Day: April 13, 2009

More Trouble Brewing For GM

General Motors Corp’s bondholders are preparing legal arguments against the automaker’s bankruptcy plan, the Wall Street Journal reported on Sunday, citing people familiar with the matter.

A plan to split the corporation into a “new” company made up of the most successful units, and an “old” one of its less-profitable units, is seen as the most sensible configuration, a source familiar with GM’s plans told Reuters last week.

The Journal said bondholders are worried that the process will push them to accept hefty losses on their investments. It said members of an ad hoc committee representing GM bondholders have made their concerns known to the Obama administration’s task force.

In a separate action, GM faces a lawsuit in Canada from unsecured bondholders over dividends GM paid from a Nova Scotia unit last May to its U.S. operations.

The bondholders claim the company wrongfully pulled around $600 million from the Canadian subsidiary because company officials should have known the U.S. business was near insolvency, according to the Journal.

GM has said in court filings that the allegations are false and that it was acting within its rights, the report said.

The U.S. Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by June 1, even though the automaker has publicly stated it could reorganize outside of court, The New York Times reported on Sunday.

Looks like GM will be the poster child of the week in the news, huh?

Where Will It All End?

Americans have grown more optimistic about the economy and the direction of the country since President Obama took office in January, according to the latest New York Times/CBS News poll on Monday.

Two-thirds of respondents said they approved of Obama’s overall job performance.

That is the people on the street, but the CEOs are not showing the same confidence.

The survey, conducted quarterly since the fourth quarter of 2002, reveals economic assumptions and outlooks of Business Roundtable member CEOs for the next six months.

When asked how they expect their company’s sales to fluctuate, 24 percent predicted an increase, 9 percent said no change and 67 percent said sales will decrease.

In terms of how they expect their company’s U.S. capital spending to change, 9 percent said it will go up; 25 percent reported no change; and 66 percent said it will drop.

In terms of changes to U.S. staffing levels at the company, 7 percent predicted a boost in hiring; 21 percent said levels will stay the same; and 71 said their workforce would decrease.

The CEO confidence index fell to minus-5 in the first quarter from 16.8 in the fourth quarter, the business trade group said. The index, which ranges from minus-50 to 150, was at 79.5 a year ago.
The chief executives expect the economy to contract 1.9% in 2009; three months ago, they thought the economy would be flat.
You see there is always a disconnect between Main Street and Wall Street.  The people, according to a recent poll are optimistic and Wall Street is pessimistic.
The disconnect is this….the people are not that knowledgeable on economic issues and they voted for change and like the new president and are willing to give him some time to see if his policies and programs will bring them any relief before they issue their final judgment.  Then there is Wall Street and the economists that are the cheerleaders of the system as it is….they look at the numbers, trends and cycles…they are armed with the facts and the facts are pessimistic.
Who will win the battle of the “istics” in the end?  Only the fortune telling 8 ball has the “real” answers.

Random Thoughts

Earthquakes to the right……Volcanoes to the left…….colo-rectal cancer…….whackos with guns……pretty much a typical week in the media…….

1–Casey Anthony has already been convicted in the court of public opinion…please just fry the bitch and shut the f*ck up!

2–Blago has been indicted of 16 different felonies……..and he was a talk show……Disney World is aghast.

3–Palin’s sister in law is arrested for house invasion…twice….and the same house……

4–The Congress is on Easter break so cooler weather has returned to Washington…all the hot air has gone the way of the do-do, at least for awhile.

5–OK dipsticks…there is now a dog in the White House can we please move on to something more important….like…oh I do not know…..saving the middle class?

If there were more but it was lost in the dark recesses of my mind.