Back in September, Congress was threatened with economic catastrophe if the $700 Billion bailout bill wasn’t passed. The rhetoric and assertions that the financial system would collapse ‘within days’ intensified after the House valiantly resisted on Monday of that week. By Friday, however, they had capitulated and the fear mongers once again got their way.
It would seem they’re at it again this time in the form of automakers. Big Car, unable to generate any type of profits whatsoever is now lobbying for some of the bailout money as well. And the dire predictions of economic catastrophe if money isn’t given immediately are beginning to surface once again. Obviously, there is some resistance to including big Car as doing so will likely necessitate another financial rescue package in the not so distant future. Watch the rhetoric moving forward, especially if a majority of the House of Representatives come out in opposition to the plan.
In an unrelated but important matter, the media is once again doing its job of trying to bolster some degree of optimism by saying the credit markets are unfrozen. They point to the fact that corporate bond sales in October were higher. This market had previously been frozen solid. However, lost in the details was the fact that we already know who the buyer was – the Fed through it’s Commercial Paper Lending Facility. The difference between the facts here and the intended conclusion is obvious.
In what is probably the most accurate leading indicator moving forward, new unemployment claims blew through the 500,000 mark for this past week coming in at 516,000. One only needs now to wonder how long it will be before some type of bailout will be required for unemployment insurance programs since they were originally designed to provide 26 weeks of coverage, and are currently covering up to 39 weeks. To make matters worse, there is a good chance that number will be expanded to a full year of coverage.
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[...] Investing articles and resources for the wise investor | Investing 101 wrote an interesting post today onHere’s a quick excerpt Back in September, Congress was threatened with economic catastrophe if the $700 Billion bailout bill wasn’t passed. The rhetoric and assertions that the financial system would collapse ‘within days’ intensified after the House valiantly resisted on Monday of that week. By Friday, however, they had capitulated and the fear mongers once again got their way. It would seem they’re at it again this time in the form of automakers. Big Car, unable to generate any type of profits whatsoever is now lo [...]