- As GM goes, so goes the nation. If this is true, it looks like summer of hell. GM is defaulting on its debts! Wall Street Journal reports :
…. Also Wednesday, GM’s No. 2 executive toughened the company’s message to bondholders, saying it doesn’t plan to pay off $1 billion in debt due June 1 and instead will rely on an exchange for shares or bankruptcy-court protection to clear its balance sheet.
Chief Financial Officer Ray Young, speaking to reporters on the sideline of a conference near Detroit, said the move comes even as the auto maker is finalizing details with the Treasury Department to receive an additional $5 billion in loans.
By taking a tougher public stance on bondholders, GM executives are laying the groundwork for what promises to be a messy debt-for-equity offer that they expect to launch by next week. The car maker will offer to exchange $28 billion in unsecured debt for company stock that could be rendered worthless without a significant turnaround.
GM faces a June 1 deadline from the Treasury to slash its debt and gain concessions from the UAW or face possible bankruptcy. Large GM bondholders were aware that the company was planning on missing a big payment, according to a person familiar with the thinking of a committee that holds just under half of the company’s bonds.
“People should be getting the sleep out of their eyes and seeing it’s over,” said Marilyn Cohen, president of retail bond investment manager Envision Capital. “I would imagine they’re going to file [for bankruptcy] any minute… Not making a payment — it’s going to show them that this time, they mean it.”
Mr. Young said GM is determined to get back on its feet soon, and it will right the ship “in court or out of court.” He said a trip to bankruptcy court is “probable” but indicated GM has the full backing of the government. “They want us to be a viable entity when we emerge,” he said.
- AFP reports on plant closures:
Troubled US auto giant General Motors plans to close some of its US plants for up to nine weeks this summer in a cost cutting measure to counter slumping sales, the Detroit News reported Wednesday.
The embattled auto firm, which has been given 13.4 billion dollars by the US government, is set to shutter the plants as part of a bid to reduce production by around 170,000 vehicles this year. An announcement is expected Friday the paper said.
GM spokesman Chris Lee told AFP the company would first announce any closures to staff, but refused to say whether it had plans to do so, describing the reports as “speculative.” “We have made not made any down-working announcements,” he said. Auto workers union representatives were not immediately available for comment.
- Wall Street Journal adds:
General Motors Corp. plans to idle most its plants for about two months this summer as the company races to cut costs and production to keep pace with sinking demand, said a person familiar with the plan. The car maker typically closes its plants for a two-week summer vacation. A GM spokeswoman declined to confirm or deny the planned closure.
Such a production hiatus — one of GM’s longest in recent decades — promises to drain the company’s revenue stream, dealing another blow to its attempt to restructure operations. GM’s sales have tumbled in recent months, with declines topping 50%. United Auto Workers union members still receive most of their pay during such shutdowns.
GM is saddled with a 113-day supply of cars and a 123-day supply of trucks sitting unsold on dealer lots as of March 31, according to Ward’s Automotive Reports.
- I could not agree more with what Mike Stathis says :
When Does It All End? The Abuse Continues. – Trillions of dollars for the bailouts haven’t satisfied the banks and automakers. They want more, and they’re spending your dollars to make sure they get it. According to the Associated Press, the top 10 recipients of the TARP spent about $9.5 million on lobbying during the first quarter of 2009.
Take a guess who the biggest spender was. GM of course; the company in the worst financial trouble. In just the first three months of 2009, GM handed over $2.8 million to lobbyists so they could bribe Washington officials for more taxpayer dollars. With already over $13 billion in bailout funds and much more on the way, spending $3 million is a very cheap price to pay to ensure billions in handouts, especially when these bribes have essentially come from taxpayer funds. The list goes on. See here !
I don’t care if these companies raised lobbying funds from employees selling their blood. The fact is that all lobbyist activities must be completely banned if America ever expects to recover from this depression.
This type of corruption is the exact reason why the banks and real estate industry were able to carry out their Ponzi scheme. This is a complete slap in the face of every single American. These shameless, disgraceful companies continue to lobby because they know corruption is the rule in America. Americans should be stampeding Capitol Hill in protest. I continue to be disgusted with this nation each and every day.
- I am still a bear, stock market is setting up for a big resumption of the downtrend all the way to new lows by summer. People always comfort themselves with: Don’t worry in the long run it will make money. Really? What economic law is that? Is there a law of God or nature that say this is so? I don’t think so! In the long run we are all dead. This is a certainty.
- When faced with losses, the majority will tend to believe in their own propaganda and are not smart enough not to believe in their own lies. This is why it is always difficult to cut losses and keep your losses small. But it is easier to believe in propaganda: Things will be ok. Long run we will not lose. The majority have difficulty distinguishing what they hope/wish for and what is reality.
- In the 1st Great Depression, it wasn’t until 1954 that the market recovered to its high of 1929. It took 25 years. If you adjust it for inflation, all the money you put in the stock market will not be anywhere close to their original value in 1929!
- The bear market rally is coming to an end. Nick Clark writes :
Nouriel Roubini, the so-called “arch bear” economist who predicted the current financial crisis in 2006, added further gloom yesterday after he wrote off recent rises in global stock markets as no more than a dead cat bounce.
While an increasing number of analysts have in recent weeks urged investors to go back into equities, Mr Roubini, a professor at New York University’s Stern School of Business who has emerged as one of the most respected economic voices in the wake of the credit crunch, warned yesterday that he didn’t yet see a buying opportunity.
He holds little faith in the recent market rallies, which prompted some to suggest a recovery was underway. “I’m still cautious and bearish,” he said. “I believe we are closer to a bottom in the stock market than a year ago, but this is a bear market rally.”
Anthony Bolton, fund manager at Fidelity International, said last month that a bull phase had started, while analysts at Goldman Sachs have argued in recent weeks that “we are past the low point in the economic cycle”.
However, Mr Roubini, dubbed “Dr Doom” for his warnings about financial meltdown, said there would be more bad news in the next few quarters. In particular, the economist warned of further dangers ahead for the financial services industry in the US. “I see financial shocks in the months ahead. Some financial institutions are in so much trouble we may have to take them over,” he said, before adding that losses in the industry could rise from $1 trillion to as high as $3.6 trillion.
Firms from across financial services will go out of business or be taken over, he said, particularly focusing on the bleak future for hedge funds. Mr Roubini also disagrees with more optimistic forecasts for the US economy. In an interview published on Forbes.com yesterday, he said that the prediction of a 2 per cent growth rate next year was far too bullish. He called it at somewhere around 1 per cent. “So while we are going to be technically out of a recession, it is going to feel like a recession,” he added.
He blamed weak recovery, deflation which would dog the US for the next two years, and financial shocks for the lower-than-expected growth.
Investors should stay on the sidelines, he cautioned, but added that there was light at the end of the tunnel. “I’m not a permabear. I believe that actually, if we do the right things, the US, Europe, Japan, but especially emerging markets can have a bright future of high economic growth.”
Mr Roubini criticised market regulators, saying that while deregulation was positive “we took it to an extreme”. He added: “Even financial markets need laws, institutions, rules; otherwise it is the law of the jungle.”
- Many still doubt that this economic collapse is engineered by the Illuminati banksters. Richard Cook comments :
THE LEVEL OF PUBLIC IGNORANCE on the topic of the U.S. and world monetary system is astonishing. This is part of the plan, of course, because the monetary elite control not only the financial system but also the news media, the publishing industry, and the educational system. The blueprint for control was put together over a century ago by Cecil Rhodes and his friends, including British financier Nathan Rothschild, as documented by Professor Carroll Quigley.
During the 20th Century the power shifted to the U.S., with the Rockefellers playing the dominant role as they continue to do today. It is no accident that J.P. Morgan Chase—the Rockefeller family bank—dominates the U.S. derivatives market; nor that Exxon-Mobil, the Rockefellers’ oil company, is the most profitable corporation in history.
The basic plan was to place all of mankind in a state of permanent mental and emotional siege so that in the end we would trade all our liberties to the controllers in return for protection; even freedom of thought would be traded for physical safety. That plan is well advanced. The sheeple have been prepared for the final shearing.
Meanwhile, every attempt at real reform has been strangled in the cradle. Past voices for monetary sanity like those of Congressmen Louis McFadden and Jerry Voorhis were silenced. Starting in the 1970s, functionaries like Kissinger, Brzezinski, and Volcker carried out David Rockefeller’s plan to outsource manufacturing to China and eliminate the U.S. as the world’s greatest industrial democracy, replacing it with a financier oligarchy.
Barack Obama obviously works mainly for the financiers, as did Bill Clinton before him. The job of the Democrats is to keep the sheeple quiet by now and then implementing some “reforms”; the Republicans were a more blatant gang of looters.
During the 2008 election campaign, Ron Paul called for the end of the Federal Reserve, the bastion of financier control, but no one effectively organized the millions of people who responded to his call or had a viable plan to put in place.
With the financial crash of 2008-2009, the noose is tightening everywhere in the world. The International Monetary Fund is announcing, “The current global recession is likely to be ‘unusually long and severe, and the recovery sluggish.’” (BBC News, “IMF Sees Long and Severe Slowdown,” April 16, 2009.) In reality, as the IMF knows, it would be possible to put every nation in the world on the road to recovery by allowing them to prime the economic pump through sovereign control of their own monetary systems, with freedom to utilize their own natural resources.
The IMF announcement is in fact the start of a worldwide program of genocide similar to what was done to Russia in the 1990s, with crushing poverty, slashing of incomes, reduction of benefits for the poor and elderly, rising levels of disease and malnutrition, and reduction of life expectancy. We in the West will view the carnage with alarm from our own stripped-down economies but remain docile out of fear the same will be done to us. Awareness of the hideous evil of the financiers’ plans to destroy the soul of humanity is growing. This is being accomplished through the internet and the work of a number of writers who understand what is at stake. I doubt this channel of expression will be available indefinitely. Already alternative websites are being isolated and marginalized. But the fight must be waged.
Destruction of human consciousness is the real goal of the financiers and their minions. It is lies above all that do this. The financiers’ power is the biggest lie of all.