GM: B for Bankruptcy, not Bailout.

This issue with General Motors has been ongoing for weeks now and seemingly the most obvious solution is similar to what banks and non-bank financial institutions received- a bailout. Today, the US Senate agreed on a $25billion loan to GM to save the company. The loudest argument against non-bailout is the spiral effect bankruptcy/failure has not only to GM but also to thousands of its suppliers who run the risk of similarly filing for bankruptcy if GM is allowed to fail. Following the huuuge job cuts pending the failure are the big sums of money that would certainly be needed to support the families of people who lose their jobs and to meet benefit obligations- health care, pensions, etc.

While I do admit and agree that GM’s, perhaps including Ford’s and Chrysler’s failures, pose some level of systemic risk, bailing them out (in the meantime) does not relieve them of the inefficiencies that currently exist in their systems. Receiving the bailout funds would only permit them to continuously fund their insanely quick cash burnout rate. For the 3rd quarter, GM used a whopping $6.9bn or $2.3bn a month while Ford reported the figure $7.2bn.

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Wines for the Holidays

I am not a big fan of wines but a feature on the CNBC website roused my interest and I thought I’d copy its contents here. Just for keeps.

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“Since Thanksgiving is an American holiday, I’m going with American wines for the most part. And even at Thanksgiving, there’s no predicting exactly what will be on the table, so we need versatile, light- to medium-textured wines that will match with the 10,000 mains and sides they’re likely to encounter.

First, a Pinot Gris from Washington State or California, like the Willamette Valley Vineyards 2007 Pinot Gris ($16). A bit tart, a bit spicy, very fruity and crisp. And then, shoot me for being predictable: Pinot Noir. Let’s pull J Vineyards & Winery 2005 Nicole’s Vineyard from Russian River Valley ($42). Again, a touch of spice – the Thanksgiving meal can be so “same-old, same-old” from year to year, you need to wake it up – but mostly great cherry fruit on the silkiest pillow imaginable.”

Oil Break-Evens

Going back to more than 3 months ago, in July, the price of oil peaked at $147 per barrel. While some analysts predicted oil going up even as high as $200 per barrel, many others saw this as nothing but a bubble that soon will burst and undergo price correction. The past couple of weeks, oil has been hovering under $70 a barrel bringing down majority of the prices in gas pumps to less than $3 a gallon. Today, the oil settled at $65.25 pb; it dipped to as low as under 64 just several days ago.

The big spike in oil price months back certainly boosted revenues of major oil producing countries, whose windfall profits helped fatten some of the existing sovereign wealth funds. It is therefore no surprise that Abu Dhabi, Kuwait, Qatar and Libya find themselves on the list of the biggest funds. Despite that, it would still be good and interesting to know that not all these states earn, let alone big amounts. Even at $80 or $90, some of these states might still be losing money.

Two Men, Two Speeches

Two senators: a Democrat, a Republican.

One a victor, another a fighter.

After two years of campaigning, a day of voting and hours of waiting, one finally wins as the new president.

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John McCain’s speech last night, as he conceded the presidency to Barack Obama (D-Il.), was no doubt the best he has given since eternity. Despite the occasional boos from the crowd, there was nothing but nobility, sincerity, and elegance in his speech. Coming to the election, most expected an Obama victory, and quite appropriately so. McCain’s defeat, or the GOP’s for that matter, may be attributed to a lot of different factors that worked to Obama’s advantage. The economy, the much loathed Iraq war, and more importantly, the way the campaign was run. Even I got sick of his Joe the Plumber tactic… and Palin, boy oh boy. Yes, she is charming, articulate, and even hot. But there was just so much about her actions that completely killed those complements. It might be better not to list them down.

The Artist

November 12 marks my third month of finding my luck in landing a job in the financial industry. While there are million others going through the same experience as me, it’s utterly difficult to take consolation in that while I see others continuously leave their marks one firm after another. It has been more than two years since I graduated with my undergraduate degree. Since then, I’ve made a lot of decisions, which at times I doubt were the best ones I’ve made. Certainly there are perks one could take out of those experiences. I’ve also believed for some time that things happen for a reason. However, it is particularly difficult to dig deep for reasons when one deals with frustrations.

When you’re in that very moment of disappointment, of frustration, of questioning, you very well know that answers could only arrive in time. That no matter how much you seek for them, it is the unfolding of events that help you figure things out. Piece by piece, the events let you understand why so and so happened. But in the meantime, you are stuck. You could try to make sense of things but comfort is never completed unless they are matched with often unanticipated events and experiences that help you confirm your initial beliefs.