For the week ending June 5, 2009, these are the most important or newsworthy reels to hit this blog’s radar, summarized in 1,000 words (give or take a few thousand):


The biggest event has been the much-anticipated declaration of bankruptcy and subsequent filing for Chapter 11 by the late great General Motors, on the heels of Chrysler’s own reemergence. GM has been able to find willing buyers for less-than-stellar performers. Penske Automotive Group, Inc., owned by race-car team owner Roger Penske, will get GM’s Saturn unit. Opel was sold to Magna International in Canada. Hummer may not be as fortunate. Chinese regulators have indicated that they may not approve the deal with Tengzhong Heavy Industrial Ltd. While no additional explanation was provided (as usual), it has been inferred that China’s government has been pushing its businesses to buy parts manufacturers, which have been more organic, profitable and less risky than automakers in recent years. Either way, reorganization continues, buyers or not.  With bankruptcy reorganization comes the usual round of third-degree lashing car executives should expect from angry Senators at the Hill. Question: If you were a bigshot executive from one of the Fallen Three, would you risk incurring the wrath of the government for a few billion in change… or would you rather face your mom? Yeah, I thought so.


Disgraced Countrywide Financial CEO Angelo Mozilo was finally brought to bear for his impudent excesses in the wake of the sub-prime mortage fiasco. On June 4, the US Securities & Exchange Commission filed a civil lawsuit in a Los Angeles Federal Court against him. The Lorne-Greene dead ringer and poster child of everything wrong with the mortgage industry was charged with securities fraud and insider trading. Along with Mozilo are two others, former Chief Operating Officer David Sambol and CFO Eric Sieracki. The SEC hopes it can nab the trio based on a series of emails wherein Tangelo expressed doubts about the stability of Countrywide during a recession.  At the heart of the lawsuit is Mozilo’s walking away with $140 million, from a supposed legitimate stock sale (Read: Stock Options).  Seriously, Tangy, a little humility will get you off easy. Take your cue from the CEO’s of the Former Big Three. At least none of them will be doing jail time anytime soon, for screwing up their respective companies. Tangelo might be the first CEO we’ll see in an orange jumpsuit. He would make a great cellmate for wanted Credit Suisse broker Julian Tzolov, who’s accused of selling subprime mortgage securities. Tzolov is still at large and wanted by the Feds.

Other News to Report – Noteworthy, Not-So-Big Yet Still Relevant:

Mortgage rates are bouncing back up, so if you’re one of the lucky few to be looking, now might be a good time to start shopping.  If you’re selling, like what Treasury Secretary Tim Geithner tried to do with his beautiful Tudor-style Westchester, NY home, you may be out of luck. Geithner had to settle for renting the house out for $7,500 a month. Still not so bad.


Not good, and not enough is the rate at which unemployment is decreasing. There are a confusing array of reports, but the least you should know is that it has (allegedly) stopped increasing. There’s still unemployment going on; it’s increasing, but not any faster (and maybe even slower).  In terms you would understand: As a country, we’re still bleeding jobs – just not as fast as what we had last month.


Lastly, commodities. They are back on the rise, especially oil. That’s been enough to get Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler concerned enough to report to a Senate hearing that futures contracts needed to be standardized, and derivatives to be more tightly regulated.  And rightly so. After all, it was the abusive exchange of Credit Default Swaps that got the world’s banks into all this trouble in the first place.

Have a great week, and may Fortune smile on you and your investment choices. If the latest news is any indicator, the omens may be right.  Getting ready to get back in that investing groove?  Just remember what that Knight at the Grail in Indiana Jones and the Last Crusade says. “You must choose… wisely.”

Copyright Anabasius 2009


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