US begins GM bankruptcy planning

General Motors and the US Treasury have improved the offer to GM's bondholders, as they prepare for the firm's move into bankruptcy protection.

The U.S. Treasury, which already has loaned GM $19.4 billion, would get 72.5 percent of the new company's stock and provide $30 billion in additional financing to keep the new GM operating under bankruptcy protection. Canada's government is expected to provide an additional $9 billion, a senior Obama administration official said.

Bondholders with $27bn of GM debt are now being offered the option to buy an extra 15% of GM shares as part of a proposed bankruptcy deal. The bondholders would get 10 per cent of the common equity of "New GM" and warrants that give them the right to purchase another 15 per cent of the reorganised firm, according to the filing. If bondholders back the new offer, it will allow GM to exit bankruptcy protection more quickly. The US car giant is expected to apply for bankruptcy protection by 1 June.

German Foreign Minister Frank-Walter Steinmeier said he had received assurances from US Secretary of State Hillary Clinton that the US government would increase its support to help secure the sale of Opel, GM's main European business, which has its headquarters in Germany.

Dow -2% with General Motor -20%

Asian stocks are set to dip on Thursday, as hopes for an economic recovery faltered on the prospect of a rise in the cost of U.S. debt. The main U.S. indexes fell by up to 2.1 percent, with shares in troubled automaker General Motor Corp falling 20 percent after a crucial bond exchange proposal failed, taking the company closer to bankruptcy. U.S. Treasury bond prices fell, as investors were concerned about the huge debt that will be needed to fund the record $1.75 trillion budget deficit would cramp the economy''s ability to recover from the recession.

Genting SP ($0.71) - Fell sharply yesterday after Major Shareholder placed out 853mln shares at $0.72 per share on 27 May.

GoldAgri ($0.425) - Fell after it announced a 17 for 100 Rights to raise up to 300mln.

Today, STI index closes up 3% at 2306 (+67 points). Is the market is going to hold up comfortably above 2300. Could this be a sucker rally in the making? I think every market participant should take a step back and ponder on this issue seriously.

Biggest monthly jump in consumer confidence

U.S. stocks climbed more than 2% on Tuesday as data showing the biggest monthly jump in consumer confidence in six years lifted hopes of an economic rebound. Apple's shares closed nearly 7% higher and helped the NASDAQ higher after a broker said the iPhone will drive strong earnings growth over the next two years and raised its price target on the stock.

An index of U.S. consumer confidence surged in May, strongly topping expectations as it registered the biggest monthly jump since April 2003, according to the Conference Board, an industry group. The index jumped to 54.9 in May from a revised 40.8 in April.

Oil hit a fresh six-month high on Tuesday, bolstered by U.S. consumer confidence data and comments from OPEC kingpin Saudi Arabia that prices may continue to rise. Saudi Arabian Oil Minister Ali al-Naimi told the press ahead of Thursday's OPEC meeting he hoped oil prices would hit $75 a barrel between the third and fourth quarters of this year. U.S. crude oil rose 78cents to settle at $62.45 a barrel.

General Motors Corp has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy within days.

China stuck in dollar trap

"China stuck in dollar trap," says the headline on the front page of the Financial Times. The FT says China is buying more U.S. bonds than ever. It must...according to the news report...because it has too many. Unless it supports the dollar, it risks a big collapse in the value of its foreign exchange holdings (mostly in dollars).

For now, the United States has to sell trillions more in bonds to finance its imperial ambitions, bailouts and boondoggles. The Fed will have to buy them...along with the Chinese. If stocks fall - as we expect - they are likely to be joined by many other buyers too - all seeking safe haven in the world's leading credit.

Treasury bond prices aren't the only U.S. assets plunging. The U.S. dollar is also plunging against major world currencies. It has just fallen below 6-month lows. It's almost certainly going to fall further.Gold has surged dramatically, coming within striking distance of the $1,000 level ? and beyond.

US stocks finished lower Friday after a late selloff erased the day's gains

Bank of America Corp. and American Express Co. slumped at least 3 percent as the government prepared to raise $162 billion by selling securities next week. Investors including Pacific Investment Management Co.'s Bill Gross have said the U.S. will lose its AAA credit rating. Salesforce.com Inc. dropped 8.8 percent after its sales forecast missed analysts' estimates.

Sears Holdings Corp. jumped 10 percent, limiting the market's decline, after the department store posted an unexpected profit. McDonald's Corp. advanced 2.5 percent, also fueling a rally by consumer companies, after analysts said that profit margins in Europe are improving.

Singapore stocks closed 1.55 per cent higher Friday after bargain-hunting reversed earlier losses. The blue chip Straits Times Index (STI) gained 34.30 points to 2,245.27 with gainers leading losers 284 to 198. Banking shares closed higher, with DBS gaining 20 cents to $11.80, OCBC inching up eight cents to $7.18 and UOB climbing 24 cents to $14.32.

Keppel Corp said on Sunday a wholly-owned unit had sold its entire stake (45.5%) in Singapore Petroleum Company (SPC) to PetroChina for S$1.47 billion ($1.02 billion) or $6.25 per share.

GM borrowed additional $4b, and $30b more soon?

General Motors could be on the verge of receiving another $30 billion in federal loans - or twice the amount it received when it was bailed out by the administration of President George W. Bush last year.

Obama said in an interview broadcast Saturday on C-SPAN that the beleaguered automakers should aim to have product lines that appeal to consumers -- and that means fuel efficient and high-performance vehicles that Americans hunger for.

GM borrowed an additional $4 billion from the government Friday on top of $15.4 billion it previously received. The administration has demanded that the restructuring include cutting labor costs, reducing debt, shedding dealerships and brands, and closing excess factories.