Tuesday, June 2, 2009

Quick Notes & Articles for the Day - June 2

Editorials everywhere today about GM and its bankruptcy and a few are included in today's post.


Pending Home Sales Up for Third Straight Month - Pending sales of existing homes were up for the third month in a row in April boosted by record-low mortgage rates and special incentives for first-time buyers the National Association of Realtors (NAR) reported Tuesday. The pending home sales index for April rose 6.7% after a 3.2% increase in March. The index based on sales contracts on existing homes was 3.2% above April 2008.

Combine SEC and CFTC? - SEC Chairwoman Mary Schapiro testified before a Senate Appropriations subcommittee on Tuesday about combining the Securities and Exchange Commission and the Commodities Futures Trading Commission. She said, "There is a logic and efficiency that can be achieved through a merger of the two agencies, but short of that we can work together effectively."


How GM Lost Its Way - The Wall Street Journal - "Decades of dumb decisions helped send General Motors to a bankruptcy court yesterday, but one stands out."

The Quagmire Ahead - By David Brooks - The New York Times - "On Jan. 21, 1988, a General Motors executive named Elmer Johnson wrote a brave and prophetic memo. Its main point was contained in this sentence: 'We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.'"

How Washington Blew GM’s Bankruptcy - By Michael Levine - Financial Times - "As General Motors finally filed for bankruptcy on Monday, some critics of the move have already made the case that Congress, not a White House task force, should have planned the bankruptcy. They are right about one thing: a White House task force should not have planned the bankruptcy. But they are 180 degrees wrong about what the government should have done. The bankruptcy needed much less “public policy” input, not more."

As GM Goes So Goes California in Pensions - By Roger Lowenstein - Bloomberg - "Did pension debts ruin General Motors? I said they did in While America Aged, a book published last year. The thesis was that many decades of inflated pension and health-care benefits forced the company to redirect its free cash flow to retired workers. As a result, there was little or nothing left for the shareholders."

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