Monday, February 23, 2009

Something "Real" to Worry About

Things like this really bother me, and I am not cultured nor educated enough to know any of this for certain.

A friend of mine has told me this story of a stock that he owns. They have announced that they intend to file a Chapter 11 restructuring bankruptcy. They intend to declare all stock has zero value, eliminate all current stock and reissue new stock to the bondholders, but not to the current owners of common stock. If I have this right, the people who own common stock will just be SOL and that all of this is... somehow... legal.

If all of this is true, then why would an individual hold any stock at all. If the corporation can do this, you would just be laying your cash out there and waiting for disaster.

On top of all that, we have a "major" news outlet writing stuff like this: 5 Star Stocks Begging to be Bought - never mind that half of the world expects Arcelor Mittal to declare bankruptcy any day now with part of its mills temporarily shuttered and the ones that are running being operated at well below break even capacity.

And somehow, we are all supposed to confidently go forth and stimulate the economy with our $13 a week that we ought to start seeing later this year. I'll give you a real stimulus, my Federal tax has already decreased $11 every two weeks, but I think this is due to the pay cuts that have been taken. Oh yeah, and my state tax has increased $12 every two weeks, not real sure about that one... So, I am still net -$1.

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