The big news over the last 24 hours surrounds the ongoing saga of automakers GM and Chrysler. This morning, the US gov’t rejected the strategic plans offered by the two automakers as insufficient to justify increased amounts of federal spending. However, the government will float more capital to both companies in order to prevent immediate bankruptcy.
Coupled with this news, the Obama administration asked for and received the resignation of GM CEO Rick Wagoner. He had been leading GM since 2000.
Stocks have reacted adversely to this turn of events, and the Dow was down nearly 300 points during Monday’s trading session. However, stocks are set to rebound slightly this morning.
Meanwhile, home prices continue to plunge. The S&P Case Shiller 20-city index reported a 2.8% monthly fall and a 19% annualized fall over last year.
And finally, air travel, another lagging indicator of economic activity, has taken a large hit. The number of passengers on all U.S. flights is expected to fall 7.8% in 2009, the largest drop since post-9/11/2001.
