Global markets dive as Obama rejects carmakers' plea

The Times(UK) ^ | 03/30/09 | Christine Seib

[TigerLikesRooster]

Global markets dive as Obama rejects carmakers' plea

Christine Seib in New York

Global stock markets dived today after the White House denied General Motors (GM) and Chrysler multi-billion dollar bailouts and threatened to push the ailing carmakers into bankruptcy if they do not implement aggressive restructuring plans.

The Obama Administration effectively seized control of the companies – ousting General Motors’ chairman and chief executive and pushed Chrysler toward a merger – after finding that the carmakers’ own restructuring plans “did not establish a credible path to viability”.

The Dow Jones industrial average tumbled 215.37 points to 7,560.81 within minutes of opening while in London, the FTSE 100 index of leading companies fell 104.59 points to 3,794.26. In Germany, the DAX declined 145.88 points and in France, the CAC fell 89 points to 4,057.67.

In a document released at midnight last night, the White House set out its key findings on the two companies after more than a month of intensive talks between the President's auto taskforce, GM and Chrysler's managements and other stakeholders.

GM last December received a $13.4 billion bailout and had asked for a further $16.4 billion, while Chrysler got $4 billion and wanted up to $6 billion more.

[TigerLikesRooster]

Ping!

[stuartcr]

So who is right? Those that say bankruptcy is ok and the market will fix itself, or those that think bailouts are ok?

[bikerman]

Keep going ZERO we all will be in tent city.

[Roos_Girl]

I don’t guess a “credible path to viability” would include getting rid of the unions?

[Always Right]

Obama may or may not be the anit-Christ, but there is no doubt he is the anit-Capitalist.

[Nachum]

The List, ping

I believe that the US stock markets are down this morning also...

[lakertaker]

You cannot be doing what he is doing accidentally. Near tripling the debt, humongous deficits, crashing the dollar with the printing press, attacking producers.

[Roos_Girl]

Agreed.

[jveritas]

Bankruptcy is the solution but no the bankruptcy that Obama is seeking. Obama goal is to drive the company for bankruptcy so his socialist administration will have a 100% control over them.

[TurtleUp]

So who is right? Those that say bankruptcy is ok and the market will fix itself, or those that think bailouts are ok?

Looks like Obama has a unique compromise strategy here: dump as many tax dollars into failed companies as the voters will tolerate, and then let the company finally fail. This combines all the fraud and waste of a bailout with all the disruption of a market failure. The socialist in our White House is as talented with our economy as he is with our military.

[newfreep]

As president, I say bailouts are bad.

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[stuartcr]

I see.

[Seruzawa]

Both GM and the UAW are going to be very sorry that GM took even a nickel from the govt. Once the “community organizer” is done with them the UAW will discover that a 25% pay cut is preferable to no paycheck at all.

[ryan71]

I hope Ford makes it.

[Zeddicus]

You cannot be doing what he is doing accidentally. Near tripling the debt, humongous deficits, crashing the dollar with the printing press, attacking producers.

If course it's not by accident. It's not just stupidity, either. This is a bloodless Communist Coup d'état.

Where is the Constitutional authority for the Government to funnel billions of our dollars to foreign bankers, seize private firms, fire corporate CEOs, or backup auto warrantees?

This central government is now a domestic enemy of We the People.

[RushingWater]

Obama's car for the working class. The union boss's ride and his ride will be something - uh, more luxurious as is appropriate to their ruling status.

[tatsinfla]

they were down 299 when i saw he was speaking on this issue...

[Western Phil]

“In a document released at midnight last night....”

?

[dr huer]

Replacing GM management has been long overdue. Look at the decay of GM stock market price over the past 5 years, and their telling Las Vegas billionaires “Go Away!”. The message is that the Obama piggy bank is not infinite. Obama may not be a total disaster.