What you can learn from this ebook

The demise of Lehman Brothers can only be understood within the context of the current financial crisis, the biggest financial crisis since the Great Depression. The roots of this crisis have to be found in bad regulation, lack of transparency, and market complacency brought about by several years of positive returns. I will start by explaining these three roots and then I will discuss how Lehman contributed to its own demise and what the consequences of its filing for bankruptcy are.

A few months ago, prior to GM filing for bankruptcy, it tried to sell off a couple of its brands. It was successful at selling Hummer to a Chinese company and Saab to another. Saturn looked like it was going to be sold off to Penske, but as of today that sell is just not going to happen.

The Penske Automotive Group decided not to go through with the deal because a manufacturer it had in mind to build the cars decided that it would not manufacture cars that would be distributed as Saturn.

GM’s CEO Fritz Henderson had this to say, “Today’s disappointing news comes at a time when we’d hoped for a successful launch of the Saturn brand into a new chapter. We will be working closely with our dealers to ensure Saturn customers are cared for as we transition them to other GM dealers in the months ahead.”

The deal wasn’t that great with Penske to begin with. GM would continue to produce three models through 2011, the Aura sedan, VUE SUV, and the Outlook. The other two models, the Sky convertible and the compact Astra would be discontinued. It is kind of sad to know that any dealerships would only be selling three models to choose from anyway in my opinion. Now, they won’t be selling any…

While sales have been dismal for the brand this year, some people have still gone out and bought new Saturns. So, the question now is what happens to the people who bought those cars? GM did say that it will honor the warranties of all the Saturn automobiles with deals with other GM dealerships. So, you may have to take your Saturn to a Chevy dealer to get it fixed.

Pontiac is the other brand that GM is getting rid of in the aftermath of the bankruptcy it filed at the beginning of the summer. I am actually kind of surprised that they did not try to sell of that brand as well considering that it had a pretty loyal following. Saturn also has (or had) a very loyal following. There were many people who would purchase a Saturn and never drive anything else. And for a GM car, it always seemed as though the Saturns lasted. When I was 16 and learning how to drive I really wanted a 2001 Saturn SC2. I had my eye on that car until they changed the body style a couple of model years later, and then just did away with the style altogether.

I feel for you loyal Saturn customers. This is not good news.

Source

Credit makes the world go around, at least in our capitalistic country. It seems these days there isn’t much that you can do without it; including landing a job.

It might sound crazy to you, because it definitely sounds crazy to me, but when you apply for a job and agree to a background check, the potential employer can also check your credit history. To me, this is not any potential employer’s business. What credit follies I may have made in the past I am obviously trying to rectify by getting a job and it will be very difficult for me to fix anything without a job.

Thanks to a steadily declining job market, credit scores are on the decline. People are getting behind on credit card payments, going into foreclosure, and filing for bankruptcy protection. So finding a job with a bad credit score is a double edged sword.

According to those who are for the credit score check prior to hiring an employee money problems could mean that the person has a disorder in their life that could lead to poor work habits, including employee theft. These same people said that those with great credit histories are less likely to have poor work habits and be trustworthy as well as reliable.

I, as well as some experts, think there is no clear link between a credit score and history and the job that an individual can do. I am not saying that there is something wrong with having a pristine credit history, just that you can’t count out those who don’t. Credit reports simply don’t account for layoffs, the overall economic conditions regarding unemployment, and things like medical bills or identity theft.

There is someone I know who is the best person with money. He actually is the biggest saver I’ve ever met. Unfortunately, through a couple of bad business deals and poor judgments of character, this man’s credit fell to a very low number. These kinds of things stay on your credit report for seven years for the most part. Think about it, if you can start your credit history when you’re 18, do you think you’re the same person at 25? How about the difference between 23 and 30?

I think that if an employer is going to check an applicant’s credit history, perhaps he or she should give the applicant the chance to explain blemishes on their credit report rather than just judging that applicant for things that may be nearly a decade old. Even though I would still not agree with the practice, I think that this would at least give the applicant a chance to explain the situation instead of just being thought of as a “bad prospect” to a potential employer.

Can Chrysler make a comeback from bankruptcy?

Question:

Yesterday, one of the Big 3 U.S. automakers filed for bankruptcy protection. Chrysler hasn’t really had the best time during the current recession. Was filing for bankruptcy the right decision and can the company make a comeback?

Answer:

I feel as though Chrysler’s options were very limited. Bankruptcy was really the only way to ensure that the company sticks around in the future. Hopefully creditors will work with Chrysler on payments so the company may be able to turn a profit again sometime in the future.

I think that if Chrysler plays the right cards it can come out a stronger company…What doesn’t kill you only makes you stronger, right?

Circuit City filed for Chapter 11 bankruptcy protection in November with hopes of emerging as a stronger company able to compete in the ever-expanding marketplace; shedding its $2.32 billion in debt and getting out of older real estate.

Unable to work out a sale or secure new financing, the company will instead spend its remaining days tallying money from the sale of its assets, breaking or assigning its leases and paying off its growing list of creditors.

Circuit City owes nearly $625 million to its 30 largest unsecured creditors — mostly vendors who supplied the DVDs, flat-screen TVs and headphones on Circuit City shelves. They must wait to be paid until secured creditors such as bank lenders are satisfied.

This is an example of a company that did not survive a Chapter 11 filing. In my last post, I wrote about how a couple of Republicans are speaking out about GM filing for bankruptcy. If the same thing were to happen to GM…there would be hundreds of thousands of jobs lost. You also have to take into account the supply chain that automobiles create, another few hundred thousand jobs would be cut if GM had to liquidate.

Source

Adding to the worries, the Journal Register filed for bankruptcy protection today following on the heels of the Tribune Company (which publishes the Los Angeles Times, the Chicago Tribune and the Sun of Baltimore) and The Star Tribune of Minneapolis.

Declining ad sales and the availability, ease and promptness of obtaining news on the internet has led to the decrease in newspaper sales and some companies filing for bankruptcy protection to attempt to reorganize their businesses.

The company has been having problems with not only debt, but the economy is making the service one of the first things cut from consumers’ budgets.

A bankruptcy would make Sirius XM one of the largest casualties of the credit squeeze. With over $5 billion in assets, it would be the second-largest Chapter 11 filing so far this year, according to Capital IQ. The filing by Smurfit-Stone, with assets of $7 billion, has been the year’s biggest to date.

Sirius XM, which never turned a profit when both companies were independent, is laden with $3.25 billion in debt. Its business model has been dependent, in part, on the ability to roll over its enormous debts — used to finance sending satellites into space and attract talent like Mr. Stern (who was paid $100 million a year) — at low rates for the foreseeable future until it could turn a profit.

It was only a few weeks ago that information leaked about Sirius XM’s rate hike and that people were signing into contracts to lock in the rates. Hopefully, the company will be taken over by another satellite provider (like EchoStar) and those subscribers can keep getting the service.
Source

Around 11 am this morning, Bloomberg News broadcast the story as new… That’s when the madness happened. Between the time the story was broadcast as “new” and 12:30 pm, when trading was halted, the stock dropped from around $12 a share, to $3. Even when trading resumed, it still didn’t completely recover from the damage done by the false story.

The staff at the Sun-Sentinel online still don’t know what happened or why the story was posted on their website. I am thinking it was probably just an accident, after all, I’ve seen some pretty disorganized newsrooms. Fowl play would be a little more fun though, as far as reporting on the story goes.