Friday the 13th: The Shoes are Starting to Drop

Yesterday Charter declared bankruptcy, Chapter 11, and down went $3 billion of their debt. That means that $23 billion of their total liabilities are also most likely gone. Sirius is on the edge and on Tuesday next week they may likely fall flat on their fact as well. We detailed this several months ago as the next set of shoes to drop. We have counted 110 companies averaging $5 billion each in potential default, and reaching almost a total of $1 trillion in high yield default, not to mention the dumping of the equity holders.

We also have said we do not see the end of this mess until the end of 2010. with unemployment exceeding 10.5%. The passing today of the Stimulus Bill may moist likely have little if any effect. It wastes money and does not address the true problem. Christina Romer presented the Obama response to the Stimulus passage and the presentation was like a 5th Grade teacher telling her class about the joys of Tetanus shots, how wonderful they will be not that they may hurt like hell! Between the mercurial and High School debater in Geithner and the happy faced Romer, one is left with a very hollow feeling that we may be getting into real trouble. Where is Larry Summer when we really need him.