Why GM May Go Bankrupt

RIpoff country.. let them go under, let Citi and B of A go under... theis Beananke "bank check" scheme was yet another benanke Wall street puppet scheme. The bastard. tell the truth will ya?.. OBAMA wants you to even buy stocks.. and he SAID it... yeah , to protect HIS PERSONAL INVESTMENTS in the market... Screw the freaking stock market and take care of the american people.They are NOT one in the same.

The US economy, based on unsustainable debt to drive unnecessary consumerism, is dead. All that is happening now is the banksters, the hyper wealthy crooks who created this system, are in a frenzy to steal every last cent they can from honest working Americans. Why do Americans continue to sit back and take this?

"Why GM May Go Banrupt": Because the U.S. Government doesn't know one thing about how to design or engineer or build cars. Before the government is through with car design, the "car" will look like one of Henry Ford's initial prototypes -one he rejected.

An honest question: Who issued the CDS insurance? What happens if the CDS's don't pay their obligation to the bondholder in the event of a GM bankruptcy? If the bondholders are betting on a better payoff from their CDS insurance... What if the insurer declares bankruptcy, too? From what I've read, a LOT of CDS's were written without any funds set aside to pay them off, as if nobody would ever actually claim against it.

These so-called smartest guys in the room obviously had to realize what they were doing -- or, were they really that financially unsophisticated that they accepted the concept that "insurance" eliminated all risk?

I don't know who the bondholders at GM are, but other reports about Chrysler indicated their holdout bondholders were hedge funds. Really... they didn't know the risks they were taking?

Finally: I can't understand the callous, "it's the union's fault..." mindset I see in these comments all the time. If Ford could avoid bankruptcy, what was so different with Chrysler and GM? Was it...Debt? Was it... lousy product? Did the union take on all that debt, create poorly designed cars with huge product overlap and cannibalization? Did the union focus almost entirely on SUV and big truck products as if gas would NEVER go up in price?

C'mon: Management's job is to anticipate and predict future markets, to develop product strategies to align to evolving market needs. GM's management failed miserably. The union may have contributed to financial problems, absolutely: But MANAGEMENT problems were huge, too. Please don't ignore that.

Thank you newera22 for the intelligent comment. The mainstream media really doesn't seem to grasp the concept of reorganization all too well, do they? Legally, GM's unsecured creditors & their UAW liabilties (the VEBA) are pari passu; that is to say they are legally entitled to equal treatment under the bankruptcy code. A quick correction to your math: the VEBA claim is actually $20 billion, and they're receiving half of that in a cash IOU from Uncle Sam, and 39% of post-reorganization equity for the balance. The bondholders get 10% of equity for their $27 billion claim.

Essentially, the administration is using taxpayer money to usurp creditors legal rights and push their own social agenda. After all, it's the egregious benefits & wages that union members extorted from GM that placed them in this debacle to begin with. And all along, this was funded by bond holders... who are not "evil money people" (20% of GM bonds are held by retail investors), but instead have a fiduciary duty to their investors, who are pension funds, endowments etc etc.

Simply ridiculous...