in stock, even though some bonds may be purchased with a conversion option. Companies issue bonds all the time. Those bonds are secured by the assets of the company so, in the event a company files bankruptcy, the bondholders are paid before any other creditor. This means the bondholder is never at risk of losing his or her intitial investment. The only "risk" involved with bonds is the premium or discount associated with the interest rate and even that is not really a risk. Make no mistake about it, your buddy Obama destroyed the risk free nature of the bond market and turned it into the risky venture some of you idiots believe it to be.

    June 1, 2009 at 12:21 pm |
  7. Mick

    Hey Gary, congratulation on posting the stupidest comment in the thread. "The stock market is made of free market company’s who want to borrow $ to increase their businesses". No, that's not what the stock market is, you uneducated moron. The stock market is made up of individuals and companies betting that the performance of a company will be better (or worse) than it was in the past. PERIOD.

    Companies borrow money through the bond market or commercial paper or bank loans not the stock market. Idiot.

    See that’s why you bigoted right wing illiterate hick morons shouldn’t vote, speak or really even be Americans.

    June 1, 2009 at 12:20 pm |
  8. Ken

    GM is bankrupt, finished, kaput. They invested in a company that has gone belly up. Even if GM had gone the standard bankruptcy path, the majority of these bond holders would have gotten cents on the dollar. They keep acting like they would get most of their money back. But that's assuming someone would buy all of GM's assets and at prices that could pay off existing debts. And that would never happen.

    Of course, the bondholders don't mention that in a standard bankruptcy, GM could be released from all of it's pension, retiree medical, and car warranty requirements. That's what they really want as that would get GM enough money so they can pay off the bondholders (along with sales of assets). But of course this means screwing over every GM Car Owner and every former GM employee. SO what the bondholders really want is for everyone else to be screwed by the bankruptcy while they get their money.

    SO while I do feel sorry for the little people, the small bondholders who have lost money, their desire to get their money back at the expense of so many others is rather self-serving and greedy. And, any investment broker will tell you to DIVERSIFY. You should never, ever, have more that 5% of your net worth in one companies stock. And if you did have most of your money in GM, then sorry, you lose.

    June 1, 2009 at 12:20 pm |
  9. JCP

    Ignorant investors like this women are an embarrassment to our country, If you buy bonds is a company you must be prepared to take on the risk that the company might fail. Failure to diversify is simply stupid.

    Unsecured bondholders fall in front of common shareholders but BEHIND all secured debt. Anyone who doesn't know this and has not looked at GM's secured debt should never have made the purchase unless it was an outright gamble. No one blames the government when you lose at the gaming tables in Vegas.

    June 1, 2009 at 12:19 pm |
  10. Maggie

    Very sorry – but Oh Well! I lost money, too; but not w/GM.
    Stop whining and get over it. The economy is in big trouble and everyone is hurting. You are no different than anyone else. At least
    you're young enough where you have the time to start over. The people
    that are in real trouble are the retirees and close to retirement. There is no chance for them. I hope teh government has plans to take care of them.

    June 1, 2009 at 12:18 pm |
  11. Big Beeje

    Nobody had to lose any money during the downturn other than thru just plain lazy money management. While most people saw their portfolios drop 36 to 42 percent, mine rose 3.3% with lower risk than any of you faced with your silly 6% "low risk" crap. And, "diversity". Do any of you even have a remote clue as to what that really is??? NOT! What you all lost is your own fault!

    June 1, 2009 at 12:18 pm |
  12. Carol

    I also totally agree with FL450 .. and it seems June wasn't carefully weighing her chances before the fact. PLUS not paying attention to exactly what it was that Michelle Obama said when her husband was running for President. Looks to me like she is wanting someone to blame rather than admitting her own poor choice. Stuff happens and people like June usually don't own up to their responsibilities.. and always want to blame "the other guy". Suck it up and be happy you have a job!

    June 1, 2009 at 12:18 pm |
  13. telly

    Also, correct me if I'm wrong .. But if GM had entered bankruptcy last year (due to lack of government aid), wouldn't all stock and bonds be reduced to $0 value ? I just don't see ANY government agency could be blamed for this ? Don't people understand that it would have been MUCH WORSE if GM had been left alone to fail by themselves last year ?

    Honestly, american cars (besides hot-rod dream cars) have not inspired me for a long time in regards to design, reliability (had bad experiences), fuel consumption, and resale value. And don't get me started on the customer service ... I just a patriotic as the next guy, but something about throwing money into a shaky product ...

    June 1, 2009 at 12:18 pm |
  14. Myrna

    It is her own fault, I don't feel sorry for her a bit. She said she thought GM was safe, nothing is safe, she might as well spent 70K on lottery tickets. No sympthy here.

    June 1, 2009 at 12:18 pm |
  15. JMel

    This is exactly what happens when the government gets involved in big business. Obama and his crew are destroying the ideas of capitalism and what has built this country. Ever since FDR we have been sliding further towards socialism and we are almost there now. The bondholders should be outraged. It seems outrageous that the Unions continue to dictate and dominate tbig business. Are country was great when we protected all individuals rights, once again we sacrifice the "Forgotten Man" (see Sumner), for special interest groups. Bail outs are not sustaninable let capitalism work the way its supposed to and leave businesses alone to tand or fall by themselves.

    June 1, 2009 at 12:17 pm |
  16. Luke

    Some of you people are absolute geniuses.

    Definition of a bond-In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals.

    This was not a stock, it was a contract. She gave GM $70,000 and in turn they owed her $70,000 plus interest at its maturation date. She was a creditor not a stock holder. This is the government essentially saying this contract you signed is void because we want to own 60% of GM so you can take half of 1 percent of your bonds in worthless stock.

    June 1, 2009 at 12:16 pm |
  17. theo

    Why would you put all your eggs in one nest... thats stupid.. stocks arent a sure thing.. so dont go crying on tv who cares... and what does michelle haveto do with this... and you stupid republicans in here have something negative to always say if it wasnt for the obama admin and treasury dep gm would have went out of business its not obamas fault that the economy is bad it was bad wen he got into office he is just trying to clear it up and help troulbled companies.. we haveto spend to get out of it.. and we are in this situaation because of republicans no taxes no raising taxes well how in the world are you to pay for the false war and all thes other prorams and pay down debt without taxes we cant pay down anything raise the taxes so we can move on its a new age republicans are dead think with your wallets dems bring people up repubs bring us down and a women derserves the righ to chose... new rule if it doesnt effect your life shut up

    June 1, 2009 at 12:16 pm |
  18. Jim

    Ok guys... She was a bond holder, not a stock holder. As a stock holder, you are open to a great amount of risk. In the event of a bankruptcy, bond holders are the first to receive compensation. The risk level is lower and the rates of return are lower. Essentially, what GM did to bond holders was it convinced them to give up their secure status in exchange for a promise of stockholdings in a new GM. Apparently, the stock swap was not equivalent ($200 doesn't equal $70,000). The bond holders should have just held out and let GM completely dissolve instead of becoming this "new company." At least then they would have gotten more cents on the dollar back. This is a sweet-heart deal to keep the unions in work while investors, who have provided the capital for this company to run for the last century, are being left out to dry.

    June 1, 2009 at 12:15 pm |
  19. Obama is Bad


    So in reading this, no one has any sympathy for the bondholders. The general concensus is that they took the risk and there.

    Ok, I accept that, we all have lost money. But, then why are we bailing out homeowners who took out mortgages they knew were risky? Come on guys, when you can barely afford an interest onnly or low interest VARIABLE mortgage, you know you are taking a risk that the market will stay strong and the interest rates will drop. They took a risk and lost, and we are making them whole in many situations. Yet, they do not seem to be getting the same response. Hmmmm.

    These bond holders held 90% of the debt of the company. They would have done better if the company just liquidated the assets. At that point they would have gotten at least 20% (for which this bondholder would have gotten $14000).

    Maybe Obama will treat this like Chrysler and screw over the bond holders and end up giving the makority share to the unions (who backed Obama financilaly in his election).

    June 1, 2009 at 12:15 pm |
  20. Sid

    Im sorry... but right off the bat something doesnt add up.
    The bondholder deal was that every person/enity would receive 225 shares of stock for every $1000 that was owed to them by GM...

    Yet this woman goes on CNN and say that she was only going to receive 2 shares of stock for every $1000.... That is nowhere near close to correct. The true number of shares she would have received was 15,750, not 140 or whatever she said.
    Each share would have a value of around $4.44.... not $500 as she asserted. And who in their right mind would buy a share of a GM at $500?
    Why did the person doing the interview call her out on her faulty math?

    June 1, 2009 at 12:15 pm |
  21. Frank

    Well, at least she earned interest over those six years. A 30-year GM bond issued in 2003 has a coupon of 8.375%. She has earned almost $35,000 with this investment but lost the prinicpal. It's a risk she took. If she got bad advice, sue your broker.

    June 1, 2009 at 12:15 pm |
  22. Mark

    BOO-HOO!!! Go cry on somebody elses shoulder. Just because you invest in a company doesn't entitle you to's a little thing called risk. Perhaps you should have invested in a solid company like Toyota or Honda instead of the poorly managed GM.

    June 1, 2009 at 12:15 pm |
  23. Annie

    It appears that this country can no longer stand hearing someone upset about their problems because they are met with attack after attack, especially if they happen to mention the Obamas and then the vitriol spikes to even greater heights. If no one is allowed to make comments anymore about anything because they are told to stop whining or that they shouldn't have been so stupid in the first place – then what is the change that was supposed to have arrived with this new President? Why is is so hard to show empathy to her situation along with all the other GM workers who have been led on a fantasy trip of staving off bankruptcy when that appears to have been the government's plan all along? I also feel sorry for people who are caught in the credit crunch through no fault of their own, also for people who are being foreclosed because of job loss, and I don't feel I have to blame it all on them for being caught in a world wide credit problem. Why are we in such a state that no longer can we just feel sorry for someone without having to ridicule them to make ourselves feel somehow superior? What kind of atmosphere are we self perpetuating where it appears the more outspoken, rude, or downright vicious blog posters get the most webspace?

    June 1, 2009 at 12:15 pm |
  24. SPB

    What most people do not seem to grasp is that with investment comes risk. Yes, bondholders are supossed to hold a "secured" position when a company liquidates, however, so are parts suppliers and the like. In the case of GM, everyone is going to take a hit. June should be happy that money is the only hit she will take. Some of those suppliers etc provided goods and services for which they will never be reimbursed. June at least has some hope of recovering some of her capital in the stock swap. As for those who insist on blaming the President, tell me, what would your answer have been? These are extraordinary times, if the rest of the economy was solid and the car companies were an isolated issue, we could probably have handled it alot differently. With the entire economy on the brink, could we really have justified allowing the total destruction of those companies and the massive amount of unemployment, across the spectrum of everything to suppliers, transport companies etc. that would have come with it? No matter what solution had been reached, someone, somewhere would have been unhappy, very unhappy.

    June 1, 2009 at 12:14 pm |
  25. Mike Rice

    Listening to the comments definitely widened my opinion. I agree that speculation is a risky business. You gambled and lost. Why do you think casinos make so much money. Because most gamblers lose. Quit whing.

    June 1, 2009 at 12:14 pm |
  26. Guiller

    If welfare recipients feel that they'll never work hard or long enough to save 70k towards their retirement, then they'll never know what it's like to have a savings and then taken away from you. but if the gov took something away from them, they'd be the first one to complaint. Let me teach you a little empathy, just imagine that the Gov took away the money from your drugs and alcohol fund. Now it hits home doesn't it?

    I like the teacher analogy this lady used when mentioning Michelle Obama. Has nothing to do with hatred. She has no hatred towards Obama for a non-fictional comment that Michele Obama made. Oh yeah, I forgot, the truth somehow equals hatred. That comment, however worded by Michelle Obama is still a disgusting comment.

    June 1, 2009 at 12:14 pm |
  27. Tom

    Bonds are a necessary part of an investment plan. If you hold them to maturity you get your money back and you've had the income benefit. The only real risk with bonds is if the issuer goes bankrupt as in this case.

    June 1, 2009 at 12:14 pm |
  28. skipt

    She put it in during the Bush administration, so it must be Bush's fault

    June 1, 2009 at 12:14 pm |
  29. joedoe_2

    I can't believe the number of people on here who don't know the difference between stocks and bonds, it's probably says more about why we all are in this financial mess than anything else. Just think where American jobs (your jobs) would be if the people with spare money decide to stop lending.

    June 1, 2009 at 12:14 pm |
  30. Bob

    Please try to understand the difference between a bond and a stock. Both have risk but at vastly different levels (at least theoretically). Stock is ownership and if the business goes bankrupt you have nothing if the liablities exceed the assets. Bonds are a liablitiy of the company and are secured by the assets. Bonds get paid interest while stock can benefit by an increase in market value and dividends, if any. The GM bondholders should get first claim in bankruptcy before the unions and before the government. This is where Obama and his crew are rewarding the wrong people and hurting the others. This is not the role government should take although, unfortunately, it may be just the beginning.

    June 1, 2009 at 12:14 pm |
  31. John

    Please, I would feel sorry for this lady if she didn't whine that her gambling didn't work out. Hello, investing in a public company involves RISK, including the possibility of loosing all of your investment. That's why you do not gamble with money you can not afford to loose.

    I bough a rental house for $291,000. It went up to about $350k, then the market crashed. I could sell it now for $200k. Am I happy about that, no, but I am not complaining. I gambled in real estate, but I gambled knowing that if that market could crash so I made sure I had the resources to absorb the loss or ride it out.

    And what, Obama is at fault? Why, because he won't have me the taxpayer bail you out because you made a poor investement? (He's already done plenty of that anyway). Take responsibility for your own actions. You put all your eggs in one basket, gambling $70,000 on one company. The company failed, you lost your money. I'm feel bad for people this happened too, but you have no one to blame but yourself.

    – John

    June 1, 2009 at 12:13 pm |
  32. Matt

    And people want the government to take control of health care!?!?! Imagine what will happen if...when the government controls health care. This is only the beginning.

    June 1, 2009 at 12:13 pm |
  33. Iowa Resident

    CNN and its viewers never fail to dissappoint.
    This very same story during the Bush administration would have brought "Burn Cheney and the rest of those business loving republicans" bile from the CNN lemmings.
    I am absolutely stunned to see this new group of Obama-fanatics all of a sudden professing passion and undying faith in pure capitalism as they seek to hide the ugliness of the ill-concieved and investor-hating Obama actions that are all about targeting the Michigan block of delegates.
    And if its OK for Michele to hate her country unless we vote her husband in, why isn't it OK for someone else to say they hate thier country when the government mandates a rip-off of the little guy? Come on folks – at least try not to be so transparent.

    June 1, 2009 at 12:13 pm |
  34. GREG

    It boggles the mind how many here are so quick to judge and call her stupid, yet they OBVIOUSLY have no clue of the basic differences between a stock (equity) and a bond (debt ).

    She is the victim of ignorance and probably bad investment advice. This isn't uncommon among educators I might add. Most have little or no real world experience or the common sense that comes along with it. When you've been in academics your entire life, you tend to have a VERY different idealistic view of the world and seriously lack the pragmatic wisdom that comes from living outside of education. They play an extremely important role in our society, but there should be controls in place to ensure a well rounded educator.

    To REALLY simplify the issue, she let GM borrow all of her money without anything to secure repayment of interest or principal.

    June 1, 2009 at 12:13 pm |
  35. TINA

    This invenstor has a right to be angry. She bought bonds. In the event of a bankruptcy, a company's debt holders are supposed to be reimbursed first, ahead of shareholders and the union.

    Obama chose to override the bankruptcy laws and move the unions ahead of the bondholders (obviously thinking of 2012 when he will be reliant upon unions to foolishy re-elect him). This was wrong and he shouldn't be allowed to get away with it.

    The bondholders should be made whole first and if there is anything left, the let the shareholders fight over the scaps That is the way bankrupcty works. FIRST LIQUIDATE THE COMPANY TO PAY BACK THE HOLDERS OF THE COMPANY'S DEBT, then divide whatever is left between the shareholders / unions.

    Obama has set a dangerous precedent by overriding common sense bankruptcy laws and he should be voted out of office in 2012 for doing this to GM bondholders.

    June 1, 2009 at 12:13 pm |
  36. VL

    To everyone claiming that owning bonds (rather than equity) makes this woman's situation different: – If the U.S. government had not stepped in with tens of billions in aid, GM would have defaulted a long time ago on all of these "safe" bonds and this woman (and the other bondholders) would be getting even less. The U.S. government probably deserves to have even greater than 60% ownership of GM considering how much money its given in the bailout.

    The union, however, should be left with nothing. They bled GM dry and now they want the government to step in and pay for GM's obligations. Why should the taxpayer have to insure GM's ridiculously bloated contract with the union? The union made their deal with GM, and if GM can't pay, then that should be the end of it. If the world were fair, the union would receive nothing.

    June 1, 2009 at 12:12 pm |
  37. Alisha

    Gary, did you not realize we elected a new President? Sounds like you are talking about Bush...and remember, this GM collapse started during the Republican/Bush/Cheney administration. It takes a long time to harvest from a single seed and this seed was planted within the last 8 years.

    I am really tired of you cranky old white men complaining about Obama, get over it! She invested when a Republican was President...that was her fault. She was probably dumb enough to vote Republican or not vote at all.

    June 1, 2009 at 12:12 pm |
  38. BeefMasterX

    A bondholder has secured rights. Chairman Obeyme is going to end up with egg on his face as the company drags the economy down from the lawsuits that are generated from his poor decision making.
    To paraphrase our fearless leader-
    "Only government can make it worse than if it were left alone."

    June 1, 2009 at 12:11 pm |
  39. JHK

    Gee, who ever thought speculation carried risk?

    Especially as well as US auto makers have been doing the past quarter century?

    I can see why it's Obama's fault though, since GM went hat in hand begging for help. It certainly isn't GM's fault, not a bit.

    June 1, 2009 at 12:11 pm |
  40. Carl

    Umm...people, you're missing a very key element here...June didn't invest in the stock market...she bought bonds. In our laws, bondholders are supposed to be reimbursed from the proceeds of a bankruptcy FIRST. They aren't supposed to take a back seat to the unions, the stockholders, or even the government. I'm no lawyer, so I may be misinformed, but from my perspective as a "Joe Average" investor, the way the bondholders have been treated by our government in this "deal" is illegal, and should not be allowed by the bankruptcy courts. If we Americans allow the Obama administration to have free-rein in the way the financial and automobile industries are restructured, who's next? Those of you who accept these actions will deserve the chains this government is putting on us and our future generations. Write your congressment to stop these actions...not because June lost her money, but because they are wrong, and they are illegal.

    June 1, 2009 at 12:11 pm |
  41. Bill

    Vonnie . . Haters? Liars? The correct comment Mrs. Obama said was

    "for the first time in my adult life I am proud of my country because it feels like hope is finally making a comeback.”

    Beyond belief someone would correct someone when they them selves are wrong. "AS" was not part of her comment. For myself I have ALWAYS been proud of my country. And yes President Obama and his administration screwed this up big time. Government Motors is dead. What's next, Health Care.

    June 1, 2009 at 12:11 pm |
  42. Mick

    I always enjoy reading the comments of the reactionary right-wing, especially those who are claiming "Obama" ripped off the GM bondholders. Really? In what way?

    Let's just speculate that the government did not intervene and GM had gone bankrupt in March. Who would be left to buy up GM's assets? Not Chrysler or Ford since they're struggling too. Are any of you right-wing economists in the market for a SUV factory or automobile assembly robots? There are no automakers anywhere in the world who would have bought GM's assets at any amount resembling their actual worth.

    Also, don't forget this right-wing financial geniuses, the Chapter 7 filing of GM would have touched off a cascade of financial system shocks much more devastating than AIG and unemployment would now be hovering around 17-20% and the Dow would now be hovering below 5000 because Chrysler and Ford along with their thousands of supplier companies and dealerships would have collapsed as well. Of course, then you would all be whining about "why didn't Obama save the auto industry".

    And to "NOT AGAIN", you are truly ignorant and apparently unable to use Google or Yahoo search. MCI and Enron both happened on G. W. Bush's watch. Bernie Ebbers and Ken Lay were both big Republican campaign contributors, including to Bush's 2000 campaign, not Democratic contributors. But, being a reactionary right-winger, you're not one to let a few pesky facts get in the way of your argument.

    "Investing for Dummies" type books always begin with the warning to "diversify your portfolio and select a risk level you are comfortable with". If you want a low-risk portfolio, invest in Treasury Bond or guaranteed Municipal Bonds or FDIC insured CDs and live with the lower returns. The second lesson in these books is always "never invest more in stocks and bonds than you can afford to lose". Perhaps Ms. June should have done her own due diligence by occasionally consulting Standard and Poors' website or one of the other bond rating companies to see how they had GM rated and then adjusted her portfolio accordingly just like millions of other Americans do. It's unfortunate Ms. June didn't bother to pick up an investment book or watch a few cable news shows on the market and investing, then she wouldn't be in her self-inflicted mess.

    BTW, if one reads in what asset class the "investment gurus" on TV park the overwhelming majority of their portfolios, it's invested in Treasury Bonds and Municipal Bonds not in the stock market. Food for thought for all you would-be Warren Buffetts out there.

    June 1, 2009 at 12:10 pm |
  43. Mike

    Apparently, the majority of you are idiots. So, let's start with the definition of the word bond:

    Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). (source:

    Ok, got that? Good. You know what other word has a similar definition? LOAN.

    You see, there's not a lot of risk to being a bondholder as opposed to a shareholder. (On the same token, there's not a lot of reward since all you get is interest on the bond, but that's another point.) The bond's principal is pretty much required to be repaid, even if bankruptcy is declared. This was a special case because it was unilaterally decided that anyone that held a bond was looking for a government handout. Add to this the fact that she, along with other smaller bondholders like her, weren't even represented at all during the negotiations, and basically, she got robbed.

    So, I guess the moral of the story is: don't get lumped up into a batch of other people that are earning the government's ire. Good luck trying to figure out if you're in that batch or not before it's too late.

    June 1, 2009 at 12:10 pm |
  44. Adam

    All I have to say for this women is why would you put so many of your eggs in one basket. While bonds are considered a fairly safe investment, there are still many different types of risks that you should have considered and done your homework. If you wanted a completely safe investment that had no risk of default then you should have gone with US treasuries. I feel no sorrow for anyone in this market that lost big on dumb gambles. If you were actively watching the markets and understood risks then you would have invested your money into many different sectors of the economy and you would only be down 20 or 30 % based on your investment strategy. No one should feel sorry for anyone who doesn't diversify their holdings. Anything is possible in the global market place. Everyone needs to be aware of this and think before they invest their nestegg into a sure thing.

    June 1, 2009 at 12:10 pm |
  45. Someone who cares

    While it may be true that investments necessarily come with a degree of risk, and no one has the right to feel entitled to a certain amount of returns, the fact that the federal government has gone in and virtually mandated the bankruptcy arrangements for a private company should be cause for concern. FL450 said that this our economy is a "free enterprise, capitalistic system," yet, it would seem that creditors have been completely shut out of the entire process. In the Chrysler bankruptcy, the Obama administration blatantly violated bankruptcy law when they circumvented the secured creditors to pay off the Union. Obama then had the nerve to call the holdout creditors, who simply wanted what they were entitled to *by law,* greedy. You guys are missing the point. It's not about the amount of money that Debra June did or didn't receive. It's about the fact that private investors who bought a share in GM now have no share in its bankruptcy proceedings. It's about the Obama administration's dangerously cavalier attitude toward established legal processes designed to protect property and contracts in what is supposed to be a free market society.

    June 1, 2009 at 12:10 pm |
  46. Bill

    I'm sorry the lady lost her money, it is a shame when Americans invest in something that they think is safe and then loose everything. Those that said it was a gamble were right, it is, however, saving and investing was a way of life that was intended to give a comfortable income for people later in life. I have always bought chevy's but I'll never own another one. I sure hope some of you out there are paying close attention to what the government is doing. What happened to this lady will happen to others again and again. The government is attempting to take over key industries and we've still got another 3 1/2 years for Obama's socialization project to completely socialize the country. As a Rebublican I would hope that all Republicans will refuse to buy a General Motors vehicle. Maybe by completely breaking General Motors we can send a message to the government that BIG government is not something we want.

    June 1, 2009 at 12:09 pm |
  47. Dave M

    I don't get it. What does she expect would happen to her investment if the company she invested in goes bankrupt? Next time, don't make a bad investment. Many of us have lost similar amounts in 401k value, but that's the nature of investment is our perverse system.

    June 1, 2009 at 12:09 pm |
  48. Miscjones

    Now, how did this end up with Obama to blame?
    Get real, if you have $70K to invest, learn to diversify, or maybe Obama is to blame for not teaching investors at large this golden rule that has been around since Biblical times.
    Shame on you Obama for not being our financial advisors the past 2000 years.

    June 1, 2009 at 12:09 pm |
  49. jblock

    I agree with June, she invested in corporate bonds, not the stock mkt., she was right to believe that it would be technically "safe". I think that the Government didn't have any business taking control of GM.

    June 1, 2009 at 12:09 pm |
  50. Brett

    It's stories like this that make me glad I invested my entire nest-egg in Beanie Babies. Sure the money is gone, but it sure is hard not to be happy with so much cuteness around the house.

    June 1, 2009 at 12:08 pm |
  51. Steve

    If MS June invested more than 5% of her assets into one companies bond–especially a company that's been declining for nearly 30 years–she shouldn't be investing at all.

    It's too bad as she probably did more researched before buying her last car than she did before her unfortunate investment.

    June 1, 2009 at 12:08 pm |
  52. Julie in KY

    Do you people not know the difference between being a bondholder and a shareholder? They are two very different things! The people who bought bonds agreed to accept lower rates of return on their investments in exchange for the less risky status of being secured creditors of GM.

    Before the current administration began to try to dictate the terms of auto maker bankruptcies, being a secured creditor meant something. And the security normally associated with being a bondholder is what led lots of ordinary individual investors, small pension funds, etc. to buy bonds from GM and Chrysler when they went to the public, instead of the government, to try to raise the money they needed to keep operating.

    Now the government is putting pressure on these bondholders to give up their lawful place at the front of the line of creditors of GM and Chrysler so that these two companies, that were failing even before the current economic crisis, will have one more shot at survival, and so that the administration won't lose face with its union voting base.

    To add insult to injury, when Chrysler bondholders attempted to assert the protections that the law provides to bondholders, the President resorted to publicly calling them "greedy" and stated that he does not "stand with them." So to make this clear, the President does not stand with individuals who are attempting nothing more than to assert those rights that they are entitled to under the law. I hope all of those individuals who the President has announced that he "does not stand with" remember that statement four years from now, and refuse to stand with him then.

    June 1, 2009 at 12:08 pm |
  53. Eric

    People, a bond is different than a stock. Therefore, the risk involved is much much lower. Yes, there is still risk, but bonds are not traded on the stock market (as stated by a previous poster). I feel like I am reading the transcript from a Jay Leno Jaywalking segment.

    A bond is like a reverse loan (given by the person to the institution instead of vice versa). It is a legally binding contract that has a par value ($70k), a coupon rate (the interest due at the end of the contracted period) and a maturity (when the money is due to be paid back with interest). Yes, there is some risk that the company will go under (hence ratings agencies such as Moody's and others), but with all the money being given to these companies that are "too big to fail," I agree that the people who hold the bonds are getting the very short end of the stick. If this administration (and it is not all the President when it comes to decisions like these...) uses the precedent it set by giving away far more money than we as a country had in an effort to save these companies – and their higher-ups – from their own actions/choices, why is it that the 'normal people' don't receive any of the benefits? Were they not the ones who pay the taxes in the first place?

    I recently heard political talking heads discuss the value of money. I am biased because I live in the midwest, but I truly wish that people who make these major decisions about how to spend all this money we don't have would take a lesson from the middle of the country. We don't have as many people (so the big-wigs tend not to care much about us) but we also have financially responsible families and communities. Absolute power in the hands of a select few will not lead to a successful republic in America because the power is not theirs to choose to expand. The power is from those 'normal people' who choose to give up certain rights/duties/freedoms/choices to those in power. Power for the government comes from people, not from the politicians.

    One last point... free market economics works well, but we in the USA have never had a true free market system. Unfortunately, the more government gets involved, the less opportunities are available for self-motivated, self-sufficient people to succeed because they are given more and more responsibility to pay for those who do not succeed,

    June 1, 2009 at 12:07 pm |
  54. Mike G. New York City

    Even six years ago the writting was on the wall, GM was only interested in making SUV's and to hell with small economical cars, or new hybrid units. Did GM directors think it would last forever, it happened in 73 and 78. No none wanted American cars due to the gas guzzling motors. This is the price you pay for following the idiots of GM management.

    You should have seen the fork in the road back then, I did. But I did see the fork we are presently on. I have lost, but as all tell you, its legal gambling when you play the stocks and bond game.

    Its gone, lost, get up and start walking again. Learn from your errors.

    June 1, 2009 at 12:07 pm |
  55. Bill Williams

    Do you people even read?
    Claude and other business people are saying the same thing.
    The bonds she and others bought are NOT COMMON STOCKS.
    They are suppose to be the first debtors paid in chapter 11.
    If the Gov. can change these rules when they choose we are all screwed!
    The debtors will no longer invest in any thing and credit will dry up worse than now. This will effect you unless you are going to be a cash user only.
    No new businesses will open and the mom and pop business that are the back bones of America will disappear and you will be buying everything from China via Walmart.

    But you all voted for Mr. OBAMA.

    June 1, 2009 at 12:07 pm |
  56. Eric Beck

    Wow. So now this is an anti-Obama – Barack and Michelle – thing. NOT ONE GM EXECUTIVE was invoked or castigated! Tells me she was just a typical bondholder: just give me a dividend, an ROI, and I'll bury my head in the sand, stay blind to the abuses, the greed, the tyranny. Now she got burned. Time we all said "Death to the Corporation". That paradigm is killing this country. And on a side note, let us all note that ONE MORE TIME, Michael Moore is vindicated. He skewered GM management, warned us about their practices and what they was doing to the American People in, what, 1989? (Whether it's about GM, 9/11, Iraq, healthcare, you name it, this guy has been trying to wake the masses, and he gets largely shot down as a fanatic, conspiracy theorist, etc., when in fact, he's been spot on).

    June 1, 2009 at 12:07 pm |
  57. Andrea

    She says that as a bond holder she had no say...what do you call the pressure the bond holders have been putting on companies to make more money, more money, more money?

    Bond holders like her have had all the's all about the dollar for them. This is what has driven jobs overseas, squeezing every little cent out of every part possible, all in the name of profit for bond holders.

    She didn't mind in the past when American jobs were lost to underbidders overseas. Now she's complaining that there is no one to defend the "common people". Ha! Maybe the bond holders need a "union"! I call that irony!

    June 1, 2009 at 12:07 pm |
  58. Dan

    As a bond holder, didn't she have the option to SELL them?

    News flash, the "safe" American icons are not exempt from going bankrupt. Resting on one's laurels and becoming fat & lazy does not ensure future sucess. Just look at GE...

    The only bonds that are still "safe" happen to be the ones issued by the US government. Even that guarantee may be in jeopardy. Investors be warned and informed. Snooze you lose.

    June 1, 2009 at 12:07 pm |
  59. Bill from Atlanta

    Regarding all the complaints about "rules" and about bond holders "rights," bond holders get wiped out all time, since they are guaranteed nothing more than "higher-priority" than some of the other creditors in the hierachy of creditors. Were these subordinated bonds? If so, she's even lower in the chain. This is not "theft" of corporate assets, this is called STUPID investment fallout. A bond is nothing more than a loan – and in this case, a loan to BAD company.

    June 1, 2009 at 12:06 pm |
  60. Andy Foreman

    If this woman could not see two decades ago that GM was a very bad investment with a myopic 'what me worry' attitude, then she is well, as blind as a bat, and being as blind as a bat she made and maintained a losing investment – thats what happens when you hold onto a clear loser.

    I havent got one millimeter of sympathy for her. She's an idiot, and like an idiot, she shot herself in the foot, and wallet.

    June 1, 2009 at 12:06 pm |
  61. chefdugan

    There are always two sides to every story. FIrst, one comment was right, bonds are supposed to be guaranteed by the assets of the company. What Obama has done is break that guarantee in favor of the Union. Is anyone suprised that a Democrat would do that?

    On the other hand, if I were living on a school teachers' salary and had invested more than a years wages in some bonds, I would watch that investment like a hawk. She had plenty of chances, 6 years worth, to get out, perhaps with a penalty but still get out. She didn't do it.

    You would think a school teacher would know a little bit about doing her homework.

    June 1, 2009 at 12:06 pm |
  62. Jim

    Numerous posts have already pointed out that any kind of investment involves an element of risk. I'm not sure how you could be so "shocked" at GM moving into bankruptcy when it's been in the news as a real possibility for weeks. And, as others have pointed out, GMs been losing BIG money for years and that was information available to the public and to which you as a bondholder should've been aware of. Were you this upset when this type of thing happened to the workers at United, or is it really just about you?

    June 1, 2009 at 12:06 pm |
  63. Todd

    I'm sorry, but its hard to have sympathy for a person that sunk so much of their nest egg into GM. GM has been struggling for quite a while so it would appear shes either been getting bad advice or simply mismanged the family money. Investments have their risks and you chose very poorly. To feel you now have the right to point fingers at anyone but yourself is typical of the new blameless society. Heck, you as a teacher are helping raise an entire generation of kids that have been taught that nothing is their fault. You can add this to your next lesson plan.

    June 1, 2009 at 12:05 pm |
  64. Jay Nice Guy

    I am empathetic as I am also a GM Bondholder. I have fllowed all the details, visited my congressmans office in Washington. You best hope of recovery is in bankruptcy court. Everything thus far has been done in secret with non-creditors best interest in mind. Now the laws governing bankruptcy take over. The oviginal offer of 225 shares with the 1:100 reverse split was withdrawn as only 15% of the bondholders approved. THe second offer only 54% approved. Under bankruptcy law for a plan to be approved its needs 2/3 of the creditor value and 50% of the individual creditors. THe GM bankruptcy will complex and long, but you don't lose out. THe market forces understand this. The value of your bonds increased nearly 20% in value today alone, and almost 100% in the last month. The taxpayers who voted for Obama will be paying billions to settle the mess. Remember 80% of those bonds are instituational owned and they NEVER lose out as with have seem with AIG, and the financial sector. You will get a free rid on their coat tails and get the same deal since you are the same credit class. IF you don't want to take the chance I think you can get $8,400 for the $70,000 at the market price at 11 AM today. When it comes out what was done by GM and the Task Force you may have had tickets to the lawsuit lotto and it will fund your entire retirement. Good luch, I'm in your corner.

    June 1, 2009 at 12:04 pm |
  65. Terri

    Ms. June I fell your pain and I'm sorry for everyone's loss, but I don't THINK a decision YOU (not President Obama) made six years ago is cause for the blame game. As a teacher, I hope this type of THINKING is not what you are teaching your students. We are accountable for our own actions, not others. I hope everything works out for you as well as others in this recession.

    June 1, 2009 at 12:04 pm |
  66. Craig

    Debra, investing in the stock market is a risk. If you can not afford to lose it don't invest in the stock market! No one forced you to put your money in GM. Obama and the government have nothing to do with your problem. GM screwed up! If you want to be angry at GM's former CEO and the corporation that anger is well placed, but the government/Obama had/has nothing to do with it. GM has been failing for years.

    Do you think other individual taxpayers, some who do not even have $70,000 in disposable income to invest ought to have to bail you out just because YOU made an investment in the stock market that didn't work out so well. Get real! If you can't take the heat don't play with fire.

    June 1, 2009 at 12:03 pm |
  67. Joe B

    More we can blame on Barney Frank and Chris Dodd... Every time Obama opens his mouth I feel like more $$$ is coming out of my wallet.... I am glad everyone is happy... I want a better change than this.

    June 1, 2009 at 12:03 pm |
  68. Brad W.

    Here's Michelle Obama's speech. Don't worry though, you can be assured that they aren't her words, just those of a liberal speechwriter. And she doesn't say "As" proud. She at least doesn't have to read of a teleprompter all the time.

    June 1, 2009 at 12:02 pm |
  69. William Douglas

    A lot of you don't know the difference between bonds and stocks.

    June 1, 2009 at 12:02 pm |
  70. ericcatec

    This is truly scary! I cannot believe the number of people posting here that don't understand what took place and, in turn, are blaming her for a "risky investments in the stock market". These are BONDS were talking about! The foundation that was eroded at her expense is unheard of. Why are so many of you quick to criticize on something you know nothing about and then dismiss her for a flippant remark about Michele at the end (which she most likely meant to for a connection, if given time)?

    June 1, 2009 at 12:02 pm |

    Most of you are missing the point. The Obama administration is stealing the business away from the rightful owners....the shareholders and bondholders.

    June 1, 2009 at 12:02 pm |
  72. Mark

    Six years ago? She invested 70K in GM after an almost 2 decade slide with no end in sight? No sympathy for you, honey.

    June 1, 2009 at 12:02 pm |
  73. Bill

    Reading these comments it's painfully obvious the majority of readers are uneducated. The woman did not "invest in the stock market". She purchased BONDS. There is a HUGE difference. Obama has come in and screwed the common person for the UAW. There is no other way to put it. Those are the FACTS.

    June 1, 2009 at 12:01 pm |
  74. Jo

    Stupid teacher if you ask me.
    First of all, who is going to put all his savings in one investment!
    Secondly, even 6 years ago it was already commonly known that GM was a conservative company that didn’t have any new development going on as an answer for their gas drinking cars.
    And lastly, she now expects that Obama is going to bail her out personally with my tax money? Come on teacher! I hope you do a better job at school!!!

    June 1, 2009 at 12:01 pm |
  75. john

    awwwwwwwwwwww....what a sad story...this woman has $70,000 to basically blow and people are losing their houses...don't feel sorry for her AT ALL

    June 1, 2009 at 12:01 pm |
  76. telly

    Why do people who invest money never treat as a gambling situation that can lose money just as easily as it can make money ? I never heard of the people leaving the casino (with less money than they brought in) complain this badly !!! Don't get me wrong, I feel badly about people losing their hard earned money ... but we can't let emotions cloud the facts ... Bonds/Stocks are some magical money tree .. it's full of RISK !!! Also, who advised this lady on making and keeping such a significant investment with an American Automaker ???

    June 1, 2009 at 12:01 pm |
  77. Kyle Michel Sullivan

    She's a teacher, but she never heard about not putting all your eggs into one basket? Anyone who's ever done well in the market knows you do not invest all your money into one stock or bond. You spread the risk. Even the Wall Street brown noses on MSNBC and CNN and the WSJ knew that, for all their idiotic suggestions and flagwaving. NOT sorry, lady. You'd have done better to take your cash, put it on black at the roulette table in Vegas and seen what happened to it, considering the times we're in; at least you'd have gotten some free drinks and maybe a night's stay in the Presidential Suite.

    June 1, 2009 at 12:01 pm |
  78. Paul

    Stop whining. I was slightly smarter than you—I had my 401K in diversified stock funds… and I’ve lost about $250,000. At one point it had lost half its value, but it is slowly creeping back up. And I’m really close to what I thought was retirement age. There are lots of us in the same boat. And it is not Michelle Obama’s fault that you chose a lousy investment.

    June 1, 2009 at 12:01 pm |
  79. Fred

    Obama just screwed Americians that held bonds and you Liberals don't feel sorry for her because she quota Michelle Obama. Michelle Obama did say she is finally proud to be an American when her husband became President. It always amazes me that liberals thing they can rewrite or tell a lie long enough and people will start to beleive them. Obama screwed this up big time. Now i'm proud to say that. Keep beleiving in Obama and we all will get screwed.

    June 1, 2009 at 12:00 pm |
  80. warren thompson

    I do have 100% empathy for the teacher and I also hold GM bonds but we all have to wake up and start taking responsibilty for our own actions. GMAC bonds were always rated "junk status". It's called "greed"–you bought them because the yield was higher which has always meant more risk.

    Blame yourself along with whomever you else you want to add. As a stockbroker for 30 years all people want the higher yield and then have someone "tell" them it is safe. They are called "yield" junkies. It is always about the money & trust no one.

    My wife is a school teacher and they are some hard working professional, and under appreciated profession. I am sorry about her lost.

    June 1, 2009 at 12:00 pm |
  81. Colin

    I love how people are so willing to ride the wave when it makes them money, but they cry foul when they are the victims of their own greed.

    You invested in the stock market and lost – grow up, and suck it up. It's like going to Vegas; only gamble what you can afford to lose. If $70k was more than you were willing to drop at the craps table, then you should have been investing in secure investments.

    June 1, 2009 at 12:00 pm |
  82. cpt

    Hmm 7 years ago when GM was at all time high? And didn't she know about all those legacy costs for retirees? Sounds like a whiny conservative who wants a bailout.

    June 1, 2009 at 12:00 pm |
  83. Johnny Z

    Wow! I wish I had $70K to invest in corporate bonds.

    If I did, corporate bonds is one of the last places it would go unless it were perhaps 10-20% of my cash and I could afford to lose it.

    June 1, 2009 at 12:00 pm |
  84. Derek

    Are all of these commenters really this clueless?

    She didn't buy *STOCKS.* She is a BONDHOLDER. In the event of bankruptcy, she has first claim on the company's assets.

    The government intervened and illegally overturned this very basic tenet! It is beyond belief that they could get away from this.

    I simply can not imagine a judge is going to let this stand.

    June 1, 2009 at 12:00 pm |
  85. Phillip

    They took money from her? That's like saying somebody took my vote from me. I have a feeling years ago when Bush/Cheney wanted to let Wall Street run Social Sec and Medicare she thought that was a good idea too.

    June 1, 2009 at 12:00 pm |
  86. george

    Enough with blaming Obama and the administration. I guess he is responsible in 5 months for what the criminal Bush did in 8 years. Perhaps you would rather throw billions more of our tax dollars away because you took a risky investment and lost. Stop your wining. I am not even in the financial sector, just a common person with some investments. Even I was smart enough to see the writing on the wall years ago and protect my money. You made a bad move lady, move on, get over it, and take responsibility.

    June 1, 2009 at 12:00 pm |
  87. Rock from SOCAL

    Come on LADY! You INVESTED money and took a RISK! Did you expect that some imaginary force would guarantee your 70K? If you wanted a risk free investment you could have put the money in an FDIC insured CD, but you were too GREEDY for that, weren't you!? You wanted higher return prospects, well fine, but you have to recognize the risk. Perhaps next time you will think twice before investing in an unsecured bond perhaps.

    As has been said just put another $200 and wait... perhaps your investment will double after all.

    June 1, 2009 at 11:59 am |
  88. josiah

    bankruptcy law states that bond holders have priority over common share holders and pretty much everyone else.

    people loan money to companies like gm by buying bonds. they accept lower returns and purchase bonds (as opposed to purchasing common stock) because they have have the "legal" priority in case there is ever a bankruptcy....this makes there investment far less risky (allegedly).

    our president in his wisdom about what is "fair" took (stole) the property of the bondholders and gave it to the union.....

    let's hope that no companies in the future need outside investors...they may be hard pressed to find any now that we all know that our government disregards bankruptcy law whenever it's convenient .

    June 1, 2009 at 11:59 am |
  89. Rashid

    I'm sorry Ms. June. You seem like a nice person but that is capitalism. If you did not want to assume the risk you could have invested this money in your bank for a savings account that would be covered by the FDIC (up $100,000) and not assumed the risk. Your money would also be completely secure.

    Instead you opted to purchase a corporate bond that carries higher risk and therefore offers a higher return. I don't mean this in a bad way but you were driven by "greed" and saw the dollar signs of a higher return on GM stock. Unfortunately the company failed (as sometimes happened) and you were wiped out.

    I will not call my Senator or any other elected official to "pay" the small bond holders for your losses so an already bloated deal with GM can become even larger. That money will not come from thin air. It will come from your millions of fellow citizens through further tax hikes. That makes a painfully bad situation even worse and punishes those who are even less at fault in this situation then you.

    You have my sympathy and my well wishes Ms. June. I truly hope you bounce back from this... good luck!

    June 1, 2009 at 11:59 am |
  90. Dan

    Rule 1) It doesn't matter how big a company is....there is a certain amount of risk in the market place, and all of the risks need to be understood by anyone who invests in the market.

    Rule 2) Don't invest more than you can afford to loose. Period.

    I have a hard time feeling sorry for this person. She obviously did not understand the risk she was taking and has now paid the price for that.

    Maybe part of the problem is her math. She said that her 140 shares wouldn't even be worth $200 if the stock came back a $10 a share. I'm not sure how she came to that figure, unless I'm misreading what she said...

    June 1, 2009 at 11:59 am |
  91. Jeff Robbins

    Why is it that when people get in the stock market and bet on a losing horse they think they were ripped off. Certainly the GM management was not paying attention like they should have but can she tell me how this is anyone else's fault other than the management at GM and quite frankly the investors themselves. The government cannot possibly negotiate with all the stockholders and must invest there time in the largest stakeholders which does not include the individual investors. The Obama's are not the reason for her problem and I am sure that Michelle is still proud of the way her husband is trying to reverse this perverse economy and war that our wonderful ex president has left him and us with. She is obviously a naive investor who thinks the government should take care of her and her problems, can you say socialism. Sorry June you bet on a loser and should have gotten out when the writing was on the wall not complain after the fact and expect someone else to pick up the pieces for you.

    June 1, 2009 at 11:59 am |
  92. Lucinda

    Stupid person puts a lot of money in high yield bonds instead of low yield government bonds. Now she wants a bailout.

    June 1, 2009 at 11:58 am |
  93. BOND_LameBond


    This is synonomous with a home owner going to the bank and saying, "Uh sorry, I spent too much money on my daughters wedding and I can pay anymore mortgage payments; but I can give you my 1960 Mickey Mantle card- it's almost in mint condition"! AND THE BANK HAS NO CHOICE TO TAKE THE DEAL!

    BONDHOLDERS IN GM WERE SCREWED! As most Americans dealing with the corrupt capital market of our country.

    June 1, 2009 at 11:58 am |
  94. william keegan

    I find it very disturbing that someone as simple minded as you is
    teaching the children of this nation. Have you ever heard of diversification? I feel this individual had no business putting this much money into a single fund such as GM. This is typical of
    people thinking they no how to invest and then crying when they get burned. She needs to take responsability for her own actions and
    quit playing the victim.

    June 1, 2009 at 11:58 am |
  95. BG

    While you were getting taken the president was flying to Manhattan for "date night" with his wife.

    June 1, 2009 at 11:58 am |
  96. whoisme

    What is most amazing in all the comments is that only two (2)
    of the writers seem to understand the difference between stocks and bonds and their claim on the assets of the corporation. The rest of you please study before you spout !!

    June 1, 2009 at 11:58 am |
  97. bjb

    what a lame interview, if you invest you can lose it, deal with it...I am so sick of the bailout culture with all these whining ninnies!!

    This woman obviously didn't pay attention when she was in school, maybe she should teach her students some finance skills.

    June 1, 2009 at 11:57 am |
  98. Joe B

    You see the government is just paying back all the people that supported Obama . UNIONS got the pay back when they have caused the company to go under anyway ... Bond holders get screwed UNIONS get passed the tax payor but.... I just wonder when I will get my car???? ALL tax payors should feel screwed again....

    June 1, 2009 at 11:57 am |
  99. Dave

    And its unbelievable how many people commenting on here don't understand the difference between investing in debt and investing in equity.

    As one commenter already said ... open up a finance book before you go bashing this lady's investment strategies.

    June 1, 2009 at 11:57 am |
  100. Bob Stern

    I think there's bigger issues out there than GM being bankrupt....two main ones.
    The first is that when a small stockholder follows a broker's recommendation that GM is a good buy and pays great dividends, everyone's happy. All you hear or know is that here's this great company that's been around for 100 years. The problem is that when things get sticky, you never hear from that stockbroker/bond dealer about that, and they never come back to you and recommend that you save some of that money and sell before it hits bottom......all they care about is their commission, not your future.
    The second thing is that if we, the American people are financing 70-80% of this deal, we shoud get 70-80% of the net result......not pennies on the dollar. If the government is "investing" our/my money, I expect them to fulfill their fiduciary duties too.....where is the accountability on that?
    Bob Stern

    June 1, 2009 at 11:57 am |
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