Full Metal Coffin

[GliderGuider]

A hard-line attitude from a blogger who called this shitstorm a year and a half ago:

Debt Rattle, November 19 2008: Full Metal Coffin

Hmmmm. It’s starting to look like we're about to see a harbinger moment of sorts, isn't it? I see no indication that the Motown Big Three will get what they want. Flying in on private jets may well be the last nail in the full metal coffin.

A free hand-out now seems to be entirely off the table, and that would leave only the option of a loan. But what could the Three put up as collateral for that loan? For every million dollars a factory might be worth, and that is a big if once the stones start a-falling and a-rolling, there are many millions more in obligations.

The main argument pro a bail-out is the prevention of job losses, both inside and outside the companies. Still, with that 17 million car manufacturing capacity, and a market for less than 10 million, and with all the foreign competitors eyeing those same sales, it's obvious that at least half the production will be gone no matter what. Which, as we've seen, will cost 2.5 million jobs whatever else is done.

That kind of automatically leads to the Chapter 11 option. Which will shave a haircut, the down to the bare bone type, off of all pension plans and other benefits, both for present employees and retirees. So what will be the difference? The US government is in no position, certainly no after 'securing' Wall Street banks and bonuses, to guarantee more than a few pennies a head in Flint, Michigan. It's over.

...

The New York Stock Exchange threatens to de-list Fannie Mae because its stock trades below $1 ($0.410 right now). Well, there's plenty other candidates for that honor. Ambac today trades at $0.850, after losing 25%. Freddie Mac trades at $0.560. Then we have the challenged firms, the ones sinking so fat they'll get there soon. There's Ford, at $1.25, down 26%, GM, still at 2.61, but losing another 15%. National City at $1.91, down 10%. Wamu doesn't even get to a dime anymore, but is still listed.

A Detroit rally is in the works from those covering shorts, and then it’ll be a Dickens Christmas in much of America.

[DemReadingDU]

1. Ilargi and Stoneleigh are my favorites

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