Thursday, November 6, 2008

Lots to Digest

Europe and Asia are taking their lead from the U.S. action yesterday and going down hard. Toyota reported last night and their earnnings forecast came down by a widely telegraphed but still shocking amount. England and Europe are preparing big rate cuts which should help some, all other things being equal.

The CEOs of GM, Ford and Chrysler are meeting with Nancy Pelosi today in a last ditch effort to get some more money out of the government. Call me crazy, but I don't think they should get any more money despite the thousands of jobs that will be lost if one of them fail. They are bad and badly-structured businesses. Too much debt, too many retirees. You can argue that putting money into an investment bank whose franchise was fine but balance sheet stretched had a real long-term benefit and that the bank will come out the other end healthy. I can't see a path to a healthy U.S. auto industry with as many global players as we have.

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