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And so the Senate has rejected the bridging loan to the US motor companies. I'm suffering a bit of an internal conflict on this. A couple of my stocks are (unfairly, I feel), perceived to be dependent on the Big Three struggling on as independent companies. And stocks in general are going to get slaughtered today. I can see the FTSE opening more than three figures down (minus 150 would be my guess), because Wall Street is certainly going to open something like 200 to 250 down.
I mean, in the greand scheme of things, it's hard to give a fuck. The bailout failed for the same reason that the companies are doomed -- a failure on the part of nearly all participants to face up to reality. The United Auto Workers may get the main share of the media blame, but there are no innocent parties here.
So, what will happen now? Well, I guess the rosy scenario is a shotgun marriage between GM and Chrysler, which staves off armageddon for a year or so. The non-rosy scenario is that one of these two simply runs out of cash.
The motor companies (annd their workers, and their pensioners) just don't seem to have worked out that creative accounting can only take you so far when it is fighting negative cashflow. GM is just going to run out of money. I think I've written about the credit default rates for the motor insurers many times in the past three or so years. These would then be triggered. Who are the counterparties? Will they be able to pay?
An unhappy Christmas beckons for some people, I fear...
++++++++++++++
It's my last day for the newsletter until the New Year. Hooray!!!!!!
I can now compile lists of all the home things that need doing.
________
I mean, in the greand scheme of things, it's hard to give a fuck. The bailout failed for the same reason that the companies are doomed -- a failure on the part of nearly all participants to face up to reality. The United Auto Workers may get the main share of the media blame, but there are no innocent parties here.
So, what will happen now? Well, I guess the rosy scenario is a shotgun marriage between GM and Chrysler, which staves off armageddon for a year or so. The non-rosy scenario is that one of these two simply runs out of cash.
The motor companies (annd their workers, and their pensioners) just don't seem to have worked out that creative accounting can only take you so far when it is fighting negative cashflow. GM is just going to run out of money. I think I've written about the credit default rates for the motor insurers many times in the past three or so years. These would then be triggered. Who are the counterparties? Will they be able to pay?
An unhappy Christmas beckons for some people, I fear...
++++++++++++++
It's my last day for the newsletter until the New Year. Hooray!!!!!!
I can now compile lists of all the home things that need doing.
________
