I expect GM and AIG will file bankruptcy before the end of May. Or, the federal government will dig themselves -- dig the American taxpayer -- even deeper into the morass.
Bankruptcy is the only & best solution for GM and Chrysler. There's no other way they can restructure their labor & pension problems. To think they can repay the taxpayers by the end of March is ludicrous. Bankruptcy was the 2nd best solution for AIG. The best solution was for the Fed to intercede as CSA provider (putting its name but not its assets behind AIG's CDS) -- i.e., my 'collateral is the contagion' approach. The solution they adopted, the bailout, was the worst solution. We are now seeing how AIG's 535 new irresponsible & unaccountable directors (Congress) are micro-managing them into bankruptcy, having wasted time & assets to the point a Chapter 7 becomes as likely as Chapter 11. Federal bankruptcy judges, on the other hand, are (typically) responsible, accountable, and rational, unlike Congress.
Anyway, why is the American taxpayer bailing-out Cerberus? They own both Chrysler and GMAC, whose long-term viability is very dependent on GM -- and Res' Cap's junk mortgages.
JRB
12/26/08
No comments:
Post a Comment