Thursday, March 5, 2009

Markets tank again; GM and Citigroup lead the way

As of 2:30 PM today, the Dow was down 260 points to 6.612. And The One didn’t even mention the economy today. And Timmy hasn’t been in the news. Hmm. I guess this is just reflective of how the markets see the assistance from the government.

The Dow is down more than 50% from its high of 14,164 on October 2007. February 2009 is the worst February for the Dow since 1933.
“The Dow, which dropped 12 per cent this month, had its worst February since 1933. During the month, 20 of the 30 components reset their 52-week lows, with 13 hitting 52-week lows at some point during final session of the week.”
Citigroup’s stock finally fell below the $1 threshold. Welcome home, dear! I thought the feds were going to prop up Citi after their announcement last week about converting a few billion dollars in preferred shares to common stock. That would give the feds 36% ownership in Citi. Looks like that was a great idea..

Oh yeah, and GM is saying today they may have to go into bankruptcy to help restructure. Why didn’t they say this $50 BILLION ago? Once again, the government offered a band-aid to something that needed to be amputated. If GM is going to have to declare bankruptcy to get straight, they should just suck it up and do it. Bankruptcy would allow them to void their union agreement so that could be restructured as well. Every time they’ve been give BILLIONS, they come back to the trough like pigs a few weeks later wanting to get some more. Unfortunately, President Obama promised in his speech to Congress last week that he would not let them fail.

While the American auto makers are crying, why haven’t we heard any screams from Toyota, Nissan, or Honda?

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