American Airlines quietly goes bankrupt.

The latest victim to succumb to the global debt Ponzi is AMR corporation which is the parent company of American Airlines.  AMR filed for bankruptcy today.  Of course it eventually had to; how could it not?  When its competitors are allowed to wipe away their debts in their own bankruptcies over the past few years and then continue flying, what chance does honesty have?  More to the point, what chance did AMR or any other airline have against competition which was taking on massive debt in the early days in order to grow quickly?  And so therein lies the scam of it all.

Damned if you do and damned if you don't.  Any airline that failed to take on massive debt would be hard pressed to survive back in the salad days of air transportation.  The best aircraft and the best pricing went to those who were considered the strongest customers.  And now, any airline with all that massive debt is destined to go bankrupt as deflation makes it impossible to turn a profit.  Airlines can't raise rates because people can't afford them.  People have come to think of the airlines as a form of public, government sponsored transportation.  Airlines must use the best equipment, maintain it perfectly and run with incredible efficiency day in and day out or people who are paying $200 to fly from LAX to MIA have a kinipshin and demand government "do something".  I wouldn't work in the airline industry on a bet.  It's just too government-infested.  Investors in these types of government backed ventures are eventually taken to the cleaners.

By the way, don't let the shape of that AMR chart escape your attention.  That is the face of an exponential collapse.  The company has actually been insolvent for a long time but the money men were able to hide the problems for much longer than many thought was possible.  I'm guessing that the US government had ongoing clandestine money injections going into AMR over the years and now that the government debt is under scrutiny those quiet injections had to stop lest they be discovered.  I have no proof of this but that is what I would do if I were the US government and I had free money at my disposal just for the effort of printing it from thin air.

Oh and before I close this post, let me take the opportunity to write once again that I think General Electric is a bloated, debt laden Ponzi Pig which will certainly default on its massive half trillion dollar debt.  I wonder how much GE was into AMR in the AMR BK?  GE is definitely in the vendor finance business.  It "sells" things to its customers and then finances the deals itself.  That is a total scam.  It books the profit as if the debt was paid and then carries the debt on its books pretty much forever.   GE currently trades at $14.70.  I predict that before this credit bust is over it will trade sub $3 and probably will have to file for bankruptcy.  Anyone who thinks GE is a safe long term investment for their retirement money has no clue what is going on.  Unfortunately, lots of pensions, retirement funds and insurance companies are heavily invested in GE so if you have one of these programs then you are likely invested in it by proxy.  Good luck with that.