Thursday, May 28, 2009
I was right! I was right! Anyone listening?
Not to say I told you so, but I told you so. Bondholders are in line, but Bankruptcy is still immiment, or innevitable, or something that is going to happen like really, really soon. As I said yesterday, the whole showdown was a facade, and whether the bondholders were on board was irrelevent to the necessity of filing.
The new plan seems a bit different than what I opined yesterday, as it seems to be a basic "boot strap" reorganization, where the "bad assets" are shed, while the good assets are reorganized in some form of ongoing entity. Oh, and it looks like all the government aid, some 20 billion or so, is going to be forgiven--I hope I get a Holiday Card for my share.
This is a fairly lame solution to a complex issue, and that it doesn't force technology evolution in a way that would revolutionize the car industry. It is ultimately a buy time resolution, where what is really wrong with the car companies will be dealt with later. That being said, as I said yesterday, 3 million jobs is a whole lot of jobs, and now might not have been time for a bold solution.