financial collapse

Ugh. This holiday season could turn out to be the most miserable time of the year for a lot of us. The ADP National Employment Report (released today) showed a larger loss of jobs in the private sector than anyone expected. For the month of November, 250,000 jobs were lost in the United States. Analysts had expected a loss of only 200,000 jobs for the month.

Of course, this report does not include farm-related jobs, so once all of the data is collected, the number will certainly be much larger. And it seems like there’s no end in sight.

So, the Big Three automakers pleaded their cases yesterday before congress, and it turns out that they need a butt-load of cash. 34 billion dollars, to be exact.

GM may need a total of 18 billion dollars by the time the dust settles. The company would need immediate access to 4 billion dollars to pay the rest of its bills through the end of the year, and another 8 billion for the first quarter of 2009. The automaker would then need access to an additional 6 billion dollars if turnaround efforts fail.

November auto sales have not been released yet, but are expected to be abysmal. Analysts expect a 28 percent drop for the month and sales are expected to be below a million cars for the third consecutive month, but things could be a lot worse (and they still might be). Some European countries have experienced drops as steep as 50 percent.

Maybe now that the price of gas is falling, people will decide to buy some big American gas guzzlers…or not…

Delta Airlines, fresh off of its purchase of Northwest Airlines, has decided to trim domestic and international capacity in 2009. For the first time in years Delta will cut international capacity.

The airline industry has had a very hard time turning a profit over the last few years. Most recently, astronomical fuel prices have been the biggest burden for the industry.

Now, airlines face a slowing economy, not only in the United States but abroad as well. So once again cuts will be made.

Oh, and you might want to pack light. Your FIRST checked bag could cost you soon.

Ford Motor Company was the first up in Washington today. The big automakers had until today to come with detailed plans for the future. If all goes well, the big 3 may finally gain access to a proposed 25 billion dollar bailout for the auto industry.

Ford is actually in the best financial state of the 3 automakers. The company does not burn through nearly as much cash as GM, and it has more liquidity. But the company’s statement did mention the importance of saving all three companies. If one fails, it may make things much worse for the company left standing.

That’s right, we’re “officially” in a recession. Shocker.

Economists define a recession as two consecutive quarters of negative gross domestic product. So…you’re never officially in a recession until after it’s been going on for awhile. By then, you already know you’re in a recession and you’re hopefully pulling out of it. No such luck for this particular recession.

Today is another big day for retailers. People have shaken off their Turkey Day comas and made it to their computers to shop.

The Monday after Black Friday has become known as Cyber Monday. Many traditional retailers and online merchants wait until after the Black Friday shopping frenzy to lure customers to online shops with cheap deals.

All of the major indexes have fallen by more than 5 percent. The Dow has tumbled more than 400 points…and the market is still open. Guess what? It’s all your fault. Analysts are blaming consumer spending for today’s slide.

Black Friday sales appeared to be 3 percent above what they were last year, but some analysts aren’t sure if that trend held over the entire weekend. It looks like shoppers flocked to retailers for the best door-busters on Friday, but they didn’t come back Saturday or Sunday. Sort of a ‘take the deal and run’ sort of thing.

Unemployment has hit a 15-year high in Florida, and there seems to be no relief in sight. During the month of October, the state’s unemployment rate reached a whopping 7 percent. Some experts think that by the end of next year, nearly 10 percent of the state’s residents could be unemployed.

Recently, President Bush signed a law extending unemployment benefits for an additional 13 weeks to states with higher unemployment rates. But Florida residents only get 275 bucks a week. 13 extra weeks at that rate won’t get you very far.

This isn’t necessarily a shocking story, but the FDIC’s problem bank list is at a 13-year high. There were 171 banks on the list in the third quarter, up from 117 in the second.

22 banks have failed this year, including three on Friday. Just to put that into perspective: 9 banks failed last year. Ouch.

Profits fell 33 percent in the 4th quarter for Hormel Foods Corp., the second largest turkey producer in the country. The company attributed the loss to the abundant availability of breast meat. Too much supply means that prices must drop.

An increase in fuel and turkey feed costs also ate into Hormel’s profits. The company did beat most analysts’ estimates for the quarter…and maybe the Thanksgiving rush for turkeys will help next quarter. Unless we’re all just too poor for Thanksgiving turkey…

After last week’s sell-off, the stock market warmed up a little today. The Dow gained nearly 400 points, while the S&P and Nasdaq also posted gains.

So what happened? What made investors feel all warm inside? Citigroup!!! The government announced a sweeping plan to save the banking giant. Citigroup, the nations 4th largest retail banker, will get a 20 billion dollar injection from the government.

Oh, and the president-elect named his domestic and economic teams and promised sweeping legislation aimed at jump-starting the beleaguered economy…that probably helped too.