December 2008

The economic headlines were grim this morning.  Initial jobless claims were up 573,000 while continuing claims rose to more than 4 million.  Sara Lee is the latest company to announce layoffs, joining other big names such as DuPont, Dow Chemical and many others announcing cuts just in the past week. Keep this in mind: the total number of claims just the week is more than the total number ... read more

Quick thoughts ahead of the show... The auto rescue plan failed in the Senate.  General Motors bonds are trading at 11-cents on the dollar, indicating a likely bankruptcy.    Congress will point fingers over who is to blame, but while that happens the bailout ball is in Michigan's court. Instead of arguing about why the bill didn't pass, Michigan should immediately cut all corporate ... read more

Listening to UAW President Ron Gettelfinger's press conference regarding auto rescue bill failure...  It's what he is not saying that speaks volumes.   In continuing to hammer the concept that the wages of UAW workers are similar to those of the U.S.-based foreign manufacturers, he is saying nothing about the real problem: the legacy costs of pensions, benefits and health care. As the read more

Trust in Wall Street is already down given the 40% drop in the Dow, housing blowup, credit rating agency controversy and a number of other negative headlines in the past 12 months.    Now we can add old school fraud to the list. The revelation that 50 year veteran and (formerly) trusted asset advisor Bernie Madoff was engaged in one of the biggest Ponzi schemes in history shot through ... read more

Interesting story in today's New York Times about how many states' unemployment benefit funds are drying up and how the states may need - or have already asked for - help from the Federal government. One of the key passages from the article: Unemployment taxes are collected by states from employers, but the rate varies from state to state per employee. In good ... read more

It wasn't a surprise the Fed cut interest rates today.   The surprise was in how they cut them and by how much.   They cut to 0%.   And they cut to 0.25%.   Confused?  I was too at first. We are used to cuts to nice, even numbers.   1/2 a percentage point (or 50 basis points) was expected.   We instead got more of a cut, at least 3/4th of a percentage point.    We say "at least" ... read more

Despite being widely hated, ridiculed and otherwise smacked down by the public, the $700 billion dollar TARP program may turn out to be the best investment the taxpayer made all year. The folks over at Bianco Research (run by Jim Bianco, one of the smartest and most respected bond analysts in America) published a note today called "Tracking the Trust Cost of the TARP."  This is their ... read more

Denmark-based Saxo Bank each year comes out with a list of "outrageous" predictions for the next 12 months.    According to the firm they are an "attempt to predict rare but high impact 'black swan' events that are beyond the realm of normal market expectations. Compiled as part of the bank's 2009 Outlook, the thought exercise this year present a dismal view of the global financial ... read more

Quick thoughts on the auto rescue loan news... GM and Chrysler received their loans from the U.S. government today.   Ford is not participating in the program.    General Motors and Chrysler will get $13.4 billion now, with GM to receive another $4 billion in February.    The loan requires the automakers to become "viable" by the end of March, 2009.    As I wrote last week, ... read more

This just crossing ... the UAW is unhappy with some terms of the auto loan and will ask President-Elect Barack Obama to change some of the terms it views as 'unfair.' The union demanded the loan - got it  less than 2 hours ago - and now wants it changed.  You can't make this stuff up, folks. Below is the official UAW release.   It's clear they believe the incoming administration will ... read more