Skip to main content
Updated:
Original:

Next Stop: Zombie Company Lane

Let me see if I follow the chronology correctly here.
1. Bank of America pulls credit lines from Republic Window & Doors, presumably there are profitability reasons attached. Republic Window & Doors is in what might broadly be called the "real estate" market, even the "new construction market" which isn't exactly a massive cash cow at the moment.
2. Republic Window & Doors, seeking to avoid bankruptcy, lays off most of its employees. In doing so they run afoul of state rules requiring 60 days notice, etc.
3. Republic employees stage a sit in.
4. Illinois Governor Rod Blagojevich suggests to Illinois agencies that doing business with Bank of America is a bad idea, on the rationale that since B of A got bailout money, whats the harm in lending to the likes of Republic Window & Door?
So, the price of accepting bailout funds has become the wholesale replacement of traditional credit criteria with political influence criteria when making lending decisions.
I am reminded of Japan. Anyone else?
Given the state of Illinois finances, further, I wonder if Rod isn't doing B of A a favor.
Illinois Governor Suspends Business With Bank Of America [The Huffington Post]

Related

The Crown Lane Portfolio

Want to trade/make money like Steve Cohen? Consider buying the place next door.

Palm Beach County is the Next Great Hedge Fund Center

It's true, according to a county official, two hedge fund service providers based there and the New York Post.

Screen Shot 2018-03-06 at 5.17.05 PM

Rise And Fall Of The ‘Zombies’

Zombie, zo-om-bee...zom-bee-ee-ee!

Goldman Is America's Most Hated Company Because America Is Kind Of Dumb

Goldman Sachs is somehow more hated than BP and General Motors which, uh...WTF?