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Politics : Welcome to Slider's Dugout

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To: ItsAllCyclical who wrote (13475)	11/19/2008 1:33:15 PM
From: jim_p	18 Recommendations Read Replies (2) of 50450

Bankruptcy is the only solution for the autos in my opinion. It's the only way they can reduce their costs to be completive. The jobs don't go away when they file and they can do a pre-package that takes away all of the uncertainty on items like auto warranties. When the airlines filed for bankruptcy they maintained their frequent flyer programs and the auto markets can maintain their warranties. They need to be more than completive than foreign car makers because they make an inferior product and it would need to be a lot cheaper before they can maintain market share and be completive. $25 billion is a very small fraction of what they need to solve their problems and the money would be waited unless they could change their compensation for current and former employees. They are not going to maintain plants open and keep buying parts from vendors if they can’t sell cars with or without a bailout. What they need is for the economy to recover and that isn’t going to happen any time soon. I agree with Slider that the markets will tank if they don't get a bailout, but I'm opposed to it and I don't believe it will pass with this lame duck congress/president. The markets are not showing any signs of a bottom anyway. This market reminds me of the 70's when valuation/fundaments made no difference, the market just grinds lower and lower day after day. I remember quality stocks selling for PE's of 3 and 4 back then year after year. The de-leverage process is still ongoing. JQ Public is more interested in survival/jobs than trying to find a bottom in the stock market. The VIX is still very high The BKX still hitting new lows day after day. The only positive sign I've seen is the Ted spread coming down to 2.07, but it's still too high to get optimistic. Jim

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