I don't know who first said or wrote that, but it is being proven true this week as the fools are lining up for the GM IPO. Amazingly, the offering appears oversubscribed and they are raising the price targets and share offerings.
The sheer lunacy of any buyer is certain from the following:
1. The company has roughly zero free cash flow net of unfunded pension & healthcare obligations.
2. The company is controlled by its labor unions.
3. The company looted billions from its bondholders and gave the labor unions a free pass on restructuring costs.
4. The company broke contracts with dealers who had provided good service for its customers for many decades.
5. The company broke a implicit bond with customers by cutting entire product lines and dealer networks, thus orphaning prior buyers with no places to get service.
6. The company's snout in the government trough has antagonized millions of potential buyers of its products - "Government Motors".
Having lied and broken promises made in the past, why or why would ANYONE believe them now? I guess the greed factor in the world capital markets is rising much faster than I felt was occurring.
Oh well, a new top might be a few years away. These trends can go on awhile before grinding out. It took the tech bubble about four years after Greenspan's "irrational exuberance" speech to blow up.
Bunkerman's little birdie is chirping. He will be more caution now about being heavy in equities over recent highs.
Word of the Day
"Defalcation" - noun [$10]
Defalcation means an act or event of the misuse of funds; embezzle.
Sentence: The gross defalcation that occurred in the GM bankruptcy case should give great pause to anyone rational who considers investing in such a company ever again.