President's white hat turns gray...or even black?
The auto industry thought - THOUGHT - it was waiting for the President to a approve a loan
possibly a bridge loan to get through its cash crunch and have time to formulate longer lasting plans to reorganize...now, maybe not. Chrysler already took the safest route and went into all out hibernation, closing all 30 of its production plants for a month. At today's press conference the President's spokeswoman said that the President is against a disorderly bankruptcy - which is something different from approving a bridge loan. It is not clear how much the lobbying by those five Southern senators is taking the President down a new road..possibly down a new road without a car or without one made by a US company.
But it's not just autos in trouble...
GE's outlook was downgraded to negative from stable today by S&P. So was the outlook for GE capital. Corporate earnings across the markets have been coming in on the light side., another sign of trouble brewing. Fed Ex announced it would be cutting salaries and for white-collar non union employees it is stopping contributions to retirement accounts. This is serious stuff. Fed ex is even being helped by plunging fuel prices that are cutting it more slack. It's still not enough.
OPEC
Meanwhile OPEC, after cutting output more than expected, by 2.2mbd, sees oil still plummeting, with the oil price down 10% on the day and down 20% over the last five days. OPEC does not seem to be able to get a hold on oil prices even with deep output cuts.
On the good news side...
There is some good news on the housing front as 30-Yr fixed rate mortgages are at a 37 year low. Still, housing prices are falling and the sector remains troubled. There is no panacea.
Looking ahead
Although we are in the holiday period, markets remain restless. A lot of capital has been pulled from active duty in markets, still some volatility will be possible though year end. The GE downgrade and Fed-Ex news on the day is an eye opener about how much damage is being done to companies-and not just financial companies although GE has its exposure with GE Capital. The President's procrastination in helping the auto companies is a reflection of a split in the Republican party about who to help and why. This is is partisanism gone amok. If this is an example of the sort of bipartisan cooperation that will greet Obama when he is seated, then he is in for a very rough four years.
The auto industry thought - THOUGHT - it was waiting for the President to a approve a loan
possibly a bridge loan to get through its cash crunch and have time to formulate longer lasting plans to reorganize...now, maybe not. Chrysler already took the safest route and went into all out hibernation, closing all 30 of its production plants for a month. At today's press conference the President's spokeswoman said that the President is against a disorderly bankruptcy - which is something different from approving a bridge loan. It is not clear how much the lobbying by those five Southern senators is taking the President down a new road..possibly down a new road without a car or without one made by a US company.
But it's not just autos in trouble...
GE's outlook was downgraded to negative from stable today by S&P. So was the outlook for GE capital. Corporate earnings across the markets have been coming in on the light side., another sign of trouble brewing. Fed Ex announced it would be cutting salaries and for white-collar non union employees it is stopping contributions to retirement accounts. This is serious stuff. Fed ex is even being helped by plunging fuel prices that are cutting it more slack. It's still not enough.
OPEC
Meanwhile OPEC, after cutting output more than expected, by 2.2mbd, sees oil still plummeting, with the oil price down 10% on the day and down 20% over the last five days. OPEC does not seem to be able to get a hold on oil prices even with deep output cuts.
On the good news side...
There is some good news on the housing front as 30-Yr fixed rate mortgages are at a 37 year low. Still, housing prices are falling and the sector remains troubled. There is no panacea.
Looking ahead
Although we are in the holiday period, markets remain restless. A lot of capital has been pulled from active duty in markets, still some volatility will be possible though year end. The GE downgrade and Fed-Ex news on the day is an eye opener about how much damage is being done to companies-and not just financial companies although GE has its exposure with GE Capital. The President's procrastination in helping the auto companies is a reflection of a split in the Republican party about who to help and why. This is is partisanism gone amok. If this is an example of the sort of bipartisan cooperation that will greet Obama when he is seated, then he is in for a very rough four years.
1 comment:
Sounds like japan.
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