From Martin D. Weiss, the man who predicted a General Motors bankruptcy back in October of 2005 …
GM Bankruptcy Unstoppable! Will Sink U.S. Economy!
Outright bankruptcy for General Motors is now unstoppable; and anyone in the Obama Administration who tries to paint lipstick on this mammoth pig will get his headed handed to him.
The General Motors bankruptcy will:
- Gut America’s auto dealer network
- Cause a chain reaction of failures among auto parts suppliers
- Drive GMAC so far into the red that even the Obama team will balk at pouring more good money after bad to bail it out
- Wipe out any positive effects from the economic stimulus package
- Drive an even larger hole in the balance sheets of America’s largest banks
- Sink the U.S. economy into a new, hair-raising decline.
Past Weiss Forecasts:
Martin D. Weiss warned unambiguously about the General Motors bankruptcy on October 11, 2005, with his Money and Markets article headlined “GM Headed for Bankruptcy.”
He also warned, well in advance, about nearly every major financial failure in recent years. (See “The Only Ones Who Warned Ahead of Time.”
{ 7 comments… read them below or add one }
Three years ago I had written the following letter to Rick Wagoner:
Sub: Unsolicited advice from an ordinary consumer
Dear Mr. Wagoner:
It is well-known that your company has been in deep financial trouble which is only getting worse each day. I also understand that there is a lot of accounting and cost-cutting activity going on which may be of marginal benefit short-term but will do absolutely nothing to cure the problem long-term.
The fact of the matter is that, in order to turn things around, you need to sell more cars and, in order to that, you need to make cars that most people want.
I own a 1991 Toyota Corolla and am in the market for a new car. However, I am not even thinking of GM as an option but have set my sights on a Toyota Camry or, perhaps, a Honda Accord – cars that have become synonymous with quality.
And why is this so? When making a major purchase like a car, what me and most consumers like myself look for, first and foremost, is Reliability. A car that will not break down all the time and cost me an arm and a leg in repeated repair costs. A corollary of that is, if the car does ever break down during normal operation, most repairs will be quick, easy and inexpensive.
The second thing I would want, in these days of ever-rising gas prices, is Fuel Economy which, in my case, is at least 33 miles per gallon.
Once these requirements are met, the two other things I will look for are (a) Comfort and (b) Looks.
Now, Japanese cars have established a solid reputation in all these areas which is why I intend to spend my hard-earned dollars in a Toyota or a Honda.
However, I do not believe for a moment that a company like GM, with all its resources, cannot also produce cars that meet these four simple criteria. So, as a Joe Blow consumer, I would humbly suggest that you focus all you efforts towards this single objective and I am sure the marketplace will reward your company.
A few days later I received a call from someone from GM who wanted to give me the employee discount for a GM car. I told him that I was not looking for a discount but rather quality because for me a car is a big investment.
Well, I tried.
FWIW.
my understanding is that the bond holders will be paid by AIG in the form of credit default swaps or default insurance sold by AIG. The only way they will be made whole is if GM files, and sets up the default.. which will be paid for by the US TAXPAYER… through further bailout to AIG.
This is all part of the pigs feeding their friends…(other pigs)
This is why the bond holders won’t cut a deal!!!
Ok Martin,
I have a question I really really need your insight on. I put everything I had into a dumptruck in late 2006. Bad mistake. The question I have is: Since it’s almost impossible to sell with the market so flooded. I would like to know your honest opinion on weather or not it might be something good to have when we actually do bottom out and the economy can recover? It is paid for and I could sit on it.
The best I could hope to get for it right now would be like 35-40% what I paid for it which would be about 15-20k. I am in a serious stink box and could really use some advise on this. All constructive comments welcome.
Best wishes to all.
Jeff
Mr Weiss, I just read how Goldman and JP Morgan will be returning tarp funds next week. What can be the rational that the regulators are allowing two of the highest risk financials to return the funds. As a speculator I read your work and website daily. I am speking on that JPM along with the rest of the market to get another slapdown in the next 3-5 months. I am going with deep out of the money $5 put options for jan 2010 @ 5 cents.I just bought my first 100 contracts. I would like to gather another 400 at these levels. Anyone have any thoughts on my position.
Mr Weiss:
First thanks for all you do!
Can you possibly shed more light on Derivatives? A very confusing subject! According to BIS the OTC Derivative market is $683 trillion and the notional exchanged traded derivatives is $59 trillion for a total of $743 trillion. I understand from reading a 2003 Dallas Fed report that the notional value is “the amount on which interest and other payments are based and typically notional value do not change hands; it is simply a quantity used to calculate payments.” The report explains that while the notional values are very high, the total credit exposure for the banks that hold them is much smaller, estimating the actual credit exposure at that time was about 7%. And stated that quoting the total notional value distorts the actual risk.
http://dallasfed.org/research/swe/2003/swe0302b.html
Although a dated paper and I’d be curious as to what the author might say today on banks conditions as compared to the statements made in the paper, it does provide some insight and examples on how derivatives function.
Thanks!
Can you explain this and shed any light on the actual risk?
I have been reading this website for over one year and it has allowed me to preserve more capital than if I had stayed fully invested. I have to admit that Martin has been proven right many times and with this recent news on Chrysler, GM and material negative GDP for the Euro Zone, I believe we will retest market lows over the next months as unemployment numbers continue increasing at an allarming rate. I will be increasing my cash position further and buying more FAZ (triple bear on financials) or SKF (double bear on financials) which have the potential to explode over the next months.
What role will the AMEROS currency play. Will it be a repeat of a stroke of a pen as it was in 1930 or perhaps a click of the button today, so the USA will reign the new AMEROS CURRENCY in. Hillary Clinton did say to China I have the solution, you keep on lending us the money and you guys can keep on producing whilst we keep on spending on your products.
What is TRUTH???????????? Is there an ameros or just not true.