David Kirkpatrick

November 12, 2008

Amex hoping for the dole, GM sinking and oil back in fifties

Here’s a little buffet of economic news —

The latest hopeful for corporate socialism? American Express after reorganizing as a bank holding company.

From the link:

American Express Co. is seeking $3.5 billion in funds under the government’s plan to directly invest in financial firms, according to a Wednesday report in The Wall Street Journal citing unnamed sources.

Earlier this week, American Express received approval from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.

The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.

Crude has dropped below $56 a barrel.

From the link:

The Energy Department said it expects U.S. consumption of petroleum to drop more severely than any time since 1980 next year, with gasoline use dropping by another 3 percent. Its Energy Information Administration on Wednesday said 2009 petroleum consumption is projected to sink by a further 250,000 barrels per day, or 1.3 percent, more twice that projected in its previous outlook.

Also on Wednesday, the International Energy Agency said more than a trillion dollars in annual investments to find new fossil fuels will be needed for the next two decades to avoid an energy crisis that could choke the global economy.

Light, sweet crude for December delivery fell nearly 6 percent, or $3.50 to settle $56.16 a barrel on the New York Mercantile Exchange, the lowest closing price since January 2007. Oil prices have plunged more than 60 percent in four months from record highs near $150 in July.

And last, but certainly not least, among debate on whether to bail out the Big Three US automakers, General Motors stock closed at its lowest point since 1946 — yes, that’s not a typo nineteen FORTY six.

From that link:

Shares of General Motors plunged another 13% on Tuesday to a 65-year low, closing below the $3 mark for the first time since 1946.

The stock closed Tuesday down 44 cents to $2.92, its lowest close since April 1943.

The Dow Jones industrial average component has lost nearly 40% of its value since Thursday. Shares began their slide on Friday when GM warned that it could run out of cash and posted a $4.2 billion loss.

On Tuesday, the battered automaker unveiled plans to idle nearly 2,000 hourly workers who build engines, transmission systems and body panels, during the first quarter of 2009, according to company spokesman Tony Sapienza. That reduction follows the news, disclosed Friday, that GM will idle another 3,600 hourly workers.

Making matters more complicated, GM will have to keep most of these hourly workers on the payroll during the current labor contract, which runs through September 2011.

2 Comments »

  1. Но не стоит забывать: высказывания Владимира Путина, в отличие от призывов Махмуда Ахмадинежада и Уго Чавеса, прозвучали в тот момент, когда доллар находится на подъеме и «давит» евро. Причем, по мнению экономистов, речь идет не о временном укреплении «бакса», а о радикальном переломе тенденции на мировых валютных рынках. Аналитики говорят о том, что в течение ближайших нескольких месяцев доллар будет возвращать себе то, что утратил за несколько лет падений. И что пока на горизонте не видно факторов, способных прервать его уверенный рост. банки Омска Тем не менее, Путин призывает отказаться от доллара как расчетного инструмента при заключении торговых сделок с Китаем. Что это — неверие в будущее доллара или политический шаг?

    Comment by novosel — November 13, 2008 @ 4:58 am

  2. гы, davidkirkpatrick.wordpress.com прикольный адресок)) Не подскажешь где РУшки подешевле купить можно?

    Comment by меринус — March 6, 2009 @ 9:51 pm


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