GM: The Bailout vs Bankruptcy Meme
There’s a bailout vs bankruptcy meme going around with regard to GM — a choice which makes me want to tick "none of the above". I’ve seen it in dozens of places of late, but since it comes with the...
View ArticleBailout vs Bankruptcy, Obama Edition
Barack Obama addressed the GM situation on 60 Minutes last night: Mr. Obama: My hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around...
View ArticleGM: An Alternative to Bankruptcy
Antony Currie says that it’s possible to structure a GM bailout so that it behaves like a bankruptcy without being called a bankruptcy: If an official bankruptcy label is really too scary, another...
View ArticleHow a Bankrupt GM Should Merge With Chrysler
Yesterday I sketched out a possible financial plan for how GM might be restructured within bankruptcy. Today, Andrew Ross Sorkin provides the other side of the coin — the operational side of things....
View ArticleHow Can GM Bondholders be Bailed In?
Is a bankruptcy for GM not only an option, now, but a necessity? At least one of Bloomberg’s interviewees thinks so: The Democrats’ goal of preserving a U.S. auto industry is not doable without a...
View ArticleThe GMAC Game of Chicken
The NYT does a good job today of explaining what’s going on at GMAC, although it doesn’t quantify the haircut that the company is asking bondholders to accept; my commenters put it in the 10% range,...
View ArticleThis is Not Good
The WSJ reports that talks to save the automakers have broken down in the Senate, and that there will be no bailout. Once again, Congressional Republicans have killed an intiative backed by both the...
View ArticleWhat Does GMAC’s Bond-Exchange Failure Mean for Detroit?
The GMAC bond-exchange results are out, and the screws that GMAC applied on December 10 — tender your bonds or we won’t become a bank or get TARP funds — seem to have had some effect, with the...
View ArticleBroken Glass
Is Waterford Wedgwood luxury, or "masstige"? Either way, it’s bust. Its $625 million in debt is essentially worthless, it’s been losing money before interest payments for a couple of years now, and its...
View ArticleEcuador Craziness Datapoint of the Day
Today is clearly "crazy things people try to do while in default on their debt" day. First Friendfinder Networks tries to IPO, and now Ecuador is trying to borrow more money: Ecuador is seeking $2.6...
View ArticleHow Holdbacks Brought Down Frontier Airlines
On Friday I got a bit confused about something called credit card holdbacks, and how they could be used to drive an airline into bankruptcy. It turns out that it all goes back to something known as the...
View ArticleCredit Derivatives Datapoint of the Day
Isda: The notional amount outstanding of credit default swaps (CDS) grew 37 percent to $62.2 trillion in the second half of 2007 from $45.5 trillion at mid-year. CDS notional growth for the whole of...
View ArticleWhy GM Should Embrace Bankruptcy
Tom Krisher has a good overview of the travails at General Motors, where the stock is trading at a 50-year low, battered by speculation that the company might end up declaring bankruptcy. Bankruptcy...
View ArticleCreditor Rights, Risk Aversion, and Justice
A paper from Viral Acharya, Yakov Amihud, and Lubomir Litov shows something which makes a lot of intuitive sense: if you beef up creditor rights, you beef up corporate risk-aversion — and that can be...
View ArticleLehman: Is Bankruptcy an Option?
Henry Blodget says that Lehman declaring bankruptcy would be a "sensible solution" to its current predicament: A bankruptcy filing would put the company in the hands of a court appointed liquidator,...
View ArticleLehman: No Chapter 7, Yet
As expected, Lehman Brothers has filed for bankruptcy. But in a twist, the brokerage subsidiaries haven’t: Late Sunday night, Lehman said it intends to file for protection under Chapter 11 of the U.S....
View ArticleA Lehman Story
It’s clear now that the European and Asian operations of Lehman Brothers will be liquidated and not sold as a going concern. Barclays clearly doesn’t want them, and at this point they’re like bread or...
View ArticleDid Lehman Brothers Steal $8 Billion?
My Lehman story from last week has finally been picked up by the WSJ: Lehman moved more than $8 billion between Lehman’s European headquarters in London and New York, where Lehman collects money from...
View ArticleDoes Bankruptcy Save Jobs?
Remember all those pictures of dejected Lehman bankers walking out of their offices with cardboard boxes full of personal possessions? Well, it seems they might have acted rather prematurely. In fact,...
View ArticleDriven to Bankruptcy
Do you know anybody who bought a new car in October? Most of the country was a little bit preoccupied, I think, for that kind of activity. But even so, the news that GM sold just 168,719 cars last...
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