GM filed for bankruptcy and all of the publicly traded shares were liquidated, courtesy of the new temporary owners which included the “U.S. Treasury, the governments of Canada and Ontario, the UAW VEBA and Motors Liquidation Company.” ¹  Then, thanks to some savvy name changing, General Motors Corporation became Motors Liquidation Company and Motors Liquidation Company sold the “good” assets to the “new” GM named General Motors Company. 

It sounds confusing, but the separation was a way for GM to separate the bad assets from the good.  It has enabled General Motors Company to declare themselves free from bankruptcy.  After all, those bad assets are now the property of Motors Liquidation Company.  Still confused?  Imagine Bob getting arrested for a robbery.  Bob changes his name to Tom, and the newly named Tom says “I never robbed that bank.  Bob did.”  That’s it in a nutshell, and now Tom, I mean the new GM will likely be issuing new stock in the near future.  The only question is whether there are enough investors still willing to forgive and forget the financially crumbled past and jump back in.

Now that you’ve had a refresher course on the situation, you can weigh in with your opinion when Uncle Frank reminisces about the good ol’ days of the American auto industry.

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Read on:

GM.com – Investor Information

Freep.com – Wrong time for GM IPO? Not necessarily

SmartMoney.com – Who Is Going to Buy GM Stock?

Here’s the odd part: Fisher made sexual harassment allegations against Hurd, Hurd was found not guilty in regards to the harassment but was dismissed anyway thanks to some overall questionable ethics which included some fairly high unexplained expenses, several of which were paid directly to Fisher unbeknownst to the company. 

Then, Fisher denied having any kind of sexual relationship with Hurd and expressed sadness that he lost his job even though she was the one who got the ball rolling on the whole investigation.  Continuing the confusion, Fisher claimed that she already settled the harassment suit with Hurd privately ¹ which doesn’t make sense considering she brought up the harassment charge to the company in the first place.  It seems pretty obvious to me what happened, but Dinner Topics likes to give facts, not gossip, so let’s move on to the “WHOM” portion of Jodie Fisher.

Jodie Fisher is an actress who has appeared in a few movies you have never seen and probably never heard.  She is NOT Jodie Foster, the Oscar-winning actress from The Silence of the Lambs and dozens of other movies.  Fisher is 50 years old and made most of her imdb resume in the ’90s, starring in those soft-porn type movies you see on late night cable, such as Body of Influence 2.  Fisher also had a role in an episode of Silk Stalkings, which seems to be a prerequisite for all actresses in the early ’90s looking for that type of career.

Basically, without the H-P scandal, Fisher is someone you never would have known, but now you need to and at least you have another way to sneak in a Silk Stalkings reference in conversation today.

Read on:

imdb.com – Jodie Fisher

(image above taken from: http://www.whosdatedwho.com/celebrity/photos/jodie-fisher.htm)

Well, the European Union decided that there should be a gauge that measures how well a certain bank can withstand a recession. They decided that this stress test should solve the problem. They looked at each bank’s Tier 1 capital ratio, which is the ratio between that bank’s core capital (safe from any risks) and that bank’s riskier assets. This ratio does make sense; if a bank has more safe assets than risky assets, then that bank should be able to withstand a recession. However, skeptics dismiss the test, saying that the test was not as strict as it should be, letting banks that would otherwise fail slip through the cracks.

The results of the test show that out of the 91 banks that were tested, seven failed to be within the 6% Tier 1 capital ratio threshold. Five of the seven banks that failed were in Spain, one was in Germany, and one was in Greece. The German bank was a surprise because Germany is not in PIIGS (explained here). The Euro actually dropped against most currencies the day the results were released, July 23. Even if the tests were flawed, they did affect the world economy.

Read on:

Official results of the stress test (PDF)

Bloomberg – Euro Falls as Stress Test Results Fail to Alleviate Banking Risk Concern

Forbes – Euro Stressed Over Bank Tests

The Market Financial – Why the European Stress Test is Meaningless

Haibao, the Expo 2010 mascot

The Shanghai World Expo is in full gear right now, about halfway through its 184-day run.  Yes, you read that right – 184 days!  Ticket sales will likely exceed $1 billion USD, yet few Americans are probably even aware of its existence.  Here’s a quick education:

China put in the bid to host the 2010 World Expo in Nov 1999 and won the bid in Dec 2002.  Besides being the most expensive Expo in the history of world’s fairs (estimates vary, but it’s safe to say the costs range from $44-55 billion),¹ Shanghai also boasts the largest World’s Fair site to date (roughly 2 square miles).

192 countries (of 195 in the world, depending how you count) and 50 international organizations have confirmed their participation in the world expo that showcases the latest advances of architecture and engineering worldwide. Over 50 incumbent heads of state or government are scheduled to visit.

More facts:

• Duration: May 1 to Oct 31, 2010
• Where: On both banks of the Huangpu River in the city of Shanghai
• Theme: “Better City, Better Life” — to promote better living in future urban environments and sustainable living.
• Expected Visitors: 70+ million (which would make it the most visited in history) – 95% expected to come from within China
• Live shows: 20,000 scheduled
• Ticket price: 160 RMB / $24 USD

The purpose of expos has since evolved from its inception in 1851 to be more future oriented with themes focused on issues of humankind, intent on cross-cultural exchange of solutions. Technology and inventions remain an important aspect of Expos but are no longer the primary purpose.

Shanghai was a popular choice this time around because it is one of the largest ports in the world, the largest center of commerce and finance in mainland China, and considered the “next great world city” of the 21st Century.

Expos are linked to our past and future, and now that you know the biggest one ever is occurring right now, you’ll have something to share at the dinner table.

Read on:

Expo2010

Wikipedia – Expo 2010

CSMonitor.com – China’s Shanghai Expo 2010 – by the numbers

This time around, it’s not necessarily so.  When you hear that phrase next time, use this bit of recent data from the New York Times:

“More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent.”¹

With the lagging economy and difficulties selling or refinancing homes still fresh on everyone’s minds, it’s important to understand what it means to “walk away from” a mortgage (or a “voluntary default”).  Essentially, the homeowner is willing to sacrifice his credit rating because he views the option of stopping payment and letting the bank take over a house worth less than the mortgage balance to be better than struggling to make payments on a loan with a negative net value when compared to the backing asset.  It’s not that the rich don’t have any money; they are simply more equipped to handle a bad loan or two.  The banks certainly would much rather receive loan payments than reduced value housing, so walking away from a mortgage doesn’t do anyone any favors.  However, knowing that even the rich are stressing about money might make you feel a little better.

Read on:

NYTimes.com – Walk Away From Your Mortgage!

PowerLineBlog.com – Don’t Walk Away From Your Mortgage!

Just one of the REMs

So you’ve seen it in the headlines — the U.S. has uncovered an estimated $1 trillion worth of minerals in Afghanistan.  Besides iron and copper (largest mineral deposits discovered), there are deposits of niobium, a soft metal used in producing superconducting steel, lithium, gold, copper, and rare earth elements (REEs).¹

If your chemistry is as rusty as mine, here’s a brief run-down on REEs:
They are a family of 17 chemically similar metallic elements, including lanthanum, cerium, neodymium, europium and yttrium, used in nearly every electronic device² essential in building “green” technologies³ and necessary for military applications.⁴

That will satisfy some of you.  For readers looking for a little more detail on this subject, continue reading as we provide a rare (pun intended) in-depth explanation of a dinner topic.

Common abbreviations used when referring to rare earth materials:

• RE = rare earth
• REM = rare earth metals
• REE = rare earth elements
• REO = rare earth oxides
• LREE = light rare earth elements (La-Sm)
• HREE = heavy rare earth elements (Eu-Lu)

While REEs are relatively abundant in the earth’s crust, finding deposits significant enough to mine is less common. China has been the dominant provider (~95% of world’s supply) of rare earth materials since the 1990s by cornering the market with the sheer scale of their production. The extraction and refinement of rare earth metals can cost anywhere between $500 million to $1 billion per mine and separation plantaccording to Jim Hedrick, a former USGS rare earth specialist.

Due to increasing global demand and diminishing supply, China has been lowering its export quotas for rare-earth metals by about 6% annually since 2000 and are expected to completely ban the exportation of REEs by 2015.

Although China is the dominant provider, it has only ~54% of the world’s rare earth deposits. The U.S., Canada, and Australia have large known RE deposits and mining developments are underway in those countries.

Companies of note:

Molycorp Minerals LLC – Possessing one of the largest, richest RE mines in the world (Mountain Pass, CA), it was closed back in the late ’90s but is projected to re-open in 2011.
Avalon Rare Metals- 100%-owned Nechalacho Deposit (Thor Lake, Northwest Territories, Canada), these deposits contain the more valuable ‘heavy’ rare earths.
Lynas Corporation Limited- A concentration plant is scheduled for completion by the end of this year in Mt Weld, Western Australia.  A materials processing plant should start production in late 2011 in Kuantan, Malaysia.

Read on:
CBC.ca – Investors rush into rare earth element mining
Telegraph.co.uk – World faces hi-tech crunch as China eyes ban on rare metal exports
NaturalNews.com – Global supply of rare earth elements could be wiped out by 2012
MoneyTalks.net – An Impressive Rare Earth Discovery – in Canada
(image above taken from http://www.ctia.com.cn/TungstenNews/2009/14756.html)

Hayward

It’s a busy Thursday for acronyms in the news.  Let’s start with the important stuff you need to know and move on from there:

• BP CEO Tony Hayward is currently meeting with House Democrats to apologize for the spill and explain his future intentions.  For a fascinating explanation of one potential solution, check out this Gawker post about Kevin Costner (yes, I’m talking about the one and only Crash Davis) and his company’s machines built to separate oil from water in large quantities.  The practicality of applying them to a disaster this big may be a question, but it’s certainly a dinner topic worth mentioning.
• Game 7 of the NBA Finals airs tonight (9pm eastern), with the Boston Celtics and the Los Angeles Lakers playing one last game to determine this year’s champ.  It will be the first NBA Finals Game 7 since 1994 when the Rockets beat the Knicks (yes, the Knicks used to win games on occasion way back when).  With LA owning the home court advantage, expect Kobe Bryant to put on a show.
• Much of the Tiger Woods drama has died down, but the PGA is still in full swing as the U.S. Open started this morning.  Phil Mickelson has been the hottest golfer of late (winning the Masters recently for a third time) but “Lefty” has never won the U.S. Open before.  More notable: he’s been the runner-up a record FIVE times!
• 3D-TV is alive and well thanks to ESPN and the World Cup.  You still need glasses and a special television, but for those with thousands of dollars rotting away in a drawer, you can now watch plenty of non-scoring World Cup action in another dimension.