So even though it still feels like we're going to be range-bound, I read somewhere that there was a good amount of action on May volatility, and so I took a second look at what's coming up. This Thursday is supposed to be the meeting/results on whether they should make any changes to mark-to-market accounting. Next week is supposedly when they make a decision on whether to reinstate the uptick rule. As I've mentioned before, I'm not a fan of the uptick rule, but I heard somewhere that they were thinking about only applying it to stocks that are already down 10%, which I think is a good compromise. Finally, in late April, we will get the results of the bank stress test. I guess all of these have the potential to move the markets, though I doubt they will do anything that's completely unexpected.
The thing that I found most interesting about the White House automakers meeting over the weekend was that they got Wagoner to step down without guaranteeing support for GM. I would have understood it if they said that they would support GM but only if he stepped down, but to have him step down just so GM gets a 2 month extension? That seems to me like an admission of total failure. Then I thought about it some more and came to this conclusion. If Wagoner was offered the ultimatum of no support at all versus a 2 month extension to come up with a better plan if he steps down, I think it makes complete sense to take it. If GM is immediately forced into bankruptcy, the stock will be worthless. This way, he gets to exit out of his stock (whether he believes they'll come up with a viable plan or not) while it's still worth something, without having any inside information. If this was actually what happened, it's an offer he can't refuse.
I also heard from a coworker that a Congressman said on CNBC that GM is essentially a health care company that happens to make cars on the side, or something like that. We thought that was amusing and a great way to put it.
No comments :
Post a Comment