Stocks advanced Monday as investors were encouraged by economic reports out of China and the U.S., and shrugged off the General Motors bankruptcy filing. Read and listen to what the experts had to say...
Debt Situation to Intensify
Daniel Mitchell of the CATO Institute said Presidents G.W. Bush and Obama have squandered tax dollars on “failed programs.”He said the U.S. debt situation is going to be worse than before, and that bailouts and other programs have hurt the future of the country.
China Will Still Buy U.S. Treasurys
As long as the U.S. consumer comes out of hiding, we’ll see more Chinese goods sold through Wal-Mart and other big box stores, said David Gilmore of Foreign Exchange Analytics. "China’s going to still have dollars and they’ll have to buy U.S. Treasurys," he said.
Frits van Paasschen of Starwood Hotels and Resorts said although hotel occupancy rates have been stabilizing over the past few months, rates are still under pressure. He predicted another tough year for the hotel industry and that the company is promoting more to cope with the decline.
Car Demand Still High
Mike Jackson, CEO of AutoNation said there is still more demand and traffic in car showroomstoday than available credit. “I’m not advocating the return to loose, easy credit, but there needs to be a normalization of credit,” he said.
GM Dealership Strong Despite Bankruptcy
Bill O’Flanagan of Reedman-Toll Auto World, the largest GM dealership in the Philadelphia area, said GM’s bankruptcy hasn’t affected the store’s sales yet. “Customers want the car as opposed to the company,” he said. As gas prices have fallen over the past year, consumers are interested in mid-sized cars, SUVs and trucks, he said.
‘GM Must Emerge ASAP’
Erik Lie, professor at University of Iowa’s Business School said his study showed that companies that enter bankruptcy emerge too soon and have too much debt. But in GM’s case, he said it is important for them to emerge as soon as possible.
GM Will Reemerge in 60-90 Days
GM needs to convince the younger generation to start buying their products, said Rebecca Lindland at HIS Global Insight. She said she expects GM to reemerge in 60 to 90 days after the bankruptcy, if everything goes according to plan.
Bankruptcy Was Avoidable
Former presidential candidate Ralph Nader said the GM bankruptcy was avoidable. “This was pushed by a secret task force, appointed by Obama, made up by Wall Streeters who don’t know the economic impact of the auto industry,” he said.
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