OT: Buying GM Stock, a steal at $2?

Originally Posted by Brucelee

I think we should bomb Detroit. Alert the folks first so that they can jet down to NO for Mardi Gras.D

Ha! Detroit, Flint...maybe we could re-build it as a giant amusement park....

[urban_legend]

Common stock will be zeroed out soon - burn rate is just to high for GM. they cannot gear down fast enough. Ford is a better choice - and take the bonds over the common stock. You get paid while you wait for the turnaround.

[Perfectlap]

I woldn't touch Ford either (except to short it). Doesn't matter if Ford is running a brilliant company while Chrysler and GM are cratering. Half of stock's value is the sector it occupies. Ford will get pounded thru mere guilt by association.

That being said, I think we can't allow them to fail. This country's population is growing and they need cars. Emerging markets are also growing, maybe not as fast as last year, but in the long term they are exploding. Millions of people need a $15K econo box to get from point a to point b. We need a player in that game we can't rely simply on one US car company. Chrysler barely counts because they're purely domestic. Big ticket items like wide body jets and Caterpillar machines are all we have going for us. All small consumer items have been lost to China for good. We really cannot afford to lose GM if we plan on staying in the manufacturing game. Service jobs at Wal-Mart and Costco are not going to meet the goals of American families: college and a House for their kids.

[Brucelee]

Originally Posted by Perfectlap

I woldn't touch Ford either (except to short it). Doesn't matter if Ford is running a brilliant company while Chrysler and GM are cratering. Half of stock's value is the sector it occupies. Ford will get pounded thru mere guilt by association.

That being said, I think we can't allow them to fail. This country's population is growing and they need cars. Emerging markets are also growing, maybe not as fast as last year, but in the long term they are exploding. Millions of people need a $15K econo box to get from point a to point b. We need a player in that game we can't rely simply on one US car company. Chrysler barely counts because they're purely domestic. Big ticket items like wide body jets and Caterpillar machines are all we have going for us. All small consumer items have been lost to China for good. We really cannot afford to lose GM if we plan on staying in the manufacturing game. Service jobs at Wal-Mart and Costco are not going to meet the goals of American families: college and a House for their kids.

I think a Chapter 11 workout for Gm and maybe Ford would work. No one is going ot invest in either unless they make a nice clean break from the past.

Chrysler is a goner I am afraid. Sell or die.

[Lil bastard]

It ain't looking good...may be time to dump it, take your losses and move on...

http://news.yahoo.com/s/ap/20090305/ap_on_bi_ge/gm_annual_report

[tboyer]

I was out a awhile ago, currently seeking a bottom on Citigroup, my guess is C will bottom out within the next couple of weeks. There was an interesting report posted yesterday on Reuters regarding upcoming talks surrounding the mark-to-market accounting rule. I'm watching financial stocks closely now, IMO they are way oversold and at nearly bargain basement prices.

[Perfectlap]

I don't think any of the three auto makers will close shop. Ford will make it, Chrysler (I have an inside track on that one) will be acquired and no President will ever allow GM to fail under his watch, certainly not a pro-Labor Dem. But the chapter 11 route is almost 99.9% certain, they're pretty far into their plans for that. They're just trying to figure out how to ****************-can the least amount of people but the layoffs will be huge.

To make matters worse, credit is not budging and oil is absolutely into its quiet recovery.

p.s.
STAY AWAY from those financials if you are an investor. Going long troubled companies in a protracted bear market is EXACTLY what the short sellers want you to do. I see another 30% decline for the big banks. We've still got 80% of the 09 bank failures to come. Which will of course heavily favor the survivors who are now getting murdered. Like cockaroaches in a nuclear winter.

[jmatta]

GM is going to file chapter 11, so stay away. As for the financials? Citi, BoA and Chase are all insolvent if you strip away the government money and factor in the off balance sheet (level 2 and 3) investment losses. Citi's market cap at .98 a share is nil. BoA and Chase aren't far behind. Chase will have to suck up $41 B in Bear Stearns losses and the WaMu fallout rendering them nil, unless Obama keeps handing out bailout money. BoA and Citi are effectively nationalized already, so why don't we call a spade a spade?

[bkiersz]

Originally Posted by Perfectlap

I don't think any of the three auto makers will close shop. Ford will make it, Chrysler (I have an inside track on that one) will be acquired and no President will ever allow GM to fail under his watch, certainly not a pro-Labor Dem. But the chapter 11 route is almost 99.9% certain, they're pretty far into their plans for that. They're just trying to figure out how to ****************-can the least amount of people but the layoffs will be huge.

The fallout is going to be the real problem. When GM and/or Chrysler files the auto suppliers that are hanging on by a thread as it is are told that they aren't going to get paid what they are owed currently, it will be lights out. Not to mention that typically they would have to send back the last 60 or 90 days worth of receivables collected (may be waived or not possible). Regardless, many aren't going to make it.

They will drag Ford down with them. If Ford can't get parts because the suppliers shut down they can't make cars. Being in better financial position today is no guarantee of survival. They are simply the nicest looking rat in the dumpster.

It has been said time and again that the only thing worth anything out of Chrysler is Jeep. Even if they are acquired I wouldn't anticipate that they will be making anywhere near the number of models that they currently have.

Detroit is going to become a ghost town. Then we can ask Gettlefinger if in retrospect he would have done anything differently.

[tboyer]

Originally Posted by tboyer

I was out a awhile ago, currently seeking a bottom on Citigroup, my guess is C will bottom out within the next couple of weeks.........I'm watching financial stocks closely now, IMO they are way oversold and at nearly bargain basement prices.

Not that I like to toot my own horn, however, looking pretty good today. Shorties look to be close to done on financials....

[ekam]

GM stock is a total steal now!!! Let's buy some more OP!