On the first Monday in June, 2009

GM will file a petition for voluntary bankrupcty. A 100 year-old firm that was for decades the largest corporation by sales in the world bites the dust. Why? Management stupidity and union greed. The industry and product did NOT evolve away. New products did NOT replace the need for automobiles. Very large automotive manufacturers DO exist today. This is simply a matter of human failures at GM. People and their decisions do matter. Tolstoy was wrong.

More strange news coming out ...

FT: China’s manufacturing sector continued to expand for the third straight month in May, according to the country’s official purchasing managers’ index, a sign that the government’s stimulus package is starting to have an impact and that the recovery is likely to broaden. The China Federation of Logistics and Purchasing on Monday said the index pulled back slightly to 53.1 in May from 53.3 a month earlier. A reading above 50 signals an expansion while one below the threshold reflects a contraction.

Well, well, communist leaders in China seems to know how to do an economic stimulus program better than Americans. Remarkable.

Or maybe there is something to decoupling. I think there is. It’s not a perfect decoupling. Who ever said it would be perfect (other than big mouth pundits on Toshvision)?

WSJ: GM to file for bankruptcy today after a majority of bondholders voted to accept a revised offer. Obversely, Chrysler might come out of bankruptcy today as a unit of Fiat.

Futures are up big this morning. Copper prices are up. The German DAX is up over 3%. I wonder if the GM BK and its not being the train wreck that pundits forecast and bears were salivating over signal a capitulation of a large group of bears ?

Snidely Whiplash was a character in the old Dudley Doright cartoons that were part of the Rocky & Bullwinkle TV show that I watched with joy as a boy. He was a caricature of evil and bad behavior. The modern Snidely Whiplash seems to be banks. The WSJ has an article how they violate the spirit if not the letter of the law by grabbing social security and disability benefits to pay fees on garnished bank accounts. This populist libertarian is sick of banks and their rapacious efforts for make more and more money from simple products.

Only so much money can be made from services such as checking accounts and credit cards. Banks simply should accept that and cease these endless piranha bites. For example, after using my Bank of America Visa card in London, I received a notice that in the future, Bank of America will charge 4% [sic] for foreign currency transactions. How ridiculously greedy! What will I do? Easy, use a different credit card. To me, anything over 2% is simply robbery. After all, the banks are already getting some interchange fees on the transactions and the foreign currency conversions done in bulk cost them next to nothing.

Capital One is reported to charge nothing extra for foreign currency transactions. I now plan to obtain one of their credit cards for the future.

Further in the saving bits of money department, I see from an ad in Barron’s and checking it out, that Ameritrade is now robbing me on the cost of margin loans. I suppose this goes back to the Lehman debacle. From memory, they were once fair. They are now charging over 8% while the broker call rate in Barron’s is 2%. I’ll call them today to let them know that I’ll be changing accounts to Interactive Brokers over this matter. IB charges about 2%, and the commissions are lower, too.

Actions

My Krypto Fund asset allocation model commands me to sell some emerging markets funds and buy REIT funds. As an intraday trading tactic, this morning early I'll let some VWO go, but will wait for a late-morning or midday pullback to buy the VNQ. This has worked well recently.

Word of the Day

"Panoptic" - adjective [$10]
Panoptic means showing or seeing the whole at one view.
Sentence: If any government official has panoptic vision over the economy, he is Battleship Ben.

Le Mot du Jour

"Faillite" - noun, feminine
Faillite means bankruptcy (d'entreprise); collapse, failure (d'espoir, méthod).
La Phrase: GM déclarera en faillite aujourd'hui.
Sentence: GM will declare bankruptcy today.