An “Economic Analyst” Blog

One of the three big companies in the American auto industry files for Chapter 11 bankruptcy. It claims that a deal with Fiat has been reached and the company will be revived one way or another.

Chapter 11 bankruptcy does not mean that Chryler will be liquidated, but that it will be reorganized. Therefore, there are chances for the company to continue to exist.

Anyway, it looks like one of the big three admitted it is bankrupt. We are waiting for Ford and General Motors to do the same…

The Sun might shine over Oracle after it decided to acquire Sun Microsystems for 7.4 billion dollars after IBM decided not to buy this company.

Therefore, Oracle will now own the Java programming language and the Solaris operating system.

Oracle pays 9.50$ per share. The Friday close price for Sun was 6.69$. Today, Sun shares opened above 9 dollars. I wander who new about it?

The Pif Gadget magazine went bankrupt. A court decided this on January 15th.

It was a said day for French children and around the world.

But, maybe there is some hope. The weekly magazine Pif Gadget disappeared in 1993, but reappeared as a monthly magazine in 2004. Let’s hope it will be again reborn from its ashes!

Intel decided to close five of their manufacturing facilities in Asia (one in Philippines, two in Malaysia) and US (Santa Clara, Oregon).

Does this mean people no longer buy enough computers or is this move supposed to stop the drop in processor prices?

Either way, the crisis starts to affect the hardware industry.

It looks like the France government will help the troubled auto industry by giving Renault, Citroen and Peugeot a total of five or six billion euro.

So, the companies will have a little more money, but I do not think the real problem will be solved. When there are no customers, the companies cannot survive even if the state gives them money. OK, they do have customers, but their number decreases every month. And getting money from the state will allow the companies to cut prices, allowing more people to buy a new car.

But, most people are not interested in buying cars now. They just want to keep their jobs! If they have some money, they think it is better to save them for the time when they’ll lose the job instead of spending them on a car. If someone gets a loan to buy a car now, his or her IQ must be pretty low!

2008 Nobel price winner Paul Krugman claimed that the US auto industry will probably dissappear due to “geographical and economical dynamics”. In other words, soon enough, nobody will want to buy American cars. They need too much fuel, don’t they?

Under these circumstances, European and Asian car manufacturers might just survive… Or, maybe, less people will buy expensive cars and, over the next years, only cheap cars will be sold. Will we drive cars “made in China” in five years? Or maybe 2000$ cars “made in India”?