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Daily Digest - Dec 12

Friday, December 12, 2008, 5:16 AM

Jim Rogers calls us "bankrupt", Bank of America to cut up to 35,000 positions, chart of unemployment claims vs recessions, auto bailout dies in the senate, growth in base money supply outpaced by credit destruction.

Economy

Jim Rogers calls most big U.S. banks "bankrupt"

NEW YORK (Reuters) - Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.

Speaking by teleconference at the Reuters Investment Outlook 2009 Summit, the co-founder with George Soros of the Quantum Fund, said the government's $700 billion rescue package for the sector doesn't address how banks manage their balance sheets, and instead rewards weaker lenders with new capital.

Bank of America to Cut 30,000 to 35,000 Positions

Dec. 11 (Bloomberg) -- Bank of America Corp., the third- largest U.S. bank, said it plans to cut 30,000 to 35,000 positions over the next three years because of its acquisition of Merrill Lynch & Co. and the weak economic environment. 

The final number of job cuts won't be decided until early next year, the Charlotte, North Carolina-based bank said in a statement today. The companies together employ 307,000 people, including about 60,000 at New York-based Merrill Lynch. Bank of America spokesman Scott Silvestri said the "vast majority" of job cuts will come next year.

Weekly Unemployment Claims vs. Recessions (Chart)

Union balks and $14B auto bailout dies in Senate 

WASHINGTON (AP) - A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.
Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011. 

Auto Suppliers Share Anxiety Over a Bailout

The companies have been warning that they would run out of money for some time, but crushing bills from their suppliers are coming due. It appeared unlikely that they could hold on until President-elect Barack Obama takes office next month, when he and a new Congress might be able to provide a lifeline, as a Congressional rescue this year looked increasingly unlikely.

As a result, the hypotheticals about the domino effect of the companies' troubles through the vast network of auto supplier firms - which employ more than twice as many workers as the carmakers - are becoming real.

Nuclear Economic Winter Reflected in Shipping, Capex, Jobs, Treasury Yields

Simply put, credit destruction on a marked to market basis has without a doubt outpaced growth in base money supply.

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3 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Dec 12

Drudge Has its headlines jacked up:

One big lie they have this link,

http://www.bloomberg.com/apps/news?pid=20601087&sid=aGQSr_LRM_.8&refer=worldwide

Personally I think they should have this link there as well

http://www.bloomberg.com/apps/news?pid=20601109&sid=apx7XNLnZZlc&refer=home 

jrf29's picture
jrf29
Status: Gold Member (Offline)
Joined: Apr 18 2008
Posts: 453
Re: Daily Digest - Dec 12
Quote:

Treasury 'ready' to avert collapse of Big Three automakers

 WASHINGTON (AFP) – The US Treasury said Friday it is "ready" to avert the collapse of the Big Three US automakers until Congress can address their problems, a spokeswoman said Friday.

"Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry," Treasury spokeswoman Brookly McLaughlin said.

http://news.yahoo.com/s/afp/20081212/ts_afp/usautoeconomygovernmentpublicaid 

It seems that what will be will be, regardless of the wishes of congress!  Exactly where did the treasurer of the United States get the authority to disperse $15 Billion without the approval of the US congress?

In my town, if the treasurer decided to spend a million dollars without the approval of the people at Town Meeting, that would be a crime.

lucky's picture
lucky
Status: Member (Offline)
Joined: Apr 16 2008
Posts: 2
Re: Daily Digest - Dec 12 The bailouts went to China

http://market-ticker.denninger.net/2007/08/thumped-thursday-mozillo-call...

That's why the Fed won't reveal where the bailouts went to!

Sorry, wrong link, here is the video link about CSPAN evidence of foreign bailout money:

http://market-ticker.denninger.net/archives/674-Aw-Crap-Told-You-So-Again.html 

 

 

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