Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Stock Markets Nosedive as Senate Says No to Auto Bailout

Stock-Markets / Credit Crisis Bailouts Dec 12, 2008 - 07:16 AM GMT

By: PaddyPowerTrader

Stock-Markets Best Financial Markets Analysis ArticleDetroit's auto bailout drives down a Congressional cul-de-sac. To add to this, GM has hired a bankruptcy lawyer, Bank of America is to cut 35k jobs and weekly jobless claims have soared to 573k (a two year high). Just to rub salt in the wounds, JP Morgan's Jamie Dimon tells us that 2009 is going to be another anus horribulus horror show for banks. Its no wonder the Dow Future is off 275 as I scribble.


Today's Market Moving Stories

  • This whole thing just gets more surreal by the day. I recall in college studying the Tulip frenzy, the South Sea Bubble and the Mississippi system. But nowadays we get a Ponzi scheme every other day. This time, from a former Nasdaq chairman was arrested in an alleged Ponzi scheme! You really couldn't make this stuff up.
  • There really is nowhere to hide, nowhere to run when Proctor & Gamble start warning about sales .
  • Nor is there anywhere to export to anymore, as US exports fall . Recall previously that I have spoken of this as the very last pillar that was propping up the castle of sand that was the US economy.
  • Meanwhile following hot on the hells of the doom and gloom of the IMF and World Bank forecasts for 2009, we get less then glad tiding from the OECD. They now think that the recession will be longer and deeper than previously thought .
  • Just when you thought that those over cautious chaps in the ECB were getting in touch with the real world, they start to back peddling and have strongly hinted that there won't be the much needed January rate cut. Well at least Germany has something in common with the US, with both auto industries in crisis .
  • HBoS warns that it is to take another £3.3bn in impairment charges, with its operating environment increasingly difficult. It said pressure is building on its net interest margins due to significant reductions in BoE rates. In other words, they're simply not squeezing enough out of its deposit base any more. Meanwhile, its wholesale funding costs remain high relative to base rates. It also warned that corporate credit conditions have continued to deteriorate significantly.
  • A story doing the rounds is that if the bellwether Japanese Tankan survey of business sentiment is bad enough, then that could tip the Bank of Japan committee in favour of a rate cut on Dec 19th. The Tankan is out on Monday. Rates are already a mere 0.30%, so ZIRP beckons.
  • The Atlantic's Marc Ambinder has a must read post about the fires Team Obama sees itself having to put out once it assumes office.

Auto Bailout Plan Fails
The US Senate decided there was nowhere near enough support to approve the House's plan for emergency loans to GM and Chrysler. So they decided 52 to 35 to end the debate and have a go at reworking the deal. This is actually what happened with the TARP; the House approving it, the Senate rejecting it, altering the terms, approving and then sending it back to the House. So all isn't lost in terms of the loans, but time is everything, especially for GM, which warned last week that it might not make it to the end of the year. GM is reportedly now gathering its lawyers and bankers together to consider the possibility of dropping into Chapter 11 bankruptcy.

It's important to realise the Senate wasn't simply being obstinate with a debate on whether it would be a case of good money after bad. The disagreement actually centred on union demands. If anything, it's the UAW that's being stubborn and playing chicken with GM's future (and hence the workers it represents). Among the big concessions requested of UAW are for wage parity between its members and workers of other autos manufacturers, in particular the Japanese car companies operating out of the US. While the UAW has accepted wage deals for new workers, it is reluctant to give up much for existing staff, and certainly not on the short time table currently proposed. This is the point the Senate can't get past - bailing out the autos firms, but without workers having to shoulder a greater burden.

Data Today
US retail sales are out at 13.30. With this figure likely to be dire, today could get VERY ugly. The University of Michigan Consumer Sentiment Survey, released at 15.00, is unlikely to provide any positive news either.

Someone just pressed the self destruct button and a red blanket has engulfed equities

And Finally…
Begging For Bailout MoneyTwas the night before Christmas, and all through the Street.
Not a head hunter was working, which was no easy feat.
The resumes were hung, by the fax machine with care.
In hopes that a 2 x 2 might soon appear there.
The interns were fighting over who covers the Fed.
While visions of Grad school danced through their head.
My wife worked the night shift with me at the Gap.
We just liquidated the IRA, and what was left of my CAP.
Then down on the trading floor there arose such a clatter.
It sounded like the Yanks just hired a new batter.
Across all my windows, the offer-wanteds did flash.
I took a look at my shorts and threw up in the trash.
When, what to my wondering eyes did appear,
But a 5.00% mortgage rate and GSEs …without fear!
With a little old Fed chief, so lively and tan.
I knew in a moment it wasn't Greenspan.
More rapid than rate cuts the liquidity came
and he whistled, and shouted, and called them by name.
On Five year! on Three years! On Two years! On Bills!
Looks like I picked the wrong time to join Shinnecock Hills.
Forget about appraisals, and FICO et al,
Just refi ‘em, refi ‘em,… refi ‘em all!
The market was tightening, like a bat out of hell!
“She'll put that BUY thru Tradeweb!” one salesman did yell.
Things looked real bad, when out of the blue.
A salesman named Donny, had something to do.
His eyes how they twinkled! His dimples… how merry!
His cheeks were like roses, just like the guy in Glengarry.
He sold me some GN's, and then the GN 5 roll too!
He even sold GN 5 1/2's, well below 102.
Then he sprang from his Bloomberg, and picked up the phone.
His smile grew wide, as he dabbed on cologne.
We heard him exclaim, as he ran out of sight:
“The MBA is back in Vegas, and I just booked the last flight!”

Disclosures = None

By The Mole
PaddyPowerTrader.com

The Mole is a man in the know. I don’t trade for a living, but instead work for a well-known Irish institution, heading a desk that regularly trades over €100 million a day. I aim to provide top quality, up-to-date and relevant market news and data, so that traders can make more informed decisions”.

© 2008 Copyright PaddyPowerTrader - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

PaddyPowerTrader Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules