How much would you pay for “New GM”? About a year ago, all of GM’s common stock put together was worth maybe $2 billion, give or take, depending on the day. Go back three years, when things were merely bad instead of catastrophic for them, and people laughed at me whenever I said that GM was going to die. Back then, the stock was worth | Read More »
This is a very quick initial response to the extraordinary announcement of the Chrysler LLC bankruptcy filing. We don’t have all the answers, but that’s partly because we don’t even have all the questions. Something very new and different is happening here. It’s very far from clear to me that this is a Chapter 11 bankruptcy in any normal sense. For one thing, why is | Read More »
The big headline yesterday was that GM CEO Rick Wagoner is being dismissed in favor of Fritz Henderson. This isn’t remarkable in itself, because no one expected him to last, despite having the oft-expressed (in public, anyway) full confidence of GM’s board . Today, the President of the United States is expected to make significant announcements about GM’s warranty policy. No, that’s not a typo, | Read More »
There’s no way to understate the enormity of what happened yesterday evening, ladies and gentlemen. Yesterday morning, I wrote in this space that it was the first day of the rest of Wall Street’s life. But then, the Federal Reserve rebooted the financial world. Today is the first day of a brand new life. The events of the past four days have been so momentous | Read More »
Yesterday was the first day of the rest of Wall Street’s life. At the beginning of this year, there were five major broker-dealers. In March, the Bear Stearns Companies were acquired by JP Morgan Chase with a large assist from the Federal Reserve. Yesterday, Lehman Brothers filed for Chapter 11 bankruptcy. On Sunday, Merrill Lynch agreed to be acquired by the Bank of America. As | Read More »
As I described here, this is the weekend that the Treasury and the Federal Reserve decided to stop bailing everyone out. Secretary Paulson has been hinting for weeks now that we have to let capitalism work the way God intended it to. Which means: if you screw up, you die. This is what we free-market conservatives have been saying we wanted all along, folks. We’ll | Read More »
Ladies and Gentlemen, I’ve been faithfully chronicling the global credit and financial crises for you since the first cracks started appearing in early summer of last year. Tonight, with the almost-certain collapse of the investment bank Lehman Brothers, the crisis moves into a new and possibly very dangerous phase. I’m going to keep you up-to-date on the key developments over the next few days, or | Read More »
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