Archive for February 20th, 2009

Bankruptcy watch – John Laing Homes

Friday, February 20th, 2009

Story here

Last I heard, there are currently 19,000,000 empty homes in the United States.  I think we can stop building new homes for a while, unless we expect 100 million Mexicans to flood over the border some time soon.

Two curious things about this story – the AP “slugged” the story as Bangalore, so apparently the AP has “outsourced” editing stories about the United States to cheap labor in India.  Perhaps the more interesting thing is that this company making homes in the United States is owned by Dubai.

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Posted in Bankruptcy Watch | No Comments »

Dodd says “Short Term” nationalization is necessary

Friday, February 20th, 2009

Senator Chris Dodd, head of the US Senate Banking Committee (who has not yet produced copies of his sweetheart mortgage deal with Countrywide Mortgage) says that “Short Term” Nationalization of Bank of America and CitiGroup may be necessary.  Bloomberg Story

Remember that once the government gives itself “temporary” powers, it never gives it back voluntarily.  US Treasury dictator Timothy Geithner will release details of this plan “next week”, unless of course he’s too busy saving the automobile industry.

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Posted in Bankruptcy Watch, Financial Collapse, Politics | 1 Comment »

Madoff faked trades for 13 years?

Friday, February 20th, 2009

Bloomberg reports that Bernie Madoff made no trades at all to buy the securities that people believed they had in their “accounts” – for the past 13 years.  (which goes back to before George Bush took office….)

This makes almost no sense.  Every trade at Nasdaq has a buying firm and a selling firm, and each trade is reported to the Clearing Corporation (not part of Nasdaq) in close to real time – so that the back office of the firms can reconcile any differences and arrange for transfer of the stocks if they are in certificate firm. 

I believe that Madoff had no certificates for 13 years, and it may be possible his investment firm held no stocks – but it is impossible that there weren’t trades reported to the Clearing Corp from the Madoff broker/dealer firm unless the Clearing Corp itself was in on the ponzi scheme.  I don’t think the SEC still has a handle on what was going on.

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Posted in Bernie Madoff Watch | 1 Comment »

So why not Chapter 11 for GM?

Friday, February 20th, 2009

The Wall Street Journal lays out the case for GM to let the bankruptcy process resolve their issues here

This is exactly why the bankruptcy law was created in the first place.  It allows a company with an unviable business model to either do the things it needs to do to fix itself, or be sold off or dismantled in way that protects the interests of the people who are owed money or who have purchased the company’s products in the past.

Having worked inside GM (not as an employee), the thing that I think the Harvard Law Professor is missing is the “cost” of cutting loose those “legacy” costs of the promises to the UAW workers.  Many of the people in the UAW are third generation auto workers.  Reducing the pensions and retiree benefits to a current worker’s father and grandfather will lead to sabotage, aggression, violence and deliberately defective products.  I can’t see a GM filled with angry UAW workers surviving, and I doubt Toyota wants to buy additional assembly plant capacity and the “legacy” that GM leaves behind.

TheStreet.com seems to be thinking the same thing.

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Zimbabwe Stock Exchange reopens

Friday, February 20th, 2009

Things are looking up in Zimbabwe.  The Zimbabwe Stock Exchange has reopened, and $30 in stocks was traded the first day.  Inflation has been running at 79,600,000,000%, so this is a major step forward.

The story has no update in it about how the cholera epidemic is going, other than a lot of people are getting drunk.

Good luck Zimbabwe!

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Posted in Financial Collapse | No Comments »

Bankruptcy Watch – Saab

Friday, February 20th, 2009

Svedish car maker Saab (owned by GM) has sought protection from creditors.   GM had previously intended to sell Saab, but apparently has decided to jettison it.

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Feb 20th 2009 – the bloodbath continues

Friday, February 20th, 2009

Each day, expect some comment here about the state of the world markets.  In a prior life, I did computer work for several of the venues where stocks and futures are traded.  I’m not a trader.  Think of me as the guy at the casino quietly walking around emptying the trash cans, but marveling at the power of the human emotion of greed.

Asia is finishing up down around 2.5%   Europe’s futures indicate they will open down about 3% (London is 5 hours ahead of New York).  US futures are also into -2 to -3% range.   It’s not going to be a pleasant day.

The FDIC normally seizes and shuts down banks on Fridays in order to switch ownership of the accounts over the weekend.  Bank stocks were hammered very hard yesterday.  Might another of the “Too big to fail” banks fall over today?

*** Noon Update ***

Here is who is facing the fire hose of selling today:

Wells Fargo, GE, Goldman Sachs, JP Morgan/Chase, Bank of America, Citigroup

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Posted in Daily Market Watch | No Comments »