Battle of Bankruptcies???

Battle of Bankruptcies???

General Motors (GM) VS Lehman Brothers (LB)

If we analyze corporate bankruptcies occurred in U.S, we could found a huge differences in-terms of market reaction. Lehman Brothers bankruptcy last year had caused the market slump to all-time lows around the globe.

However, General Motors story didn't have any impact on the market either. Instead, market gone up "crazily". In fact, GM's demise had broken the U.S history -- largest corporate failure.

Why such differences? Let's have a look:

1. Expectation. LB caught everyone surprise when U.S government didn't lend a hand to rescue it, although LB is much more popular than Fannie & Freddie. In contrast, GM should have closed down long time ago, if not because of U.S government stubbornness to revive the company. Finally, "Paper cannot used to cover Fire". GM's case is expected.
2. Factor. Before GM announcing the final decision on whether it will survive or demise, market had actually factoring the possible worst outcome ways before GM's due date.
3. Relief. Market's arrow points to the sky instead of ground, because of the credibility of U.S government measures to revive the economy. Sometimes, facing the truth is the best solution for moving ahead. Peoples are relief that, after so many months of speculating, GM finally closed down.

What should I said further?

Good Luck...