What difference does GM make to the Housing Market?
by Tom on May 27, 2009
in Market Musings
I’ve been thinking about the whole GM bankruptcy issue and I’ve got a couple of thoughts about it:
- I’m not sure that they are addressing the most important issue right now. What’s that? Put very simply: GM is building too many and too expensive cars and as they stand right now, they are not a sustainable business model. That’s why the US Government is having to send them billions and billions of dollars in 2009 just to keep them floating.
- Whether GM files bankruptcy or negotiates things out of court isn’t frankly all that important.
- What is important is whether GM can restructure into a viable and profitable organization or not. What does that restructuring mean? How many GM employees are going to be “trimmed” and what is the ripple effect into providers and local employers is going to be. That’s the big question.
So what difference does that make to the housing market?
JOBS
Yep, Jobs will have a much bigger impact on the housing market than GM bondholders will.
Tom
GM bondholders not interested in debt-equity offer – May. 27, 2009
General Motors said Wednesday that it has fallen far short of the bondholder support it needed for its proposed debt-for-stock offer, virtually guaranteeing that the nation’s largest automaker will be forced to file for bankruptcy court protection within the next five days.
