Don’t blame the credit crunch for GM’s failure 1 Jun 2009 The financing crisis certainly didn t help the carmaker. But the writing was on the wall for years that GM s liabilities would consume its assets. Executives and unions acted too late and too slowly. With luck, pressing the reset button with the help of taxpayers will work.
Why no sterling crisis? 1 Jun 2009 The UK economy and public finances are in a mess. But parliament is transfixed on the scandal over MPs expenses. It sounds like a recipe for market panic. Yet the pound is holding up largely because the odds of an early election and a Conservative landslide have risen.
US mortgage investors amplify Treasury sell-off 1 Jun 2009 The government s massive borrowing needs and investors rebounding risk appetite have caused Treasury bond prices to fall. Hedging by mortgagebacked securities investors is adding to the selloff, possibly hurting the housing market and those MBS investors even more.
DJIA rejig underlines souring of Weill’s legacy 1 Jun 2009 The former Travelers boss built Citigroup before spinning the insurer off again. Now Travelers is replacing the failed Citi megabank project in the Dow Jones Industrial Average. Cisco, meanwhile, is finally displacing bankrupt GM. The irony, though, is all on Weill.
Ford gets bupkis for its financial virtue 1 Jun 2009 By cleaning up its two US rivals Uncle Sam has put Ford at a competitive disadvantage. As the top GM shareholder it s also conflicted. Ford may not need a handout, but there are ways the government can level the playing field.
General Motors bankruptcy: in their own words 1 Jun 2009 The carmaker s executives have been denying the need for bankruptcy for as long as Breakingviews has been advocating it as a way to restructure the troubled carmaker. Herewith, we ve compiled a selection of comments both bullish and bullheaded since late 2005.
Is the Fed ignoring its own stress tests? 1 Jun 2009 Not quite. But the US regulator has added a kicker for healthy, capitalrich banks waiting to pay back Tarp cash: prove you can raise more capital first. JPMorgan and Amex have already jumped. Even JPMorgan's $5bn is a modest amount, but the Fed shouldn't need this extra proof.
Is Canada – not the US – the world’s safe haven? 1 Jun 2009 Its biggest bailout to date wasn t one of its own but rather GM s local arm. Its banks are sound, its recession relatively shallow, and its finances in reasonable shape. With an economy strong in resources and a fiscally careful government, Canada looks safer in turmoil.