Lilguy

Ignore Detroit's Bondholders' Whines

I'm thinking this doesn't have anything to do with the bonds or unions or Chrysler's value (nada). It's all about CDSs. Now (or soon) the bondholders who have "protected" their holding with CDS insurance can tell the insurance company to pay up at full face value.

And I'm betting that insurance company will be AIG, which means you and me and the rest of the American taxpayers will be paying off the banks and hedge funds that hold these bonds.

Ain't that great!

'Surgical' Bankruptcy for Chrysler

I sure hope the President's right on this one, if only for the sake of the tens of thousands of workers whose jobs are on the line. That said, I would not be surprised by the process taking more than two months and maybe even changing a lot that has already been agreed upon.

This may be surgery, but it's likely to rip-your-chest-open exploratory heart surgery rather than three small holes gall blader arthroscopic surgery. (I've had the latter--and I don't want the former!)

GM's Bondholder Pillaging Plan

The bankruptcy of GM & Chrysler (this week!) will be two more stakes in the economy's heart and drive a huge hole in the now-stumbling bear market rally.

I think May is going to be an ugly month in the market and the economy, although USG stats won't pick up the latter until at least June. And I really don't think the market has fully priced in the now-likely bankruptcies, at least not as of today.

A Few Thoughts on the Upcoming Auto Sector Implosion

Chris B--I have been thinking for quite some time that we haven't yet hit the final market bottom in this bear market. Your thoughts on GM (& similarly on Chrysler) plus its impacts across dozens of other companies may be the straw that breaks this bear market camel's back (truly mixed metaphor!).

Unless more than one major bank (C, MS, BAC, WFC) goes belly up, I can't think of any other failure that might do more damage to the market than a GM bankruptcy.

Appreciate the thoughts.


On Apr 13 03:33 PM Chris B wrote:

> I'm holding a portion of cash aside waiting for the GM-inspired bottom. When the bankruptcy occurs, the conversation will shift to an expansion of implications and stocks will fall. This expansion of implications conversation occurred when Lehman went bankrupt too.
>
> This GM-inspired bottom will probably be the last one. It will occur in May - June.

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

I am as anxious as anyone to move away from our addiction to foreign oil, but when I read the following, I know I won't be buying an electric car (especially a Chevy) anytime soon:

"...a spotty safety record..." Oops!

"...the basic geometry has been designed to deflect the potentially explosive force of a battery failure down and away from the passenger compartment." That makes me feel so much better!

"...not renowned for the extreme cycle-life..." So can I pick up a new one at WalMart when the old battery dies?

"...suboptimal if one’s environmental sensitivities extend beyond landfills to include the environmental damage caused by mining and other resource extraction activities." Oh, good! So instead of polluting the atmosphere with CO2, we'll be planting our toxic waste for future generations to dig up.

....maybe I'll stick with the old gas-powered piston engine for a while longer.

Li-ion Batteries and How Cheap Beat Cool in the Chevy Volt

I am as anxious as anyone to move away from our addiction to foreign oil, but when I read the following, I know I won't be buying an electric car (especially a Chevy) anytime soon:

"...a spotty safety record..." Oops!

"...the basic geometry has been designed to deflect the potentially explosive force of a battery failure down and away from the passenger compartment." That makes me feel so much better!

"...not renowned for the extreme cycle-life..." So can I pick up a new one at WalMart when the old battery dies?

"...suboptimal if one’s environmental sensitivities extend beyond landfills to include the environmental damage caused by mining and other resource extraction activities." Oh, good! So instead of polluting the atmosphere with CO2, we'll be planting our toxic waste for future generations to dig up.

....maybe I'll stick with the old gas-powered piston engine for a while longer.

The Economy, And Why It's Taking So Long to Fix It

Couldn't agree with you more on the key issues in the economy and the time it will take to resolve them.

One nuance I would differ slightly with you on is consumer confidence. Yep, it's in the pits and it will stay there for quite some time. But I see that as an effect of the loss of wealth from the housing bust and family financial investment--especially 401Ks--evaporating as well as the reality or threat of layoffs. People now see that they will have to work longer (or elders having to come back to work) and be more thrifty.

And--on this latter point--I think we're going through a cultural shift from spendthrift to ol' fashion thrift. That is what I see as the key consumption driver that will have an adverse effect on economic growth well after the housing and financial system busts have been stabilized. So, even when confidence starts rising, I wouldn't look for much increase in personal consumption.