government

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.

The United States government is pumping another 800 billion dollars into the economy. The Federal Reserve will be spending 600 billion dollars buying back mortgage-related assets from Fannie Mae and Freddie Mac while the Fed and Treasury Department will be using 200 billion dollars for lending purposes.

The purpose of the huge expenditure is to ease the credit markets. The Fed hopes to ease lending in the housing sector, and the 200 billion dollar package will be directed at student, car, and business loans.

And homeowners? Eh…we’ll worry about them later.

President Bush has agreed to signed a bill passed by congress to extend unemployment benefits. Guess the unemployment rate hit the magic number (6.5%).

The bill will provide at least 7 additional weeks of unemployment benefits to the jobless. In states with at least 6% unemployment, the federal government will provide an additional 20 weeks of benefits. Add this to a 13 week extension already in place, and folks in states like California will get an additional 33 weeks of benefits.

U.S. auto makers will have to wait for that bailout. The Big Three CEOs took their private jets back to Detroit to come up with business plans for the government. They’ll have to be some pretty snazzy presentations to get money out of legislators, and then past the president.

GM, Ford, and Chrysler have until December 2nd to complete their homework. That should be plenty of time for them to create their little projects.

Ohio projects that its state unemployment fund will run out very soon. By December 31st, the fund will have 28 million dollars in it, but expected payouts will total 35 million.

Currently, the average unemployment check in the state is 306 dollars a week. But Ohio’s Unemployment Compensation Fund Advisory Council may make recommendations to Ted Strickland, governor of Ohio, to change the weekly benefit.

On Monday, the United States Securities and Exchange Commission accused Mark Cuban, owner of the Dallas Mavericks, of insider trading. Allegedly Mr. Cuban sold 600,000 shares of Mamma.com stock based on non-public information he was privy to, avoiding a lost of 750,000 dollars.

Apparently, Mamma.com notified Cuban that a stock offering would be taking place. Within hours, he had sold his entire position in the company. But Mr. Cuban’s lawyer claims the charges are absurd.

At the Reuters Global Finance Summit this week, transparency was the word of the day. It looks like the days of the wild, wild Wall Street could be coming to an end. Many experts believe that the election of Barack Obama and the increased control of Democrats in the House and Senate will hasten this change, as re-regulation seems to be at the top of the Democratic agenda.

There are those who are still afraid of oversight. “Too much regulation means businesses can move to other places in the world,” said former PaineWebber head Donald Marron, who now runs private equity firm Lightyear Capital. But since the crisis is global, that fear seems unfounded. Get ready for Morgan, Chase, and Goldman to wear some see-through shirts.

Oh, boy. Here we go. It all just keeps getting worse. Does anyone else think we should all just close our eyes and ears, rock back and forth a few times and wait until it’s over?

During October, another 85,000 homes were lost. That’s a 25 percent increase over last year, and a 5 percent increase from September. Since last August, almost 1 million homes have been lost. Sure, states like California and companies like Bank of America are doing what they can to stop the bleeding, but it’s time we got some federal legislation that actually works.

You remember the bailout, right? You know, the government’s 700 billion dollar cash cow that was supposed to save the economy? It’s a few billion dollars lighter, but it’s still around somewhere.

Well, today, Henry Paulson announced a drastic change in the bailout process. Instead of focusing on toxic assets in the financial industry, the Treasury Department will begin focusing on ways to help thaw the credit freeze.

Just a few weeks after Morgan Stanley and Goldman Sachs turned themselves into bank holding companies, American Express has followed in their footsteps. The company applied to the Federal Reserve just 2 or 3 weeks ago and received approval in half the normal amount of time. Now the company has access to up to 3.6 billion in bailout funding.

But hey, it’s not like AmEx made this move because anything was seriously wrong (according to the company) No…the move was simply a pro-active decision by American Express to diversify.

Of course, AMEX announced a drop in 3rd quarter profit and plans to lay off employees…

AIG is slated to receive another 40 billion dollars in bailout money….well…sort of. The federal government announced plans to purchase 40 billion dollars in AIG stock, because the initial bailout(s) wasn’t enough to secure the company’s finances. At least the company isn’t lying. AIG definitely needs the money: the company posted a 3rd quarter loss of 24.47 billion dollars.

By the time this latest round is over, taxpayers would have pumped nearly 150 billion dollars in AIG.

Central banks across Europe unexpectedly lowered their lending rates today. The Bank of England lowered its benchmark by 1.5 percent. The new 3 percent lending rate is the lowest seen in the U.K. since 1955, and a reduction by this much has not been seen since 1922.

Swiss policymakers and the European Central Bank both cut their lending rates as well. Apparently, they didn’t want to be left out of the party. And hopefully this will spur new lending and thaw the credit freeze. I do believe in fairies…I do believe…