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re: GM down over 20% today, is it official done?
Posted on 3/6/09 at 12:28 pm to Cold Cous Cous
Posted on 3/6/09 at 12:28 pm to Cold Cous Cous
If GM files bankruptcy, and is able to rework union and supplier contracts, I still don't see it helping. Consumers will simply not have the confidence to purchase a $20,000 to $30,000 vehicle from a company that might not even be able to survive through the warranty period. JMHO.
1
Posted on 3/6/09 at 4:23 pm to TigerintheNO
I guess I am in the minority here, but I think that GM may receive a second bailout. I have been trying to rationalize some of the more recent decisions, and here is the theory that makes the most sense.
If GM declares bankruptcy, the market will panic. We may lose another 1000 points in the market before it is all done. However, if GM can stay afloat for a while longer, the market will recover to a certain extent, and when GM goes bankrupt, it will not be as catastrophic on the rest of the stock market. The extremely optimistic viewpoint is that a recovering economy could keep GM afloat in the long-term, but that seems like wishful thinking.
Thoughts?
If GM declares bankruptcy, the market will panic. We may lose another 1000 points in the market before it is all done. However, if GM can stay afloat for a while longer, the market will recover to a certain extent, and when GM goes bankrupt, it will not be as catastrophic on the rest of the stock market. The extremely optimistic viewpoint is that a recovering economy could keep GM afloat in the long-term, but that seems like wishful thinking.
Thoughts?
Posted on 3/6/09 at 4:30 pm to Keys Open Doors
quote:
that seems like wishful thinking.
Posted on 3/6/09 at 4:31 pm to kfizzle85
Yeah, but how about this part?
quote:
If GM declares bankruptcy, the market will panic. We may lose another 1000 points in the market before it is all done. However, if GM can stay afloat for a while longer, the market will recover to a certain extent, and when GM goes bankrupt, it will not be as catastrophic on the rest of the stock market.
Posted on 3/6/09 at 4:38 pm to coloradoBengal
quote:
If GM files bankruptcy, and is able to rework union and supplier contracts, I still don't see it helping. Consumers will simply not have the confidence to purchase a $20,000 to $30,000 vehicle from a company that might not even be able to survive through the warranty period. JMHO.
One gov't backstop that seems reasonable is that the warranty period is honored. Let's be realistic, GM is not going to disappear next month, next year or even in 10 years. They ahve too much to offer. Limited risk by the gov't, and will overcome hurdles.
The US gov't needs to start doing stuff that is right for america, not right for those entrenched in power.
Posted on 3/6/09 at 4:42 pm to Keys Open Doors
quote:How much has GM's dire situation already been factored into the market?
If GM declares bankruptcy, the market will panic.
Posted on 3/6/09 at 4:47 pm to Keys Open Doors
This part:
There would certainly be a reaction, no question about it. How much I have no idea, it would depend on ch7 v ch11, recovery rates, etc etc.
So if they stay afloat till say...September, and the market has held to around 7500. The loss to bondholders/usgov is now substantially larger, but because the market is ~<10% higher than it is now, that makes it more palatable? I highly disagree, even in the event that we are in a comparably better economic situation/outlook at that time. That is debatable, to say the least.
quote:
If GM declares bankruptcy, the market will panic. We may lose another 1000 points in the market before it is all done.
There would certainly be a reaction, no question about it. How much I have no idea, it would depend on ch7 v ch11, recovery rates, etc etc.
quote:
However, if GM can stay afloat for a while longer, the market will recover to a certain extent, and when GM goes bankrupt, it will not be as catastrophic on the rest of the stock market.
So if they stay afloat till say...September, and the market has held to around 7500. The loss to bondholders/usgov is now substantially larger, but because the market is ~<10% higher than it is now, that makes it more palatable? I highly disagree, even in the event that we are in a comparably better economic situation/outlook at that time. That is debatable, to say the least.
Posted on 3/6/09 at 4:48 pm to Chicken
Probably quite a bit. The potential collapse of both GE and GM have been looming over the market for quite some time, but there are also investors who think that those two corporations are too big to fail.
Posted on 3/6/09 at 4:49 pm to Keys Open Doors
quote:
The potential collapse of both GE and GM have been looming over the market for quite some time, but there are also investors who think that those two corporations are too big to fail.
The difference in appearance and health between these two companies is night and day. They are not comparable.
Posted on 3/6/09 at 4:50 pm to kfizzle85
quote:
So if they stay afloat till say...September, and the market has held to around 7500. The loss to bondholders/usgov is now substantially larger, but because the market is ~<10% higher than it is now, that makes it more palatable? I highly disagree, even in the event that we are in a comparably better economic situation/outlook at that time. That is debatable, to say the least
I don't necessarily think it is a good idea. I am just trying to understand the rationale for continuing to give money to GM, and that's the most reasonable thing that I can think of.
Posted on 3/6/09 at 4:53 pm to Keys Open Doors
quote:
potential collapse of both GE and GM
I don't think you can compare those 2 to each other
Posted on 3/6/09 at 4:54 pm to Keys Open Doors
Well I don't disagree with you on that point then, but I don't think that is what is likely to happen. Considering the ad-hoc form of bailout that we employ though, your guess is as good as mine.
Posted on 3/6/09 at 6:47 pm to Keys Open Doors
Why throw good money meaning our money after bad management. The unions are responsible for this mess.Why doesnt the auto makers have the balls to stand up to the unions and operate like toyota and mercedes in this country?
Posted on 3/6/09 at 8:09 pm to TigerintheNO
I don't in no way support this so called stimulus package of Obama's. But the money would have been better spent just giving everyone a check rather than bailing out GM. Atleast this way it would have gotten out and promoted spending.
Posted on 3/6/09 at 8:50 pm to Golfer
quote:
That explains why my Tundra was made in Princeton, IN (body) and Huntsville, AL (engine).
And assembled in San Antonio? I think they make the or some Tundras there.
BTW, teh top selling vehicles in the US are F-150's and Silverados.
Posted on 3/6/09 at 8:57 pm to Ponchy Tiger
quote:
But the money would have been better spent just giving everyone a check rather than bailing out GM. Atleast this way it would have gotten out and promoted spending.
For $30 billion, the price of the first bailout $13.4 and $16.6 for the 2nd just for GM, the government could have just bought one and a half million cars at $20,000. Could have given one to every solider that fought in the wars.
BTW- GM stock is at a 75 year low (adjusted for splits and other changes)
Posted on 3/6/09 at 10:44 pm to TigerintheNO
quote:
BTW- GM stock is at a 75 year low
that is truly staggering.
and it takes a lot to stagger these days.
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