Chillin' out till it needs to be funded
You heard it from us. Unless you ar one of the Reuters 3000 users as an employee of a big Financial Services company / Bank, you would be looking for this piece of news you had probably hoped for a month back, counted down for a week or so and till yesterday were wondering if it was to be or the Dollar had had its day.
Well, the verdict in the market as of now is that the QE2 was well priced in the markets and the Dollar bottomed out this week on Monday. Also with Treasuries on even keel, its now Euro’s turn to prove its not a mythical animal that lasted while the perfect storm was being screened. Ireland of course has agreed to accept aid in billions through its central Bank. GM, having already closed applications and priced its IPO at $33 is on the verge of completing the largest US IPO in with a chance to beat the AgBank of China and thus only behind the issuance by Petrobras(which isn’t counted as an ipo in the league tables) .
With a nicely timed set of moves that lasted a fortnight the IPO has shares on offer being added and the price being upped in two stages and gave a lot of people confidence that their investment in the US fed was safe as it no needs to sell its remaining 36.9% GM stake in common shares at just $43 per share to turn a profit on the entire transaction. Including the residual UAW stake, it is another 43% public stake that GM now has to worry about but that is another day and Citi and GM showcase that will UK might have come ahead by a week on recovery numbers the big uncle Sam is not to be challenged in its economic pre-eminence sooner than later.
All the other issues will last and will be dissected in this now the lagging phase of the recession with recovery going to be treacherous many more times, but the times they are a changing. The $50 bln Global Auto giant GM is sure a sign of that. GM stock valuations could easily be north of $50 in a few moments from here. ( GM reports 2/3rds of its profit frm North America and 1/3 already from Asia with another 1/43 lost in the sinking continent ..of Europe)