Jump to content
CaddyInfo Cadillac Forum

The NEXT GM Bankruptcy


Recommended Posts

GM will not survive the next bankruptcy (stock up on parts).

Next up to the plate: GE and Continental Airlines. Neither can mathematically hope to pay off their debt. It's simply impossible. Yet the market values GE at $171B or $16/share. Continental is valued at $1.85B or $13.35/share. Maybe the U.S. Government will save them. At some point the government "savior" programs must end. They are unsustainable.

Place your bets ladies and gentlemen.

Regards,

Warren

P.S. If you own GE or CAL, get out NOW! Or short them. They are both in the same shape as Fannie, Freddie, GM and Lehrman Brothers were a year before they tanked.They are going to ZERO!

Posted Image

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises

Link to comment
Share on other sites


If memory serves me correctly, Continental has filed CH. 11 no less than 3 times in the past.

Three strikes and you're out. It is currently mathematically impossible for Continental to pay off their debts. Under ANY circumstances. Absent a bailout, they are toast.

Ditto for GE. http://www.thedailycrux.com/content/3149/Porter_Stansberry

Regards,

Warren

Posted Image

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises

Link to comment
Share on other sites

Add Goodyear Tire and Rubber Company to that list. The news has reported they are teetering on bankruptcy. They are very top heavy in management and very short on staff in their retail stores = a prescription for disaster. Personally, I think they are one of the most corrupt companies around.

Link to comment
Share on other sites

Once a Goodyear hardhead, I've gone back to Michelins and Bridgestones myself. And, Government oversight has rescinded some of GM's cost-cutting measures, and that piper must be paid. But, if GM can get into the black in 2010 and stay there, don't assume that their debt is too big. Remember that GM is a $100B++ GOR company and they can accumulate $100B in cash over a decade or so. They had more than that on hand when Roger Smith took the helm or GM never would have survived into the 1990s.

As far as GE and Continental, I haven't studied them at all. I will say that Chapter 11 "restructuring" of debt really means renegotiation of debt, and the judge can throw out debts to creditors that are not amenable to negotiation and which are not supported by the business model. It happens all the time. I think we may need to go from "I owe those guys" to true business people and hard business decisions before these things are managed properly, though.

I will say that GE has had a good ride for a long time. They got a big updraft in the electric appliance boom of the 1950s that never really let them down. Like GM, though, they have been taking success for granted and probably are not capable themselves of coming up with a hard-nosed comprehensive business picture in a short time, nor of providing observables to an outside accounting firm.

The same float-above-the-clouds thinking was exposed in GM when Government auditors examined GM's request for bailout funds and couldn't find enough information to justify the requests, and found that GM couldn't supply it. I think that's being fixed now and it won't happen again. GM may need another Chapter 11 under an Administration that is capable of ruling against the UAW to survive. Their only other really attractive option is to move the bulk of the manufacturing offshore and morph into a domestic manufacturing operation that implodes and a surviving portion.

CTS-V_LateralGs_6-2018_tiny.jpg
-- Click Here for CaddyInfo page on "How To" Read Your OBD Codes
-- Click Here for my personal page to download my OBD code list as an Excel file, plus other Cadillac data
-- See my CaddyInfo car blogs: 2011 CTS-V, 1997 ETC
Yes, I was Jims_97_ETC before I changed cars.

Link to comment
Share on other sites

GM has been bailed out once; will it be bailed out again?

GE has been bailed out once; will it be bailed out again? Maybe for defense purposes.

Continental Airlines? Puleeze!

Regards,

Warren

Posted Image

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises

Link to comment
Share on other sites

GM has been bailed out once; will it be bailed out again?

Regards,

Warren

Sadly both American parties have made it very clear that GM had better make a go of it this time or GM is done.

IMO there will be no "do over" there will be no second try.

Don't forget that W bailed out GM against the wishes of his party and the Republicans in both houses. They told him no and he gave the loans anyway. The way that they declared GMAC a bank basically required that you just outright ignore all of the rules. Which they did.

Obama on the other hand seems to have support of his party to continue with the "Bush plan" and "save" GM/GMAC/Delphi... But like the Bush bailouts cost him politically, the Obama bailout "continuation" is costing him too.

Unless some third party comes along, GM will not be getting another "loan" for at least 25 years.

If GM fails before that you will have both parties busy saying "See, I told you so" with everyone blaming everyone else.

I guess it comes down to do I think that GM will need another bailout?

That will come down to how well the Volt, the XTS, the Cruze, and the new Camaro continue to sell. If all four sell and continue to sell well GM has a strong chance... if any one of them fails, Then you are right, GM is probably done.

caddy.jpg

Easin' down the highway in a new Cadillac,

I had a fine fox in front, I had three more in the back

ZZTOP, I'm Bad I'm Nationwide

Greg

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...