On the rocks. Shares selling for a dollar. Many govt (read that military) contracts. The govt stepped in and bailed them out. The share price went to over $80 in a year or so.
I see three things happening soon.
First, there is gong to be an adjustment to GAAP rules so that Fannie and Freddie don't go the way of the subprimes. Home values are simply not going to crash to a few pennies on a dollar. The govt will change GAAP to more accurately value portfolios.
Secondly, I see a bailout of GM for the same reasons they bailed out Chrysler.
Lastly, with $4 trillion (or more now) under management, the hedge funds simply have too big an influence on the world's economy. With that much money, they have to go after entire economies and not just sectors. Their shenanigans with naked shorting in the bond markets have stepped over the line. Can you guess what the recent G summit was all about? I would be willing bo bet money that hedge funds are going to be regulated out of business worldwide.
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