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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Jim McMannis who wrote (21839)1/20/2005 2:09:26 PM
From: mishedlo   of 116555
 
Heinz on GM

as for GM, this company remains a bankruptcy candidate. a bust of the housing bubble would almost certainly do it (GMAC's exposure is enormous). its debt to capital ratio is downright frightening. what's more, it is not alone. many of the fomer industrial giants that have become giants of EZ credit finance could get into trouble. note also, the long touted 'measured pace' and aggressive short end accommodation by the Fed has had the side effect of shifting a lot of debt down the maturity spectrum - the need to constantly refinance, and the tightening short-long spread both could wreak havoc with a lot of balance sheets - and GM's surely is among the most problematic.
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