Not a huge surprise since they mostly make and sell counter tops for new houses. With 19 million empty houses, unless there is a huge influx of new immigrants, demand for new houses will be very slow for at least a decade.
Archive for the ‘Bankruptcy Watch’ Category
Bankruptcy Watch – Masonite
Wednesday, March 4th, 2009It’s official – CitiGroup caves
Friday, February 27th, 2009Citigroup Common stock immediately lost 41% of its value.
*** Update ***
Since the US Government is moving its claim of ownership to the end of the line, Citigroup Preferred stock is zooming up – up 70%….
Next bailout? Car Parts companies
Friday, February 27th, 2009According to an unnamed source[“Tim Geithner”], the US Treasury may set up an $18 billion fund to prop up unprofitable car parts manufacturers, so their failure doesn’t end up shutting down GM.
The final nail in the GM coffin
Wednesday, February 25th, 2009One of the reasons for GM’s prosperity in the “good old days” was GMAC. The amount of money that GM made selling a car was secondary to the money it could make from the financing of the car through GM’s car financing subsidiary.
President Obama’s idea to get the US government involved in car loans tries to replace the market forces that drove GM to seek profit from lending money for cars rather than building cars with a central government controlled agency which will be motivated by policy objectives and government control. Create a fund like this, you put everyone else in the financing business out of business. Car finance companies don’t have a printing press that lets them print money to lend.
If the US Government starts becoming an auto loan lender, how can it avoid repeating the mistakes of Freddie Mac and Fannie Mae? What if someone wants to borrow money to buy a car made by a non-UAW manufacturer?
The woman who was widely mocked for saying that now that Obama is President, she won’t have to make her house payment and will get a free car was telling you the truth – the problem is people didn’t believe her.
…rosebud…
Wednesday, February 25th, 2009Hearst newspapers says it will probably have to sell or close the San Francisco Chronicle.
Question to think about: once all the newspapers are dead, where will Matt Drudge get his news?
Ethanol from grain – bad idea getting worse
Tuesday, February 24th, 2009The nation is filling up with “ethanol from grain” refineries that are filing bankrupcty.
Renew Energy
Central Illinois Energy
Verasun
E3 Biofuels
Under the most optimistic assumptions, including using irrigation to grow grain, ethanonal returns only slightly more energy than the energy that was needed to make it (fertilizer, running tractors in the spring, harvesters in the fall, trucking the grain to the refinery. Conventional gasoline/oil pipelines cannot transport ethanol, so it must either be trucked half way across the country, or shipped via rail (and few of the specialized rail cars exist).
Intensive production of corn is itself releasing more CO2 as more land is cleared to grow crops, farm runoff is expanding the “dead zone” in the Gulf of Mexico, non-renewable topsoil is being consumed and washed away, and the country’s nonrenewable underground aquifers are being depleted for irrigation. Irrigating for 20-40 years always leads to salinity of the soil high enough that no crops will grow on the land. This was a really bad idea, funded by ADM and with no science behind it.
Ethanol from sugar cane or biomass may have some role in the future, as they offer substantially higher net returns on energy inputs .
If you’re still unconvinced with ethanol from grain is a bad idea, did you know that ethanol plants are large generators of Co2?
We have a Car Czar now (or do we?)
Monday, February 23rd, 2009Just when you think it can’t get stranger. After Tim Geithner and President Obama declare they really don’t need a Car Czar after all (just the money), Steven Rattner appears to be assuming that role.
Steven Rattner is the founder of Quadrangle – a private equity firm with a long history of deal making in the major leagues of finance. That’s not totally surprising – the talk is that for a GM/Chrysler bankruptcy deal to happen, the government needs private equity money driving the process. More importantly, they need a “kick ass and take names later” guy to make the painful decisions and tell people “the way it is going to be”. Think of Danny DiVito’s character in “Other People’s Money” and that pretty much sums it up. I’m actually having a twinge of optimism now.
The “kicker” about Mr Rattner is he is the man who manages the finances of New York City Mayor Michael Bloomberg.
Ritz Camera files for Chapter 11
Monday, February 23rd, 2009Probably the best known retailer of Cameras and related goods files Chapter 11. Part of the reason is digital photography has changed the market for high end cameras. They also decided to get into the retail Boating supplies business, which was outside their “core competence” and that decision has not worked out well.
Bankruptcy Watch – GM/Chrysler
Monday, February 23rd, 2009AFP (the French news service) is reporting that the US Treasury is talking to potential banks (CitiGroup?) that might provide what is called “Debtor in Posession” financing – it is the funds used to keep a company “alive” while it goes through the bankrupcty process. The DIP stands first in line to gets its money back when/if the company comes out of Chapter 11. Obama administration officials are quoted as saying “everything is on the table now”.
Bankruptcy Watch – Philadelphia Newspapers, LLC
Monday, February 23rd, 2009The publisher the The Philadelphia Inquirer and the Philadelphia Daily News has filed Chapter 11