Monday, November 10, 2008

GM Stock Hits A Low Not Seen Since 1946, While Two More Banks Fail

Fresh signs of more problems for the economy make it clear that it will extremely difficult to to rescue the American automobile industry as well as other troubled businesses and some banks. Unfortunately it is only a temporary raise in the insured savings limit to $250,000 from the normal $100,000. And it is still likely that many will continue to remove funds from troubled banks, only helping to advance their slide into collapse.

For General Motors, which is bleeding cash, it is not clear whether any bailout will be enough to help the ailing American auto giant. General Motors needs sales, and the public isn't buying because they are hurting financially and buying a new car isn't at the top of many Americans wish lists right now. GM stock is trading at a little over $3.46 cents today. This low level hasn't been witnessed since 1946, when GM just begun to build new cars and switch back to peacetime production of goods.

The United States needs it's automobile industry to survive. It is a vital to millions of jobs somehow related to this vital industry in some way, including car dealers, parts, service and even loans. Congress will have to do something and very soon.

Another seriously bad sign was the shipping giant DHL is trimming jobs. This proves that business and others are not shipping goods at the level previously witnessed when the economy was stronger. It is a bad omen for the economy for sure. Many of the 9,500 jobs being cut are among both management as well as nonunion drivers not part of the Teamsters Union. It is another sign of the problems with having a nonunion job in this bad economy, where it is harder to lose your job if it is a union job. Another bad sign is that DHL is specifically cutting back on it's American shipping service where it's international services remain more healthy.

In the very short term, congress and the White House need to act quickly. And in the slightly longer term, President Obama will have his hands full of challenges to rescue jobs and the economy. A difficult path lies ahead, where immediate action is required to stop the daily drip-drip of bad news about the economy.


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