Here Comes the Bomb - GM to file for bankruptcy on June 1st

We all knew this was coming, but now it's official, GM to file for bankruptcy on June 1st.

General Motors Corp., the world’s largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said.

The U.S. Treasury will provide financing for GM while the asset sale is arranged to a company formed by the government, according to a regulatory filing today. June 1 was the deadline set by the U.S. for GM to restructure outside court.

GM, which would follow Chrysler LLC into bankruptcy, plans to build a new business around assets such as the Cadillac and Chevrolet brands. The 100-year-old automaker, a victim of tumbling sales, fell short in a bid to cut debt by $44 billion by June 1.

What is new is this idea that GM will sell most of it's assets to a new company. Does that imply liquidation or some sort of bizarre loophole for complex restructuring?

Note that GM had credit default swaps protecting it's bonds:

Credit-default swaps protecting the automaker’s bonds for five years fell 1 percentage point to 89 percent upfront, according to broker Phoenix Partners Group. That’s in addition to 5 percent a year, meaning it would cost $8.9 million initially and $500,000 annually to protect $10 million of debt.

Bloomberg is reporting this is the 3rd largest bankruptcy in U.S. history.

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The message

The message to the bondholders and creditors may be fuzzy - but the message to the labor union is loud and clear, unfortunately.

Will Someone Count The Cost, Kindly?

So how much have we had to pay to keep this horror-show afloat since the taxpayer shaft began on this one last year, how many billions is it? I've never been one to have had very much sympathy for any of the major players here, company, UAW, investors, you name it. Every bit as much as Lehmann, they and all of the bailed-out banks should have been allowed to have gone under with the tide when it began to swell. The bulldickey proferred concerning the alleged essentially of these organizations to the economy was always quite that: Bulldickey. All we managed to achieve in the process of making these give-aways was to convert our economy into a replica of Schacht's National Socialism, a corporative state. But who's surprised at that? We launch unprovoked wars, tap phone lines and torture suspected "enemies" routinely, why not turn GM and Chrysler into something resembling an IG Farben or a Krupps?

Every time I think of the abuse to justice involved when the utilitarian morality of the political system is trotted-out to justify or to lend a certain patina to these outrages, my stomach turns. What effort has been made by these paramecia in the direction of the truly little guy, the unemployed, outsourced worker, the underwater homeowner? Absolutely none! Please spare me the neurotic self-preservation of a Barney Frank, the vacuous narsicism of a Nancy Pelosi or the disingenuous promise making of a liar like Barak Obama. The citizens of this nation shouldn't rest until each and every one of these reptiles is behind barbed wire in a concentration camp awaiting public trial.