After Lehman, who do YOU think is next?

September 23, 2008

lehman1.jpg“Bankruptcies, they fall out of the sky, as we’ve all seen in the last two or three weeks,” Rob McMahon, managing director for restructuring at GE corporate lending, told the Reuters Restructuring Summit in New York this week.
    
The credit crunch has triggered Lehman’s bankruptcy and the $85 billion U.S. government rescue of American International Group.
    
At the Reuters Restructuring Summit, journalists at Reuters offices in New York and London are talking to bankruptcy industry insiders about who will be the next to fall.
    
What do YOU think is the next sector, or company, at risk for going bankrupt, and why?

46 comments

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It will be USA who will become bankrupt. Their increasingly large debt indicates that they are insolvent.

Posted by peter | Report as abusive

GS & MS might be the next ones as they have a high leverage. The change to bank holding could not reduce their leverage unless the FED will give them hundreds of billions of dollar as a free gift. Buying their asset at discount rate, for example 20 cent at one dollar, might push them to go bankrupt more quickly than they want. Book Value is still a a big black hole these two companies don’t want anyone else to disclose. The fairy story about the New Clothes of the King is here again. Who is the girl telling the people that there is no clothes with the king? Sooner or later.

Posted by RW | Report as abusive

After Lehman, it is JP morgan, Citi, goldman..

srinath parankusam

Posted by sparankusam | Report as abusive

Not to pick on him specifically, but somebody like Trump – leveraged to the eyeballs, relying on artificial valuations based largely on reputation and gloss. He’s one project away from being wiped out, and even his casinos can’t cover their own costs any more.

The whole RE industry is the next house of cards. Hugely overvalued buildings purchased on handshake deals. By 2010 Manhattan’s commercial real estate market is expected to be 10% vacant. Suddenly we have a subprime commercial real estate market – REITs owing more on a building than it’s worth, and rents no longer keeping up with costs.

Posted by Doug | Report as abusive

Sep. 30th is going to be the FYE for the United States. Let’s see how much debts the US will carry after the bailout to Fannie&Freddy, AIG etc.

Posted by John | Report as abusive

Goldman sachs

Posted by Giovanni | Report as abusive

America is going down the drain – thanks to Bush’s and Cheney’s administration in the last 8 years. Can anyone just name ONE (I don’t need two or three), only one, good thing that this administration has done for our country in the last 8 years? I guess when people get hit hard in their pocket books, they are not jumping on the bandwagon of “Spreading democracy around the world” anymore. Terrorism actually starts right here at home with inept leaders and greedy CEOs, and people with negative IQs that would still vote for them.

Posted by dee | Report as abusive

Well the dot coms are over, the hedge funds died(they could’t even think of 7 or 11) Only the banks have a few rotten apples to fall, if they don’t go along with the bail out. The bubbles have all exploded!!! Lets look at energy dependante sectors Transportation (maybe, How about the cost of shipping added to manufactring overseas and we can send them our problems, while solving our unemployment!!!

Posted by Joe G | Report as abusive

What do you think about HSBC? Do you the bank is strong enough to survive? And what about its operation in others countries?

Posted by Marcos | Report as abusive

I think you will see a lot of problems in China, because company’s invested in stocks of othter stocklisten company’s (good foor more than 20% of there profit a year ago, but the market dropped bij 60%) en real estate (in the leading city’s prices already dropped by 10 for the better objects en bij 40% for the worse objects).

With the $700 bln bail out plan, I guess the feds for now have averted a major line up for chapter 11 & 7, however it needs to be seen how soon & smoothly will GS & MS morph into commercial banks !!

On another thought US Gov itself has huge deficits … any idea from where its going to source the entire bail out plan?

http://vikramsjourney.blogspot.com/

The next ones to go broke. are the “Other 95%” of the population. Inflation will eat us alive..and the fee folks whom got theirs will head south to their island for what will be a very cold winter for rest of us.. and congress will then get a bigger “automatic and adjusted pay raise”. Sorry but the big boys whom live off the fees, never go broke… that is the real world of usa now days. get used to it.

Posted by frank | Report as abusive

I think US will contain its financial problem by infusing more funds and is paying the price of unproductive expenses incurred in Iraq and destruction of crude oil production because of UN sanction. This financial problem will float to Europe and then to Japan and China.

Posted by rajay kumar aggarwal | Report as abusive

I think the US just needs to learn the lessons from what they had been telling/preaching the world: stop subsidizing, letting the market clean up the mess they created… Good luck. Americans just benefit or learn from what the great president other countries/peoples to do! They voted for 8 years the greatest gangsters so now Americans just live with it. Hope the coming president will be different??!!

Posted by Dam Quang Thuan | Report as abusive

may be GM. how long it could lose the market?

Posted by Raf | Report as abusive

America was champion of Economy liberalisation and was telling to world that market orinted policies practices free, fair and perfect policies. The greedyness of investment banks has revealed that how they were fair. The bankruptcy of Lehman Brothers is the sample of perfect financial market of America.

Posted by rajay agarwal | Report as abusive

with the loosing of manufacturing and agricultural sectors in western countries since 15 years, banks could not stand up alone, they could not carry their typical business (credit to corporations) as such they looked for other possibilities of profit in other areas, and failed.
I foresee a delisting of good corporations from major exchanges, not only in the US. What happened damaged not only the savings of ordinary people but, mostly, the reliability of financial markets. People will not trust any more CEO ,CFO and regulators. Too many false balance sheets. Exchanges will remain for forex, commodities and bonds. Stocks as we know will not exist any more.

Posted by riccardo scaglia | Report as abusive

It’s the Fall of Rome.
I heard the Amish are still doing ok. :)

Posted by Mark | Report as abusive

The line forms to the rear; I’m next!

Posted by Jim | Report as abusive

Follow the cookie trail…. Currently our biggest current struggle is the realestate market. Banks lending the money are also on borrowed money… think about that one. If a person who could never afford a home suddenly does…. and then can no longer afford to pay for it… the loan still needs to ulitmately be paid and you cant squeeze blood from a turnip. Shark lenders… The ‘big names’ who appeared from no where, who played a big part of this false hope(selling dreams)Wachovia, Option One.. just to name a couple… manipulated our economy. Do the research… Other sectors are failing because people are pulling from thier secure resources trying to stay a float..while the economy suffers to cover the banks mistakes. To bail out these banks would be irresponsible of our government. They made thier beds… so let them lay. Let them fail for they are root cause for so many American Peoples Misguided Dreams. A bandaid does not heal the wound. People.. It’s not rocket science…I learned in High School our market was designed to be based on supply and demand. Does anyone agree we are not short on homes. The economy is close to settling… My guess is…. keep your eyes on the banks who appeared at the beginning of the rise in the market…

Posted by Jay Jay | Report as abusive

Merril Lynch will be the next, after the shareholders reject proposal from their BOD

Posted by abs | Report as abusive

The next company to go bankrupt or merged will be WAMU. Washington Mutual has no where to go but off the books.

Posted by Sam Brown | Report as abusive

In response to dee’s comment, the current administration was instrumental in containing the spread of terrorism and yes that was not cheap but it was and is worth it. I can’t imagine what the world would’ve looked like if it wasn’t for Bush and Cheney.

WaMu cold be next.

Posted by Adam | Report as abusive

Well, everybody forgot the airlines…some of them will be next.

Posted by Dominik | Report as abusive

GMAC-ResCap

Posted by Lah | Report as abusive

What does everybody think of National City (NCC) Although they did raise 7 billion in capital the bad mortgages have really hit the company.

Posted by zonyun | Report as abusive

LET’S ALL SING THE
THE THEME FROM “LOONEY TUNES CARTOONS”
IT’S CALLED: *** the merry go round broke down ***

the american car/truck manufacturers. They are losing money hand over fist and need to borrow huge amounts to retool and develop new cars that people actually want to buy. Meanwhile the european and far eastern car makers have just the economical cars that American consumers are deciding are sensible purchases. Just look how hard it was to find a buyer for that ridiculous Humvee brand. I’m afraid that the view from the rest of the world is that the Americans have expected a wasteful and expensive standard of living for too long. Why should they use more than their fair share of the limited world resources- its time they learnt to use frugal cars like the rest of us. Trouble is they don;t make them….

Posted by jon heatley | Report as abusive

basically financial institution is on the brink right now. Money is tight nowadays and with the inflation and the price of oil going up consumers would rather spend their money on the basic than pay-off debt…

Posted by Jinna Socrates | Report as abusive

..I suggest reconsidering the nature of stock exchanges and their role in the economy..

Posted by Jad H | Report as abusive

10% office vacancy is very good. The long term historical average nationally is for office vacancy is about 12%. 10% office vacancy in Manhattan will not have any material impact on real estate values.

Posted by Quaddy | Report as abusive

It will be the American taxpayer. We are the ones that bought into a system of the land of the free that turns out to be enslaved by debt and politicians who were elected as servants that became feeders of greed.

Posted by markmckitrick | Report as abusive

GM or Ford

Posted by Jim | Report as abusive

Leon Black’s Realogy will go soon. Huge debt, terrible markets. Moody’s already downgraded to junk. Paying debt with debt. Bonds trading below $0.65 on the dollar. Cash running out.

Turn off the oven, they’re done.

Posted by apollo | Report as abusive

Me!

Posted by tom | Report as abusive

Actually, Goldman Sachs just got a HUGE investment BOOST from Warren Buffet for $5 billion today, and their stock increased pretty well. Also, Goldman is shedding it’s investment bank model and becoming a bank holding co, so it can collect deposits. so Goldman is doing fairly-well at this point.

Posted by Marcus Jay | Report as abusive

Hi,

I think the next goldman sachs and citi

regards

Posted by Christian Martinez | Report as abusive

All country will have a better look at US debts . Are they going to fund the debts to lend to Uncle SAM or ask Uncle same to declare Chapter 11 . ?? or asking to pay 1st borrow later when u clear your debts.

Posted by visvisvis | Report as abusive

SHLD, COF, JCP, GM, UAUA.. take your pick!

Posted by steve | Report as abusive

NEWS FLASH – Phony mortgage applications accepted by phony lenders backed by phony politicians (to buy votes) for the last 20 years has caused the mess. The mess is contained to the financial sector. The NEWS FLASH? There is a record $620 Billion sitting in non-financial company treasuries right now, ready, willing and able to invest. Oh – the government has NO money folks, it only has the ability to tax your butt off and give the money to the phony home owners, the phony lenders and the phony politicians. Let the whole mess collapse.

Posted by speakup | Report as abusive

A right bunch of idiots Americans must be to tolerate this kind of nonsense. Where is the tar and feathering? Where is the tea in the harbor? Citizens?

This is what happens when the USA has good money chasing after non-value creating and non-economic propelling causes like financing the war with Iraq. If the many billions $ were used to generate businesses and the domestic job market the sub-prime crisis could have been everted. After property & finance I foresee the airlines and leisure industries (including gaming) facing the music soon.

Posted by B. Suresh Kumar | Report as abusive

I think the next to go is the US. If it does not go all by itself, than all the other economies should push US alongwith Uncle bush down

Posted by MDT | Report as abusive

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
3rd president of US (1743 – 1826)

Posted by Marcus | Report as abusive

I wouldn’t be too surprised if General Motors go under.

Vehicle sales are on the decline since oil charged to $147 per barrel but now that oil has retreated, the economy is headed for a recession.

Even if they cut costs, they still need to raise capital to tide through this tough period.

http://jeflin.net

Nobody is to big to fail.
The Soviet Union fell very quickly.
The US will fall as well. It is just a matter of time.
Asia is RISING.

Posted by Emile | Report as abusive