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Tuesday, May 19, 2009
Friday, May 1, 2009
What does the Chrysler bankruptcy do for you?
I think that the Chrysler bankruptcy makes people reevaluate their beliefs regarding the U.S. auto industry People are receiving a wake up call about the Obama administration. The bankruptcy will make investors change the belief that "government will not let these companies fail".
I heard a similar grumbles when Countrywide, Lehman, Wachovia, and Washington Mutual were in trouble. Investors were still in disbelief that their investments were wiped out. The "shell shock" caused people to "hold & hope". That means that investors were hesitant to cut their losses and regroup. We have all been in a similar situation but the difference today is that there is no Bush administration to save the executives from legal liability. I believe the Obama admisitration is making it very clear that if the government must interfere in the regular market movements such actions will come at a very high cost to all involved. This will lead more executives and union leaders to become competitive on a global scale in order to make up for the domestic constaints of the government. Thought this may not bold well for the domestic labor force it may be the jolt that drives American companies into the global market place once more.
There are many U.S. companies that will grow and become the new "legacy" companies of the future. Buy and hold will not work for companies who have a broken business model.
I heard a similar grumbles when Countrywide, Lehman, Wachovia, and Washington Mutual were in trouble. Investors were still in disbelief that their investments were wiped out. The "shell shock" caused people to "hold & hope". That means that investors were hesitant to cut their losses and regroup. We have all been in a similar situation but the difference today is that there is no Bush administration to save the executives from legal liability. I believe the Obama admisitration is making it very clear that if the government must interfere in the regular market movements such actions will come at a very high cost to all involved. This will lead more executives and union leaders to become competitive on a global scale in order to make up for the domestic constaints of the government. Thought this may not bold well for the domestic labor force it may be the jolt that drives American companies into the global market place once more.
There are many U.S. companies that will grow and become the new "legacy" companies of the future. Buy and hold will not work for companies who have a broken business model.
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