The only thing standing between Ford Motor Company and a Federal Bankruptcy filing is an addled 91 year old Billionaire whose brain is clearly not getting enough oxygen.
Unfortunately for the employees and pensioners of Ford, Kerkorian is a mere speed bump between here and bankruptcy court. I am curious as to who gets there first: G.M. or Ford? American Airlines or United Airlines?
That the end is in sight for some of America's most storied corporations is fairly obvious to anyone with a capacity for abstract thought and an absence of American T.V. programming. Total Vehicle Miles Traveled is declining and will continue to do so - FROM THIS POINT FORWARD. We have enough vehicles on the road RIGHT NOW to finish off the future fuel available for indivdual motorists. So why build even another car? The auto industry has to deny the future, much as a terminal cancer patient must deny the future - but car buyers do not - AND WILL NOT. It is not long before the public figures out that any car they buy today will outlive its fuel supply. Their reaction will be swift and sure. They will stop buying new cars powered by gasoline and diesel with an internal combustion engine. I know I am not going to buy a new car given the outlook. Would you buy a new car?
Ford and G.M. don't make to 2010 before filing for bankruptcy. The effects on the pension system and the debt markets will be freaky deaky (That's technical speak for severe dislocations).
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The mortgage debt market continues its slide into oblivion.
The backlog of homes in the U.S. WILL NOT CLEAR before they take the banking system down in a crisis far worse than the Savings and Loan debacle of the early '90's. No amount of sunny speeches from the Treasury or the Federal Reserve is going to change this. By next year, Oil could very well be over $200 per barrel - giving the U.S. a trade deficit of well over $1 Trillion. How very well over? Very, Very VERY well over $1 Trillion. Import inflation is going to rattle the fillings out of what is left of Wall Street's teeth when the housing market really starts to go. So don't listen to those Wall Street jerks. IT IS different this time. We have a serious energy shortage for which their are NO answers.
So here's what I am gonna do:
I am going to get rid of every American $ I have. I am going to own precious metals, Oil and Natural Gas futures, and agricultural property and commodities... Then I am going to take a vacation. Have lunch with my wife or my friends everyday. Take my toddler swimming every afternoon, and watch my older son play baseball. Enjoy good meals, and a good night's sleep. I am going to exercise, ride my horses, and work in my garden, surf when the waves are up, and go swimming when they are not.
You gotta know when to fish, and when to cut bait. This tsunami is going to come down on us like a freight train (that is not a light at the end of the tunnel, its that darn train). I have been extoling folks to get their house in order. This may be your last opportunity.
Good Luck!
Yours for a better world,
Mentatt (at) yahoo (d0t) com
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Regarding the US auto manufacturers (aka internally ossified dinosaurs), "The Truth About Cars" online auto magazine has been running a Deathwatch series on most of them for some time now. GM was firstest and mostest, but in recent years Ford and Cerberus Motor Company (formerly Diamler Chrysler) have joined in with their own series. No one over there sees much hope for them, even before the current huge run up in oil prices.
They've been slowly bleeding to death for some time now, mistake after mistake (whole books have been written on their decades-long bungling, beancounting, and mismanagement of the Detroit 3). High fuel prices is the final nail in the coffin.
As to which will collapse first, my money has always been on GM, but I cannot imagine Ford to lag far behind them.
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