- After a five day winning streak the DOW sank yesterday as confirmation that the United States was in a Recession and other terrible economic news hit yesterday. Half of last weeks gains were lost.
- Bank stocks saw biggest decline since “crisis” began, Treasury yields reach all time lows, Oil falls to below $50 a barrel, JPMorgan to cut 3,000 WaMu jobs, Mortgage delinquencies surge, Sears posts $146M loss
- Asian stocks plunge, DOW futures did see an early rebound
- Speaking of recession the National Bureau of Economic Research declared not only that the US was in a recession but we’ve been there since December 2007. The group makes their assessment by using statistics and weighing factors that go beyond simply finding three quarters of decline. What kind of factors? Well consider a 26-year low in manufacturing for November; a continuation of downturns in manufacturing.
- Remember the $700 Billion bailout? Elizabeth Warren, the chairwoman of the oversight panel charged with watching over the bailout says the government still does not have a coherent plan for your money.
- Those interest rate cuts that haven’t proven effective so far? Bernanke says we could have more. At 1% now the question is just how low can they go and what, if anything, will our money be worth?
- House speaker Pelosi is pushing legislation that “would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy.” The cost? $500 BILLION dollars, estimated.
Big 3
The automakers are heading back to Washington to hand in their homework assignment. Speculation centers around the idea that automakers could sell off some of their brands to consolidate offerings. Reportedly FORD is weighing a sale of its Volvo brand.
Other plans likely “would refinance their companies’ debt, cut executive pay, seek concessions from workers and find other ways of reviving their staggering companies.
But is it enough? General Motors owes $45 billion and it must pay more than $7.5 billion early in 2010 to a United Auto Workers trust fund. Ford owes more than $26 billion, with $6.3 billion due to its UAW trust fund at the end of 2009. Chrysler is a private company but one can assume they are in similar amounts of debt.
What will a “loan” of $25 Billion really do? is there even a thought that they could actually pay the money back? We will HOPEFULLY hear some answers. If you haven’t noticed, I am 100% against it but if you are on the fence, tune in and check out what they have to say.
