Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

If this guy is right, we're in big trouble!

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (Through 2005) Donate to DU
 
Up2Late Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:22 PM
Original message
If this guy is right, we're in big trouble!
Edited on Sat Mar-26-05 04:24 PM by Up2Late
"...Maybe this is why Bush is in such a hurry to set up "private accounts" for Social Security, to draw more money into Wall Street to prop up struggling megacorps like GM, and perhaps the entire US financial system as well..."

This is from: Online Journal Editors' Blog - Tuesday, March 22, 2005

Here are a few clips from it, but it has several embedded links, that are worth following. The fill article is at:

If this guy is right, we're in big trouble!

Jason Hommel of the Silver Stock Report says General Motors is nearly insolvent. He predicts the automotive giant will go bankrupt in three months to a year.

In an article he published online at Kitco on March 18, Hommel suggested that if GM goes down, it might pull the whole U.S. financial system down with it; hence the name of the article, "The Death of the Dollar."

Hommel looked up GM's vital financial statistics in Yahoo Finance and found that the company's market capitalization, i.e. the total value of its stock, added up to about $16 billion after the stock fell from $34/share to $28.35/share, and that the carmaker was in debt to the tune of $300 billion. Hommel thinks that GM will default on its bonds because it won't be able to cope with higher interest rates. Losses on debts this large will cause bond investors to lose faith in even larger debtors, such as the US government...

(clip)

...GM is the world's No. 1 automaker. Isn't this the kind of blue chipper Bush and the rest of the neocon privatizer want you to gamb . . . I mean, invest your retirement in? Maybe this is why Bush is in such a hurry to set up "private accounts" for Social Security, to draw more money into Wall Street to prop up struggling megacorps like GM, and perhaps the entire US financial system as well.

(this is one of two bad links in this blog article)
GM hits the skids
www.fortune.com/fortune/investing/articles/0,15114,1039... >
Printer Friendly | Permalink |  | Top
 
radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:26 PM
Response to Original message
1. just look at the gas prices
they are high NOT because there is a "supply" problem -- but rather because "investors" have figured out a way to make a few bucks by driving the prices up

On Wednesday, in my area, gas was around 1.97/gallon -- by Friday morning it was 2.13 to 2.15/gallon
Printer Friendly | Permalink |  | Top
 
mattclearing Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:27 PM
Response to Original message
2. I've been saying that for some time.
That's the only logical reason to push it. They want to lure the middle class back into the market like they did with the tech boom.

The house always wins.
Printer Friendly | Permalink |  | Top
 
graywarrior Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:30 PM
Response to Original message
3. Didn't GM just cancel a line production?
Something about changing plans and buidling bigger and better trucks over the next two years. I was more concerned about the cancellation of production in that report.
Printer Friendly | Permalink |  | Top
 
Up2Late Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:37 PM
Response to Reply #3
4. Yup. here's a clip on that
This is one of the paragraphs I couldn't include, due to the "Copyright Rules" here. I hope this doesn't break that rule, if it does, I'm sure they'll just deleted this reply.

"...On March 21, a day that saw the Dow lose 64 points, GM stock rose $1.07 to $29.69. But GM is in major trouble. Last evening's Nightly Business Report on PBS announced that the company is going to cut 28 percent of its nonunion white collar jobs, and that it expects a negative cash flow this year. Reuters is reporting that GM has cancelled plans to build some new rear-wheel cars in North America. And the lead sentence on Alex Taylor III's Fortune Magazine article, "GM hits the skids," is "GMs first quarter was a slow-motion car wreck..."
Printer Friendly | Permalink |  | Top
 
graywarrior Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:56 PM
Response to Reply #4
12. Yep, that's the one.
Funny how little blurbs like that set off firecrackers in yer brain.
Printer Friendly | Permalink |  | Top
 
Spazito Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:42 PM
Response to Original message
5. I certainly would give it some credence
it makes a certain amount of sense. The Plunge Protection Team, aka The Working Group on Financial Markets -- the secretary of the treasury and the chairmen of the Federal Reserve Board, the Securities and Exchange Commission and the Commodity Futures Trading Commission, can only continue to artificially prop up the market for so long and I suspect they won't be able to continue much longer as the debt and deficit grows ergo the NEED to privatize SS.


Info on the PPT or WGFM:

http://www.washingtonpost.com/wp-srv/business/longterm/...
Printer Friendly | Permalink |  | Top
 
earth mom Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:43 PM
Response to Original message
6. This is something we should all pay attention to....
Wow! There have been several threads in the last week here on DU about GM. Here's the ones that stood out to me:

Financial analysts say the layoffs could be as steep as 28% --that's more than 90,000 of GM's 323,000 employees.

http://www.democraticunderground.com/discuss/duboard.ph...

General Motors plans to offer buyout packages to as many as 12,000 white-collar employees, cutting some departments by 10 percent, the Detroit News said.

http://www.democraticunderground.com/discuss/duboard.ph...

General Motors Corp., which issued a shock profit warning last week and has been losing market share, may phase out one of its weaker car brands if sales fail to meet projections, company Vice Chairman Bob Lutz said on Wednesday.
GM's Buick and Pontiac are both "damaged brands"...


http://www.democraticunderground.com/discuss/duboard.ph...
Printer Friendly | Permalink |  | Top
 
Alpharetta Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:46 PM
Response to Original message
7. gas prices might save GM
a US buying spree might do GM pretty well where more fuel efficient autos become the new fashion.
Printer Friendly | Permalink |  | Top
 
charlie Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:47 PM
Response to Original message
8. The opinion from all quarters seems to be
that GM is in dire straits. And if the situation is bad enough and it implodes, the fallout could be like an anvil dropped on the economy. Okay.

But there's no way I'm going to regard an "analysis" from a silver/gold bugger as anything other than overheated sky-is-falling crap. They only have one tune for every occasion -- the world is headed over a cliff NOW and precious metal is your only safeguard (and conveeeeniently, we offer one-stop services for all your gold buying needs).
Printer Friendly | Permalink |  | Top
 
Up2Late Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:55 PM
Response to Reply #8
11. I would have to agree with you, but I think this is something ...
...that we should all watch carefully.

Personally, I've been predicting for months (or even years) that a total economic melt down was coming, and this looks like another one of the "house of cards" that could help that happen.
Printer Friendly | Permalink |  | Top
 
mmonk Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:52 PM
Response to Original message
9. It's part of the republican
base. I don't know if they will bail them out or not. They see social security as something purely ideological (they see social security as socialism which must be dealt with). The neocons are not quite as libertarian or ideological. They are opportunists that use the system for power.
Printer Friendly | Permalink |  | Top
 
KharmaTrain Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 04:55 PM
Response to Original message
10. Corporate And Private Debt Bombs...
Little is said to the large amount of outstanding corporate and personal debt. Many corporations used loose banking laws and, in partnership with those same bankers, have been playing a shell game to maintain their "cash value" through continued borrowing and rescheduling of debts. While I know there's gonna be a time this game has to end, I'm not certain this is the time.

We've seen how this regime will rush in to prop up an industry (airlines) when it feels it's financial buddies are being hurt and we get to bail them out by expanding the federal defecit. Also, the real mother's milk in this for the banks and money players, is the interest these companies and the government pay...and the bigger the debt, the more the interest and this fuels its own synergy.

I'm more concerned about personal debt as this is what will hurt this country bad, if it hasn't already, and this regime will sit by as millions lose their homes, cars and dignity to make sure their corporate creditors get that last ounce of flesh. The new bankruptcy laws are very germaine to this whole fiasco.

I know there are many out there that have debts and took them because they had no alternative...but with interest rates about to rise, the big banks raising rates and charges with little impunity and a government that couldn't give a shit if you don't the money to write a check to the RNC...try to whittle it down and definitely avoid taking on more. We're about to enter a replay of the inflation and high interest rates of the 70's...all the ingredients are there.
Printer Friendly | Permalink |  | Top
 
enid602 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 05:13 PM
Response to Reply #10
13. GM
SS privatization won't help GM, but merely add to the mushrooming private and public debt problem. It will merely throw more money toward stock brokers and financial corporations. The GM issue is huge for the Republicans, however as Bush tax-cuts and spending frenzy were (according to supply-siders) supposed to create more wealth and ultimately, a greater tax base. If the result is a GM bankruptcy, then Bushco will have egg on its face. George W. Bush and General Motors . . . like a rock!!!!!!!!!!
Printer Friendly | Permalink |  | Top
 
KharmaTrain Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 05:34 PM
Response to Reply #13
14. I've Waited For This For Decades
In the late 70's, I thought Chrysler was gonna go down, but Jimmy Carter stepped in and bailed the corporation out, and I he his motivation was to prevent the economy from collapsing. It would prove to be a good move as Iacocca turned the company around, and a major reason were the fuel-efficient K Cars. Chrysler paid their loan back, too...and in retrospect, it was a good move on Carter's part.

Yes, GM are big GOOP contributors and more the reason I would see a bailout coming for them and with little opposition. With control of the House and Senate, this regime can and will raise the debt ceiling again and again...piling on the deficit to bail out their corporate buddies with our tax money.

If GM does go into bankruptcy, expect it to be similar to the re-organization games we have seen go on in the auto industry where workers will be laid off or forced to give back pensions and other benefits to "save the company"...meanwhile the board of directors will draw full checks and investors will continue to get dividends.

Right now the foxes control the henhouse and it's on our dime. Sadly few people realize this and when they get the bill, they'll get the corporate media lies that will absolve this regime and their corporate masters of any responsibility.
Printer Friendly | Permalink |  | Top
 
Up2Late Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 06:59 PM
Response to Reply #14
15. You think they could bail out GM AND destroy SS?
Are their that many investors out there, willing to invest in this sinking ship? :shrug:

Plus, I think ALL the U.S. Airlines are in serious trouble (if oil prices don't start falling soon, which they won't) which, I think, could also cause a major meltdown.
Printer Friendly | Permalink |  | Top
 
enid602 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 07:15 PM
Response to Reply #15
16. GM
Makes you wonder how much it would cost the US taxpayer to bail out GM, a company that is said to owe $300 billion, and has few assets that other companies would be willing to buy, save at a huge discount. Interesting. GM's been a major defense contractor since its inception; maybe we'll have to do more outsourcing in George's next war.
When Eisenhower warned that the military-industrial complex might take over if given the chance, I don't think even he could have envisioned this scenario. Even worse, there might even be Enron-like potential for discovering more graft and book-cooking, not to mention waste.
Printer Friendly | Permalink |  | Top
 
KlatooBNikto Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Mar-27-05 04:47 AM
Response to Reply #16
24. One of GM's own devil spawns, the Delphi Corporation, located
here in Indiana, has been cooking the books and its entire top management has left Enron style. We should see similar tales unfolding all across the automotive industry supplier base.
Printer Friendly | Permalink |  | Top
 
KharmaTrain Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 08:15 PM
Response to Reply #15
17. Yes They'd Easily Destroy Social Security
Most wealth don't need it. They have the money to take care of them and all they care about is making more and passing along as much to their heirs.

Social Security is for the losers...the ones who couldn't "make it" like they did (even if they inherited it...they were "born right") and since they don't need this entitlement, they view those who do as freeloaders.

There are plenty of people willing to buy up debt...look at how the Chinese have picked up a lot...as they know this regime WILL sell out their own people for their own personal greed and they're lining up to cash in.
Printer Friendly | Permalink |  | Top
 
Up2Late Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 09:53 PM
Response to Reply #17
23. China buying up U.S. Debt is another BIG problem that's not being...
...talked about.

I recently heard (I think on PRI's radio show "Marketplace") that folks are starting to worry that if China amasses too much U.S. debt, they could gain too much financial clout, and be able to influence U.S. foreign policy by being able to threaten the dumping of the Dollars it holds, like we did to the British over the Suez Canal conflict.

That could cause the Dollar to collapse, which would ruin our economy.

See, the problem is, they don't really SEE the big picture. I really don't think their is one among them, that can think of more that one or two problems at a time, and then see how they all fit together.
Printer Friendly | Permalink |  | Top
 
seabeyond Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 08:24 PM
Response to Original message
18. i already thought of that, get all that money to show god numbers
but then what happens, three four five years down the road when all that money is sucked up and out of country
Printer Friendly | Permalink |  | Top
 
bush_is_wacko Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 08:29 PM
Response to Original message
19. Not to mention the cooked books regarding every program ever instated
in the history of our country! MHO is that bushitler and maybe even Clinton have already dipped so far into the SS reserve fund that he HAS to find a way to cover his tracks and "privatization" is the ONLY choice he has!

I have a funny feeling about this one. I think this is going to be pushed through in some form or other to hide his dirty deeds! There is way too much money being misappropriated in our government agencies for me not suspect this is the case with SS as well!
Printer Friendly | Permalink |  | Top
 
doc03 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 08:40 PM
Response to Original message
20. That's the game plan. Chapter 11, have courts
Edited on Sat Mar-26-05 08:44 PM by doc03
through out your Union contract then dump the legacy costs (pensions and health care). This has been going on for years. I work in the steel industry in 1985 the company went Chapter 11 and our pensions were dumped on the PBGC. Our new contract had a defined contribution pension and in 2000 they went Chapter 11 again and we lost that pension completely and our retires lost their health insurance. A local aluminum company (Ormet) has gone Chapter 11 and tried the same thing with them, as of now they have been on strike for over 120 days. The scary thing is the PBGC is now insulvent, but Bush is worried about SS going broke in 2042.
Printer Friendly | Permalink |  | Top
 
jsquared Donating Member (63 posts) Send PM | Profile | Ignore Sat Mar-26-05 09:38 PM
Response to Original message
21. GM's the Tip of the Iceberg.
The problems that are affecting it are endemic to the US economy. It is a fact that 40% of all US corporate profits come from financing versus manufacturing activities. In fact, I've heard GM referred to as a bank whose profits go to support the healthcare and pension costs of a million Americans (active and pensioners). They make almost no profit on their manufacturing operations so they are in big trouble in a rising interest rate environment, and rising gas price environment (as are housing, banking, construction, airlines, etc.) I'd say the Perfect Storm the gold/silver bugs have been worrying about for years is finally really here.
Printer Friendly | Permalink |  | Top
 
enid602 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Mar-26-05 09:49 PM
Response to Reply #21
22. GM
GM's finance operations really will hurt in a rising interest environment, especially if they are forced to offer below-market financing on a huge fleet of gas-guzzling, unsold trucks and SUV's. Could be a conundrum for them.
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Mon Dec 18th 2017, 11:32 AM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (Through 2005) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC