Stock Market News: $700 Billion Bailout, Auto Industry, Wachovia
It’s going to be a busy day on Wall Street today. Indeed, the stock market is already dropping on all the news coming in, even though some of it appears positive at first blush. Today’s big stock market news events include the $700 billion bailout, the auto industry bailout and Wachovia’s pending acquisition by Citigroup.
$700 billion bailout heads to a vote
The House is expected to vote on the $700 billion bailout package today. By Wednesday, a Senate version is expected. However, despite the fact that the bill is expected to pass, Wall Street is showing signs of trepidation. Rather than the three-page proposal by Treasury Secretary Henry Paulson (granting him sweeping powers and ensuring almost no oversight), the document is instead 110 pages and includes rules that limit executive compensation for companies that take advantage of the bailout, as well as limiting the power of the executive branch in the process.
Auto industry bailout
As part of a massive spending bill ($630 billion) last week, Congress passed money for an auto industry bailout via loans. The justification is that the Big 3 automakers need help getting their assembly lines and what have you modernized so that they can make more fuel efficient cards and hybrids. Which is funny. Since the auto industry has been throwing money at members of Congress for the past three decades in order to prevent that very thing from happening. I guess the nice tax breaks they have don’t allow them to enough capital to fund changes that would update their business models.
Wachovia to be bought by Citigroup
In an attempt to keep Wachovia from going under, the FDIC is brokering a beal whereby Citigroup is buying Wachovia’s banking operations. The move is designed to provide capital for the struggling financial company, prevent Wachovia from going out of business, and save the taxpayers money, since the FDIC won’t have to expend any funds.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
Tags: stock market, stock market news, investing blog, auto industry bailout,
economy, investments, $700 billion bailout
September 30th, 2008 at 11:38 am
[…] deal-making, though, is bad for the ordinary investor. The companies that are bought — like Wachovia — are finding that the value of their stocks is dramatically reduced, leaving investors […]