Monetary Dikes Created to Dam Fiscal Floods
This morning as I read an article concerning GM junk bonds on Bloomberg, I followed my now dormant investor's instinct to a rotting pile of putrid economic mistakes and policy decisions, gasoline soaked rags, cans filled with gasoline and diesel fuel awaiting ignition by yet another pilfering group of greedy arsonists.
Here's a related link to the GM page on Quantumonline.com that lists the corporate debt of GM, or what are now more commonly refered to as the junk bonds of publicly traded companies.
And this link to the Yahoo! Finance page describes the historical trading numbers and the dividend pay-outs for GKM, which is the ticker symbol for a 7.25% bond issued by GM in denominations that originally cost $25 per bond.
What this chain of modestly informed investor research shows is that a General Motors corporate bond that originally cost $25 is right now trading for a little more than $7.
This research also shows that the bond has continued to pay its monthly dividend with an annual yield of 7.25% on the original $25 cost without missing a beat.
The dividend on GKM bonds now equates to a 25% dividend when one considers the current price of GKM shares.
Plus the discount from the original $25 cost of this bond will be paid to the owner of said bond if and when GM ever decides to redeem this bond.
In any event the trading price of GKM varies according to the health of the company, and how big investors push its price around, up and down, according to their whim and fancy that has very specific and rapacious designs.
Inside information concerning exactly when all this might happen could prove extremely valuable. But ideally no one knows in advance generally any of the answers here about when these developments might occur except the thieves on Wall Street.
Kissing such advice and telling on Wall Street is what Martha Stewart went to jail for after all.
BUT OF COURSE THIS IS NOT THE WHOLE STORY!
The reason for the discount on the price of a GKM bonds, and all the other GM bonds too, is because General Motors Corporation is headed for bankruptcy if it doesn't get a big wonking loan from the federal government.
I've previously made the case how corrupt Wall Street is, how big money insiders push stock and bond prices around, up and down, in order to flush out nervous investors and entice in greedy investors that think they see a sure thing.
I've made the case how it's all done to reap gads of money from suckers just as if these suckers were standing in a field and along comes the thresher driven by big money insiders who don't just know the next move, they create it!
Well, those, like the perennially chiseling investing magnate Jim Rogers, who decry the gub'mint actions are right.
There is a sort of thievery that shouldn't be left to anyone but the likes of foul smelling old white-guy speculators like Jim Rogers. I mean here, those of you who know who Jim Rogers is, holy shit! imagine what this guy smells like up close after a couple a dozen Martinis and half an evening in a Alabama strip bar! I kid you not.
Because consider, the moment before the federal government steps in and bails out GM, the moment when all the thieving politicians in Washington D.C. are going to know what is about to definitely happen, these General Motors junk bonds are going to go through the roof, assuming the government thinks General Motors is too big to fail, and the government hasn't seen the worry of its ways in bailing out banks, insurance companies and just about everyone else who got too greedy to actually be seen as anything but wholly worthy of failing and being thrown overboard from this rapidly sinking ship.
Pray Paul Volcker becomes Treasury Secretary and that a garbage truck hits Ben Bernanke. Hank Paulson needs to go to jail.
We've got to stop letting government use our money to try and hold back the tide. All these American businesses that caught greed fever are clearly well below sea level.
It's quite similar to the value of real estate, which used to be all about location, location, location, but instead with the value of the dollar, it's about inflation, inflation, inflation.
And DO NOT buy GM junk bonds on my advice. You'll likely be screwed royally by some unforeseen snafu designed to screw you royally.
Here's an update. A NYTimes article today, seems to indicate from the buzz "“Michigan, and every state, needs swift action and leadership from Washington to address the short term challenges our national and state economies are facing,” wrote Ms. Granholm." Governor of Michigan, an auto-company bailout is in the works.
So, it appears that Barack Obama's first act as the leader of the free world's biggest gouging swindle will be to act as a hand-puppet for the continuance of the economic policies of George W. Bush by endorsing a fifty-or-one-hundred-billion dollar bailout of Ford and General Motors, and thus play into the hands of so many millionaires and billionaires who are salivating at the prospects of wholly unearned easy money that will result from this government intrusion into private enterprise.
This is an incredible turn of events that should leave anyone who has any economic sense wondering, if you cannot get a job at GM or Ford, (and you cannot), and if a lot of people are being laid off at GM and Ford, (and a lot of people are being laid off at GM and Ford), and if GM and Ford are losing literary billions of dollars every quarter, (and they just reported they've lost many billions) what the hell makes anyone think these companies have the financial worthiness to borrow (as in a bailout) money from anyone?
All this will do is make a lot of people on Wall Street richer, as witnessed by the first article I linked to here, an article that has subsequently helped drive down the price of GM junk bonds, just as the government is readying to bail out the auto companies.
What a swindle this all is.
Literally many hundreds of millions of dollars will be realized from the win of nothing but a gambling wager on Wall Street that the government will step in an bail out Ford and General Motors.
This follows similar wins by the very same people who drove the price of these companies right into the ground on bad economic news and short positions.
They make money on the way up and the way down too, and now, on the way back up again, and later again, when the reality of it all sets in, and these equity positions go back down again, they'll make more money again.
There is absolutely no product being made. This is nothing but a Wall Street swindle.
These bets will literally be paid off with taxpayer money made out of the bailout-business, and by screwing bailout-taxpayers.
These bailouts will do absolutely nothing to rectify the problems of our economy. In fact it will do exactly the opposite.