Eternal Vigilance

SUSAN TOMPOR: This financial fix can work, if the cash is spent wisely

Well here it is! The derivatives meltdown continues for GM with a subpoena for their precious metals transactions included gratis.What a knotted up mess. They have the audacity to say they didn’t see it coming? For shame. It’s the little guy who will get creamed when all of this is said and done and it breaks my heart as well.

Regards,
Mark

“The world’s largest automaker, which lost $10.6 billion in 2005, said
in a filing with the U.S. Securities and Exchange Commission that it has
received federal subpoenas for investigations on how it handled payments
from suppliers and also for its transactions in precious metals for its
manufacturing operations

Such a Shame, wasn’t Rush Limbaugh pointing to GM’s record “firesale” as good news?  Wasn’t GM’s “strongest month of sales in history” proof the economy was “humming right along”?  That man can’t see 5 mintues in fron of his own face.  If that was the case, and now GM is recording one of the biggest losses in US HISTORY, how is the economy.    Here’s your spin…

GM shares down over 4 percent on Delphi worries

The bankruptcy rush is on!  Financially troubled consumers are FLOODING the U.S. bankruptcy Court in Minnesota with chapter 7 filings, seeking to beat an October 16th deadline.  After that date, much more restrictive bankruptcy rules apply.  I’ve heard from business news casters that after the 16th, it will be almost impossible to keep your ability to commute (car) and shelter for you and your family (house).  In August 2004, 1,181 people filed for chapter 7 personal bankruptcy, in August 2005 that numbers LEAPS to 1,854.  That is roughly 60% increase.  To show you just how much 60% is, the dow would have to go from 10,200 now to about 16,000.  It gets worse.  In September 2004, there were 1,163 filings, and in September 2005, a whopping increaseof over 150% to 2,863.  The Dow would need to be around 26,000  to reflect that kind of growth.  These runmbers are all from the U.S. Bankruptcy court in Minnesota.  In the first week of October, the bankruptcy court in Minneapolis almost surpasses the entire month of October just one year earlier.  This economy just keeps getting stronger and stronger LOL.  Minnesota is around the national average for bankruptcy filings, and these spurts are being reported by bankruptcy clerks  across the country.  Numerous businesses such as Mesabe, NWA, Delta, Delphi, and even GM have either already filed for bankruptcy or might before the deadline.  GM wow, I hear there is a 30% chance of that.

President Bush signed the new law. the most far reaching overhaul of U.S. bankruptcy law since 1978.  “The people who wrote this bill didn’t care about efficiency or correctness.  They just wanted more money.”-Curtis Walker, Bankruptcy Attorny.

The new law also works against businesses by establishing a more creditor-freindly environment for them.  Personal Bankruptcy attorneys and consumer groups have harshly criticized the new law, which they say tilts the playing field too heavily toward credit card companies and other lenders and away from debt-laden consumers.  Don’t get me wrong, I think declaring Bankruptcy and screwing the credit card companies for money you borrowed is about as close to theft as you can get, but considering they charge 15-30% on money that they pay 1-4% to borrow from the fed, which in turn the fed created by adding a couple zeros on a keyboard.

Leave it to Americans, already so abviously in debt over their heads they can hardly breathe, to increase total debt to a new record in August.  Americans increased borrowing on their credit cards and for purchases such as autos.  The Federal Reserve said Friday last week that consumer debt rose at an annual rate or 2.7% in Ausust.  The overall increase in debt of $4.88 billion in August.  Seems like chump change after $6.4b increase in July, and a whopping $15b in June.  That brings AMERICAS SAVINGS RATE TO -.7%, the third straight month thw world super power has showed a negative real rate of return (interest - inflation).  I love my country, but that love does not require me to follow the pied piper thorugh the streets.  The total increase in consumer credit pushed the debt load to an all time high of $2.15 trillion.  We are just standing here…watching…laughing…..and you love your country?

All Financial Times News:  US consumer confidence dropped more than expected in August as consumers felt the pinch of rising petrol prices.

The University of Michigan Consumer Sentiment Index fell to 89.1 in August. The final revision published on Friday was down substantially from the preliminary 92.7, and down more than seven points from July’s 96.5.

The number of bankruptcies in the U.S. surged to an all time high in the second quarter of 2005.  Bankruptcy filings to federal courts in the April-june quarter totaled 467,333, according to data released Wednesday from the Administrative Office of U.S. courts.  The previous quarterly high was 440,257 in the second quarter of 2003.  For the 12 months ending in June 2005, bankruptcy totals reach 1,637,254, up from 1,635,725 a year earlier.  (this report released AFTER my pre-emptive news post was written)  FOXNews.com - Business - Bankruptcy Filings Up 16% As New Law Takes Effect