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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TH who wrote (22659)	2/2/2005 10:04:49 AM
From: blind-geezer	Respond to of 116555

Now if those miners could just start a move, everything would be good -g- wishful thinking, dude <ggg>

To: TH who wrote (22659)	2/2/2005 2:24:19 PM
From: ild	Read Replies (1) \| Respond to of 116555

TH, as usual F is up big after horrible data. Apparently have have hit THE bottom. -ng-

To: TH who wrote (22659)	2/2/2005 3:09:21 PM
From: microhoogle!	Read Replies (1) \| Respond to of 116555

Fiat, GM fail to reach accord on car unit financialexpress.com MILAN, FEB 2: Fiat and General Motors both refused to blink in a stand-off over whether the Italian group can force GM to buy its ailing car unit, raising the threat of a long legal battle and battering Fiat’s shares. A mediation period to settle the spat ended at midnight but on Wednesday both companies dug into their positions. GM insisted Fiat has invalidated the put option while Fiat said the put is exercisable and could be used any time from now on. Investors had hoped GM would pay Fiat about 1.8 billion euros ($2.4 billion) to drop the option and had sent the stock 7% higher over the last month. The lack of a deal and the fact Fiat held off exercising the put sent the tractors-to-robots group tumbling. At 1110 GMT Fiat was down 4.7% at 5.905 euros. The Agnelli family holding group Ifil, Fiat’s top shareholder, fell 2.2%. “There is enormous disappointment out here. There’s now the risk of an infinite litigation,” said a Milan-based trader. GM insists Fiat invalidated the put option by changing Fiat Auto in a recapitalisation which halved GM’s stake in the unit to 10%, and by selling its finance arm. Fiat disagrees. GM’s euro bonds pared losses after opening lower. Traders noted GM did not have to make any immediate payment to Fiat. The cost on insuring against default on Fiat debt rose. Analysts said there was still a strong chance that GM would pay to get rid of the put headache and concentrate on cutting its hefty European losses while keeping its investment grade debt rating in the light of weighty US healthcare costs. “Up until now it’s been a psychological battle, but that doesn’t preclude them reaching an out-of-court settlement,” said Gareth Williams, an autos analyst at Actinvest. Analysts have said Fiat could seek up to 3.6 billion euros to cancel the put option although most expect the final amount to be 1.5 billion to 1.8 billion euros. “I think diplomatic negotiations will go on behind the scenes. GM needs to get rid of this sword of Damocles and court is a risk — it could go either way,” said Patrizio Pazzaglia, a fund manager at Bank Insinger de Beaufort. Others said GM would start litigation to prove the put was invalid, but GM said it had “no idea” if it would go to court. “We expect GM to play hardball and contest the put’s enforceability. A fraction of the sums at stake pays plenty of lawyers’ bills,” said Stephen Cheetham at Sanford Bernstein. Fiat seems to be in a stronger negotiating position with the option still in hand but it also has more pressure on it to sort the issues out as soon as possible so it can forge new deals with other carmakers to cut costs and cash burn, analysts said. —Reuters