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Giving up the Ghost ?

"A GM default would be absolutely huge," said Jonathan Loredo, of credit manager Cairn Capital. "It would be the biggest thing to hit the market in terms of losses and operational stress." That was in March 2006. "Overall, General Motors sold 168,719 vehicles in October, down from 307,408 in the same month last year, while Ford, including its Volvo brand, sold 132,278 light vehicles last month down from 189,515 in the corresponding month last year.Mike DiGiovanni, GM's executive director of global market and industry analysis, called the situation "frightening" and "dire"." That was yesterday from Forbes. Has the Treasury just decided to defer a politically unpalatable decision until after the election or are they throwing in the towel ? If GM is allowed to go bankrupt the derivative nightmare will unravel in full daylight and bring down any institution that is not anchored with solid gold. It has been obvious from the start that the bailouts and financial "Stimulus" packages have been delivered for one purpose and one purpose only: Helping the Banking community to triage the self inflicted wound of overleveraged speculation. Theoretically the amount that GM are looking for to retool their plants, moribund as they are, is small change to what has been doled out so far. But, as discussed in This Article , even if they were to retool and start producing more fuel efficient vehicles, who is going to buy them ? Instead of putting the cash in to GM, the Treasury would prefer to invest it in Fuel Efficient Vehicle research, the fruits of which would be available to all US Auto companies, if any are still standing. But it still comes down to the simple arithmetic that is consistently ignored in mainstream discourse; If the population is broke, jobless and Homeless there is no point in wasting money putting products behind showroom glass while the intended consumers can only press their noses against it and dream. Even if they are leaving the crying baby for Obama to deal with in January, (and he has said that he is in favour of helping GM financially), the situation will be gravely worse by then anyway and GM will probably be way down the list as he finds himself with a situation that even FDR could not begin to comprehend.


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