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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	3/11/2003 3:01:20 PM
From: energyplay	Read Replies (1) of 74559

Wave of Bankruptcies Will Wreak Havoc By James J. Cramer 03/11/2003 02:25 PM EST Click here for more stories by James J. Cramer I sure wish we had a better bankruptcy system, because we're going to need it when we're finished with the filings that are about to hit the airline industry. I don't know where all of the debt for these companies is held. It's fractured as part of a ridiculous series of taxation opportunities many companies have exploited. But you can bet the reorganizations that will spring off the bankruptcy filings will produce chaos. That's because the various competing interests don't produce an optimum result for anyone. I can't remember a whole industry filing for bankruptcy before. But within this period, we have the possible bankruptcies of the airlines, power merchants and telcos. No, not all players will end bankrupt. But a decent plurality in each of these industries may do so. What should happen? I know my newfound Republican friends are loath to have the government intervene on issues like these. But what they don't understand is that the government will be very much involved in the reorganizations of these industries. It's just the wrong, noneconomic end of government: the courts. The courts will do the same terrible job they are doing handling the asbestos claims. They have no sensitivity to the economy and to the havoc they cause with their judicial preening. Someone in the government -- perhaps the Treasury, perhaps Commerce -- should take an interest in this stuff, if not actively try to form a consensus of what should happen, and what would be best for the economy. As much as people might despise the previous president -- which I can understand from a purely "Dad" point of view (I have two daughters) -- at least he had a Treasury team that could deal with these issues. Right now, everything's just completely ad hoc. These industries are going under. There will be huge losses. There will be gigantic job losses. There will be tremendous ripples in the economy. Is it too much to ask that someone in government be focused on this stuff and not just trying 24/7 to cut my taxes? Probably. Random musings: The market likes Rumsfeld? It figures: He's decisive. Seems like he's one of us, no?

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