This was only a matter of time. Everyone from inside and outside GM assumed that the company would default on its debt and likely go bankrupt barring some miracle.
But now it's official. The company's CFO says the firm will not make its June 1, $1 billion debt payment reports WSJ. (Link)
The announcement comes as smaller rival Chrysler appears headed for liquidiation.
GM shutting plant for the summer:
Plant Closures
Dealer Jobs Vanish as GM, Chrysler Bankruptcies Loom
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Tipping point for US TREASURIES:
Link
Federal Borrowing Quadruples
The collapse in tax revenues is far surpassing anyone's worst expectations.
Between the shrinking economy, the widespread asset deflation and the elimination of so many of the highest-paying jobs, there just isn't much of a tax base to support all the government spending that's planned.
Link
This is the Beginning of END GAME
Soaring U.S. Budget Deficit Will Mean Billions in Bond Sales
Millions of lost jobs mean billions in lost tax revenue for the U.S. government, and billions in additional Treasury debt to fund a federal budget deficit that may soar to more than four times last year’s record $454.7 billion.
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I wonder how worried the plant employees are. I would venture to say - not too much! I'm sure they will still get paid 25 bucks an hour to NOT make cars that nobody except people in the midwest want to buy (not a slam at them, I live in the MW).
ReplyDeleteGM is a drain on society, and the sooner it goes bankrupt and is broken up and sold off the better. Instead we may all be forced to support this albatross around our necks until the "skinny necked one", the radical socialist Obama leaves office.
Let them die. That is called a real free market. Others will replace them and build better cars for less money. That is how it works.
ReplyDeleteOf course that is a fantasy. We are being run under government-controlled capitalism, better known as Fascism. Lucky us. That way the corporations and their lobbyists can control greedy politicians and decide who succeeds and who fails.
If corrupt government would get out of the way at least corporations would have to really compete for once not scramble for support from corrupt politicians and their bailouts and other rip offs.
I believe both of the previous posts make valid points.
ReplyDeleteLarge corprations which are insolvent will have to face bankruptcy. Though there certainly is fascism in our current economic model of business.
However, there will be a breaking point where even government can no longer print sufficient currency to save endangered institutions.
The world financial markets will finally decide the dollar has become devalued by excessive money supply. When this point is reached the foreign markets will no longer purchase our debt without huge interest rate markups to cover their risk.
When that debt goes unpurchased because of implied risk, it is truly finished. Collapse will be imminent regardless of the governments actions.
Goodbye GM:)
ReplyDeleteU.S. Treasury/Fed will NEVER allow an auction to fail. They will resort to the same shananagans and manipulation they are doing in the financial sector. It's all smoke and mirrors folks. To be honest, the minute they went into the market place and started buying bonds that was the admission of failure.
ReplyDeleteGM = Governmant Motors
ReplyDelete