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  1. #26

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    Quote Originally Posted by JBMcB View Post
    Ford had already mortgaged out their properties before the recession and was much more liquid than GM and Chrysler, It wasn't that Ford was clever, it was that they were lucky with timing.

    Or, they could see what was forthcoming, and prepared for it. Is the glass half empty or half full?

  2. #27

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    There is one other contributing factor to Ford not going bankrupt. Ford Motor Is still tightly controlled by the Ford Family.

    Ford Stock comes in two varieties. Class A and Class B stock. One of those classes is primarily owned by the Ford Family. That class of stocks has a majority of the stock holder voting rights and can out vote the other class of stocks.

    If Ford had gone bankrupt, both classes of stock would have been made worthless. The Ford Family would have lost their voting power over Ford the company.

    The Ford families golden goose would have been cooked.
    Last edited by ndavies; August-13-19 at 09:10 AM.

  3. #28

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    Quote Originally Posted by 401don View Post
    ...snip...The spillover effect would have devastated an already crippled U.S. economy for years.
    I found it hard to believe at the time someone like Romney, originally from Michigan, was that stupid.
    The idea that businesses who aren't prepared for rainy days should be allowed to fail isn't 'stupid'.

    There is a reasonable argument that the moral hazard is created by our willingness to 'bail out' businesses who fail.

    We have two choices in how we structure our economic society.

    1) Bail out those who fail, or

    2) Let them fail.

    If the US Auto industry had failed, I would have lost tens of thousands of dollars in investment. Instead, that investment was restructured, and I ended up with shares of the new GM that have done quite nicely. Moral of the story. Don't build resilient businesses. Run on the edge to chase maximum profit, and if things go bad, you'll get bailed out.

    Worked for GM and Chrysler. Worked for Wall Street. Let's do it again.

    A collapse would have been painful. Really painful. But we'd all be better off with a more responsible Corporate America in the end.

    IMO, bail outs are 'stupid'.
    Last edited by Wesley Mouch; August-13-19 at 09:15 AM. Reason: clarify closing sentence, by implying

  4. #29

    Default

    Quote Originally Posted by Wesley Mouch View Post
    The idea that businesses who aren't prepared for rainy days should be allowed to fail isn't 'stupid'.

    There is a reasonable argument that the moral hazard is created by our willingness to 'bail out' businesses who fail.

    We have two choices in how we structure our economic society.

    1) Bail out those who fail, or

    2) Let them fail.

    If the US Auto industry had failed, I would have lost tens of thousands of dollars in investment. Instead, that investment was restructured, and I ended up with shares of the new GM that have done quite nicely. Moral of the story. Don't build resilient businesses. Run on the edge to chase maximum profit, and if things go bad, you'll get bailed out.

    Worked for GM and Chrysler. Worked for Wall Street. Let's do it again.

    A collapse would have been painful. Really painful. But we'd all be better off with a more responsible Corporate America in the end.

    IMO, bail outs are 'stupid'.

    And, of course, as soon as they were out of the woods, things went back to the same old used to be.

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