Microcosm
Delphi files for bankruptcy
[click title "Microcosm" for link to article]
I haven't headed up an article before on an individual company but now might be the right time to start. There is a swathe of ominous warnings circulating at the moment regarding the health of the US stock market. In our globalised world economy naturally that means the world stock market.
With inflation now more than a threat, it seems likely that the last ten plus years of monetary expansion may well have ended. As growth in the money supply continues to slow asset valuations will come under increasing pressure. Invariably our asset bubbles in equities and property will deflate and/or collapse. I like to think that a declaration of bankrupcy by General Motors will be a significant tombstone in this process.
Delphi is a huge auto parts manufacturer (185,000 employees) that was previously part of General Motors. It was spun off and floated as a seperate entity but with strong contractual ties to its original parent, GM.
Delphi's filing for Chapter 11 protection is yet another step in the inexorable unravelling of General Motors. With an astounding USD 130 billion of corporate debt/bonds on issue (through GMAC) General Motors has become a microcosm of the pre-recessionary US economy.
[click title "Microcosm" for link to article]
I haven't headed up an article before on an individual company but now might be the right time to start. There is a swathe of ominous warnings circulating at the moment regarding the health of the US stock market. In our globalised world economy naturally that means the world stock market.
With inflation now more than a threat, it seems likely that the last ten plus years of monetary expansion may well have ended. As growth in the money supply continues to slow asset valuations will come under increasing pressure. Invariably our asset bubbles in equities and property will deflate and/or collapse. I like to think that a declaration of bankrupcy by General Motors will be a significant tombstone in this process.
Delphi is a huge auto parts manufacturer (185,000 employees) that was previously part of General Motors. It was spun off and floated as a seperate entity but with strong contractual ties to its original parent, GM.
Delphi's filing for Chapter 11 protection is yet another step in the inexorable unravelling of General Motors. With an astounding USD 130 billion of corporate debt/bonds on issue (through GMAC) General Motors has become a microcosm of the pre-recessionary US economy.
posted by Peter at 9:19 am
2 Comments:
Anti-spamming measures have been initiated.
To those responsible....karma-debt.
Perfect storm forming in the economy.
CNN's Ali Velshi says the holiday season economic forecast, pressed by rising energy and food prices, looks gloomy.
http://money.cnn.com/
More mainstream commentary heading in an increasingly bearish direction.
On a personal note, I saw Cinderella Man on the weekend. The images of destitution and hopelessness were compelling.
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