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Dow closes below 8,000
Wall Street hit levels not seen since 2003 as the fate of Detroit’s Big Three automakers and the economy disheartened investors.
By SARA LEPRO
The Associated Press
NEW YORK — Wall Street hit levels not seen since 2003, with the Dow Jones industrial average falling below the 8,000 mark, as the fate of Detroit’s Big Three automakers and the economy disheartened investors.
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Two questions readers:
1) What are you doing to console yourself about retirement fund losses (if you are affected)?
2) On another economic note, do you think Washington DC should be helping out the auto-makers?
1: I’m self-employed, I’ve got an IRA out there in a high-risk global account from my wage days, but I have no idea what’s in it. I’m 34 and have much bigger fish to fry right now…Did I mention I was self-employed?
2: IF the auto companies & the government are going to exchange anything, I think it should be treated like an angel investor/startup relationship-There needs to be plans, a look ahead, and tangible proof that the money will come back in, otherwise that money needs to go toward green energy. It’ll wreck Michigan, and eventually affect the rest of the country, but I don’t think we should throw money after bad business. The big three stuck to the profit margins of the SUV market and let foreign companies make the efficient cars. You make your bed, you lie in it.
This is worth a ‘holy crap’: http://www.trulia.com/real_estate/Detroit-Michigan/
No on the bail out. When the CEO’s take the corporate jet to Washington to beg for money at the cost of 20k for the flight, that’s not demonstrating fiscal responsibility. Let them fail and disolve the union, then restructure. Get rid of the dead weight in the unions, reward the hard workers, and offer stock options or an employee stock purchase plan. If the workers feel that they are part of the team, and their wages and income depend on their performance, they will work harder and share good ideas on improvement. If congress wanted to do something, lower corporate taxes and get rid of capital gains tax period! TCC
Spoken like a low end manager. Problem isn’t just the unions but EVERYONE within and outside of business (yes that does include unions). That said I think change needs to start at the top but be shared by all. I don’t agree with the auto bail out, but I don’t agree with throwing everyone out the door either. Sorry I don’t have a plan but then I am just a union worker, but that is what is needed to help a company. How does that go “What can I do for my country not what can my country do for me?”
Dave
Let the CEO’s follow Lee Iacocca’s example and only take $1.00 in annual salary, and commit themselves to turning their businesses around. Cut the executive perks. No corporate jet travel. Start building fuel efficient cars here and market those cars.
I have no sympathy for the US automakers — when they were making gas guzzling sport utes, Toyota was making hybrids. It’s kind of like Boeing — they have managed to keep selling planes because a) they do a damn good job at making them, and b) they have listened to the market and adapted (787).
Randy to answer your questions
1. Keep my company pension, move my savings to a protected account till things start to settle.
2. Only if the auto makers can show that they can make a plan for the future of there company and there workers.
Dave
Chapter 11!
I hope GM drives itself into chapter 11 before the Democrats for them to take a bunch of money that will only prolong the problem.
Once GM gets out from under the $2500 in legacy costs per car, they’ll kick Toyota’s ass again.
Nobody builds better stuff than Americans when we’re not shackled down. Saturn V, B-2, Trident Sub and Cadillac CTX.
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Nobody ever got laid in a Toyota.
I’ll take one of these please:
40 Miles per day on plug in electric, and the rest of the day at 38 MPG, available in fourteen months.
HAHA! I got out a few months before the peak, but I new things were turning south a some point. Trying to eek out the last bit of profit makes me loose sleep.
Remember the market isn’t rational – we’re *still* not in an official recession, but everybody was beginning to bitch and moan like the great depression is upon us.
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If you’re down – just wait 10 years. It will come back up.
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There’s a weird thing that happens when marginal tax rates go up – business spend their money rather then give it to the Government. That will probably drive the economy faster as Business spending has a higher multiplier effect.
lol
I love the idea… I wish they would have done a slightly better editing job. Too much footage/sound from the real movie.
1. Where did the martini go…
2. Yes and no. I heard a few years that the back-end costs for GM were approx $3000 per car. That includes pension and health benefits. With overhead costs like that, GM is basically hosed if they can’t sell high margin SUVs. What needs to happen is for those costs to go away, and the only way that it can happen is in bankruptcy court. The risk is that the court could just as easily breaking the company up and sell the pieces.
What I would like to see happen is a packaged Chapter 11, with the governments assistance. The unions would lose, the suppliers would lose, and the dealership would lose, but the company would survive. The key point is getting rid of those legacy costs.
Then, GM moves forward with a clean slate and let the chips fall where they may.
If it is 3000 per vehicule for pension and health care benefits, that is not coming out of the union but from poor management. Also think of the money we would save if we took health benefits and pensions away from Congress and the President, or just took them away after they left office. The problem isn’t just unions but Everyone else has a hand in it also. Yes I am a union member (making airplanes not cars).
Dave
I don’t want to imply that the unions are the problem. It’s the whole system.
Unions
Manegement
Dealerships
And with each group, there exists a whole set of laws that make it impossible to move around. Check into the number of laws that surround opening/closing a dealership.
Removing health care isn’t the answer – the answer is moving the burden of health care from companies to the government. There are many options (single payer, multiple tiers, etc), but it should be possible to have a level playing field for all companies – without having a race to the bottom (no benefits, no healthcare, low pay)
Yes, the market is down and looking bad. This provides the best buying opportunity that we will see for many years to come. I’m taking advantage of it and buying stocks. It’s a 2 year play, but it should pay off in a big way. I say buy, buy, buy! TCC
I think its great that congress sends three of the biggest employers in the country backing because the flew in without a plan but gave two financial guy the only thing worth anything without an Idea of what they are going to do with it.
Lets buy dad assets to help the banks. No lets just buy the banks. Lets limit CEO pay but not to much cause I’ll need a job in a few months.
Mark
dad assets?