Congressional overseers and many analysts are skeptical about the post-bailout prospects of success for General Motors Corp. and Chrysler Group LLC, and some say they will need to raise more cash as early as next year.
Observers see little chance of another taxpayer bailout given the opposition to providing the automakers with $75 billion this spring and the administration's statements that it does not intend to commit more money to the sector.
But that doesn't mean they won't need greater funding — and the capital markets may be no more receptive than the government, especially given the risk of "political interference," as a congressional oversight panel put it.
Indicating its own concern for GM and Chrysler's sales, the administration said last week it is in talks to provide a third bailout to GMAC Financial Services, GM's former finance unit now 35 percent owned by the government. The lender is a huge source of auto loans, and its failure could decimate sales at the two automakers.
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Scary article by Nouriel Roubini. Should be right up your alley.
ReplyDeletehttp://www.ft.com/cms/s/0/9a5b3216-c70b-11de-bb6f-00144feab49a.html