What We Could See Soon

We have seen history unfold right before our eyes over the past 12 months. We have witnessed companies that have been operating for over 150 years either get bailed out or file for bankruptcy protection. We have seen absolutely huge companies get billions of dollars from the U.S. government only to be back at the front door knocking just a few weeks later. We have seen massive layoff, closures, and cut backs from just about every company in every industry.

Financial institutions are now converting themselves to bank holding company's just to get access to Federal Aid in order to stay afloat. States are having real issues making payroll moving forward because they cannot sell state debt to fund their projects. Guess what.....this morning there was another huge announcement that is going relatively unnoticed. GMAC the auto and consumer lending company failed to meet the capital requirements to become a bank holding company. Per regulations they need $30 billion in capital to complete the transition however, less than 25% of the GMAC existing debt has been tendered to raise the capital required. It is projected that in order to meet this requirement they must have a commitment of about 75% participation in order to meet this requirement. Could we see another failed financial institution?

I recently spoke to a close friend of mine who exited the industry about a year ago and the news that he told me is shocking. Just yesterday his company (industrial) let go over 180 employees one of which had a tenure of over 35 years. He was very nervous about his own job and for the first time in his life was scared. No industry or profession is safe! Hospitals are laying people off because the economic crisis has people putting off health issues to save cash. Professional sports are reeling because they are scared fan support will be significantly decreased because of the economic times. Let's get this mess behind us and move forward being better people, parents, friends and professionals!

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