“Substantial doubt,” say auditors at Deloitte & Touche. They’ve been studying GMs figures. The numbers make them wonder whether the automaker can continue as a “going concern.”
The world is full of car factories. Most of them can make cars better, faster, and cheaper than GM. Meanwhile, demand for autos is not growing as quickly as the global growth in auto-making capacity – especially in America.Let the Mr. Market do that!
But GM has friends in high places…ready to lean on the scales of Mr. Market’s justice. The automaker has already borrowed $13.4 billion. It is asking for another $30 billion. But what kind of a dope would lend $30 billion to a company whose own auditors say they’re worried that it might go out of business?
Then again, who would lend money to AIG four times in a row…after discovering each time that the company was in worse shape than before?
If you guessed anything but ‘the US government,’ you are not paying attention.
The rest of the world’s lenders are idiots too – but of a different sort.
Allow us to simplify the world’s credit markets circa 2009: the world’s lenders are eager to make loans to the world’s biggest debtor; they don’t trust anyone else. The world’s biggest debtor, meanwhile, lends to the people private lenders don’t trust – the borrowers who can’t pay the money back.
