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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Amark$p who wrote (101096)8/20/2009 9:02:48 PM
From: Elroy Jetson6 Recommendations  Read Replies (1) of 116555
 
General Electric owes about $680 billion in debt. What happens to that debt if GE files for bankruptcy three years from now?

1.) GE shareholders own nothing;

2.) People who are owed money by GE are paid-off with shares in the new post-bankruptcy GE;

3.) GE continues to operate with far less debt.

4.) Those who watch statistics note that nearly $680 billion of US Dollar debt just vanished when the judge said "mumbo jumbo" and pounded his gavel.

What about companies who own television and radio stations. A friend who's an exec with one major owner says their revenue is down more than 2/3. With more than 65% of their revenue gone they can easily pay salaries and their other costs, but they won't be able to make too many more payment on their corporate bonds.

That's a pretty easy problem to solve, isn't it? "Mumbo jumbo" says the judge and the bond holders become the new shareholders.

You're going to see so many deflationary feats of conjuring you won't believe what's happening.
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