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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (43310)	10/12/2005 10:37:03 AM
From: carranza2	Read Replies (2) \| Respond to of 110194

I read somewhere yesterday that Kerkorian was taking whatever regulatory steps are necessry to increase his stake in GM, which suggests to me that he isn't looking for an exit strategy but for a way to maximize the returns on his plan. Wouldn't he get killed if he bailed now? Edit: My thinking is undoubtedly too simple; there has to be something deeper to what K. is doing.

To: patron_anejo_por_favor who wrote (43310)	10/12/2005 10:43:09 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

if you look at GM capital structure, the market cap is just a wahfair theen meent on top of a gigantic dogpile of obligations. those obligations aren't going away and they don't care what some old guy with a bouffant hairdo does in the equity market. these are not just pension liabilities, which until fairly recently GM was underestimating as it assumed a 10% long-term return on its pension fund (LOL!). also GM has huge medical liabilities (which, in the past at least, it also underestimated as it assumed slow inflation of medical expenses, double-LOL!) for existing employees and in OPEB. the stakeholders in pension and OPEB may have an interest in keeping GM a going concern, but that could be in the context of a workout where equity holders are SOL. on top of that, their cars suck -g-.