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"So in this case the winning play, if you're a big bondholder, is to tell GM to suck eggs; you'll get paid 100 cents on your CDS even though AIG has no money, because the taxpayer will make you whole on those CDS, even if the bonds have a recovery in bankruptcy."
Part of the automobile industry’s problem is the Federal government’s insistence that it build cars that please the government. Under Obama, this is going to get much worse. My guess is that General Motors, formerly an automotive giant and the first modern American corporation, will go the way of British Leyland.
Obama has no constitutional or regulatory authority to warranty cars.
Why spend $30 billion on an enterprise presently worth only $3 billion??
It doesn’t take being an economist to figure that one out.
If you would like to be added or dropped from the Michigan ping list, please freepmail me.
If you had bought $1000 worth of GM just 4 days ago, it would be worth $500 at the close yesterday.
I think my next car is going to be Japanese.
I understand Madoff investors may eventually get 5% on the dollar. that is BETTER than GM stock....
On Monday, President Obama gave GM 60 days to come up with a better plan before deciding whether to sink more cash into it. But he placed a large bet on its survival by promising to guarantee all GM and Chrysler vehicle warranties. He also held out a shimmering vision of the Big Rock Candy Mountain, expressing faith that his policies can lead to "a 21st-century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future."..."but just in case"...
52 week high $29.28, low $1.70 (which it hit late last month).
