Street Speculator

To the new administration: General Motors (Symbol: GM) needs to re-organize through the bankruptcy process.

The U.S. Senate will vote tomorrow on a “Bailout Package” for the automotive industry. The SPECs do not think a bailout will have any effect on the financial problems associated with car manufacturers. NOTE: Former Senator, now President-Elect Obama just resigned from his Senate senate, removing any potential future blame if the bailout program doesn’t work. SMART MOVE Mr. President…

GM has over $40 billion in debt. They report a DROP in car sales each month. Their labor contracts with the UAW (United Auto Workers) is laughable. It was reported that each union member receives health coverage better than that of the Office of the President. Plus, financing for car purchases and lease transactions have virtually vanished.

No. A bailout without drastic cost-cutting measures agreed upon prior to release of funds would only delay a future calamity. Union members need to elect people whom negotiate on their behalf while having a business sense. No business, No paychecks!!! The GM labor situation was predicted to be the cause of the future downfall of the company 3 to 4 years ago. Now, here we are. The credit crisis has just heightened the labor picture and the financial problems of the auto industry.

If GM and other auto companies fail, fine. The reverberations will be felt immediately, but at least they will have time to constructively change their business model while removing current management and renegotiating labor contracts.

Also, it was just reported that the Obama campaign has raised $150 million in the month of September, another record.

The SPEC’s has just figured out the key to grow the U.S. economy. The U.S. needs to promote Engineering and Science disciplines to our students at a younger age. The promotion needs to be swift, focused, and calculated. And more important than anything else, the promoters need not be “failed lawyers” (We meant to say Politicians). Ironically, one of the SPEC’s happens to be an attorney!

What do they know anyhow. The last time we checked, and correct us if we are wrong, there are no former Medical Doctors, Engineers or Scientists (Any discipline in Engineering and Science)in either Congressional body. There are also no Economists either. Congressmen and women basically listen to whatever the lobbyists tell them, grab a microphone and disperse this information to the American public.

Get back to the fundamentals. Yes, the economy is not doing so well, BUT only in certain sectors (Financial, Retail, Automotive, and Airline industries). TECH, however, is booming.

Most U.S. based tech companies are investing billions of dollars into new Research & Development centers in Asian nations (Which nations also happen to graduate 60% more Science and Engineering degree disciplines than does the U.S.). These companies include Intel (Symbol: INTC), IBM (Symbol: IBM), Cisco Systems (Symbol: CSCO), GOOGLE (Symbol: GOOG) and Microsoft (Symbol: MSFT). When you get the opportunity, go to the website of these companies and look at the number of technical jobs they have available; positions they CANNOT fill because of a lack of qualified candidates.

The balance sheets of these companies are a dream come true to any active investor. Ignore the low stock prices. Stock prices always fluctuate. Plus, these companies would survive if their stock were trading at $1/share. Look at these balance sheet numbers:

Pharmaceutical/Medical Group:

Pfizer (Symbol: PFE)  $26 billion in cash

Johnson & Johnson (Symbol: JNJ)  $13 billion in cash

Merck & Co. (Symbol: MRK)  $9.9 billion in cash

Tech Companies:

eBay (Symbol: EBAY)  $4 billion in cash, NO DEBT

Google (Symbol: GOOG) $12 billion in cash, NO DEBT

Microsoft (Symbol: MSFT) $21 billion in cash, NO DEBT

Need we say more! Remember, these are not “DOT-COM” companies.

Not that it matters one bit but China will control more than our financial markets in the near future (The People’s Republic of China is one of the largest purchasers of U.S. Treasury Bonds). They have the power to also control a larger portion of the U.S. economy through innovation and production. With the high number of engineers, the number of U.S. patents from Chinese enterprises is sure to increase as well.

Conclusion: Science and Technology education needs to be taken seriously. The popular social networks and electronic products we all love were created by future SCIENTISTS and not solely Entrepreneurial minds.