BeachRider

The Troubled Role of Government in the Economy

The evolution of the late 1800s USA-government has put us where we are. During that 1800s (and the first-quarter of the 1900s) the USA economy kept growing rapidly in one area, then crashing. The great financial minds of that time came up with our current model. It has avoided the bruising crashes, since that time. If someone has a clear notion of evolving this mechanism further, cool. The problem has been that the arguments (such as the ones in this chain), have not been picked up by the USA. Perhaps they can be tried in a state or other country to justify their pervasive use in a broad way for the USA.

'Too Big to Fail' Should Not Exist

A lot of people are surprised by American Bankruptcy law.
Many are comfortable with 'Chapter 7' style bankruptcy where a company is liquidated and the assets are distributed according to a hierarchy. Bankruptcy courts can elect for 'Chapter 11' style instead (more below). Individual bankruptcy has 'Chapter 7' and 'Chapter 13' (comparable, but not the same as 7 & 11 for corporations).
Writers often cite company documents that show a proposal for a specific bankruptcy, but a court/judge inspects the entire proposal before either accepting, rejecting or modifying the proposal. During the court's arbitration of the bankruptcy, the state takes possession of all the assets to redistribute them. Bush & Obama took special steps with banks and auto-manufacturers. They made special investments, using special classifications that matter when bankruptcy is before the court. They make those investments for political reasons (usually jobs), but hopefully set the terms of the investments so that the investment is not lost.
Because both Bush & Obama made these investments, it is not possible to ascribe them to solely-Republican or solely-Democratic interests. It is certainly expected that Obama will get back the people's money, within a reasonable period of time.
It looks like Chrysler will get out of court soon, BAC never went into bankruptcy and GM is also headed out of court. Once these resume their status as non-bankruptcy companies, the investment will be sold. I don't know where the story got started the the USA never intends to see its share of a new-GM or of a revitalized BAC. Obama will never be re-elected if this has been badly botched and a substantial part of the investment is lost.

Wall Street Breakfast: Must-Know News

GM reorganizing Delphi. Not much of a surprise, they depend on Delphi. It is very important that the engagement rigidly follows the plan for rapid re-privatization of both companies, though.

Wall Street Breakfast: Must-Know News

Oracle is buying Sun...
This is an amazing turn of events. It is a substantial change in the orientation of Oracle. They need to show the market that they know how to plan for such a change. That is why ORCL is down 5% right now.
I am surprised, so is Microsoft's CEO. This is an amazing turn of events.
Onward and upward!

Wall Street Breakfast: Must-Know News

The market believes that Sun and IBM are not going to merge. The good news is that Sun lives to battle another day. The bad news is that they will give up most of the up-tick that they got from this discussion. Sun was at 4.97 on 3/17 before they went to 8.89 on 3/18.