Auto Industry Bailout Failure Brings Stock Market Down
The auto industry bailout experienced rejection in the Senate yesterday, and today the stock market is down. And likely to go lower as predictions of a second financial meltdown begin to circulate. This is likely to produce more panic. So it’s probably best if you strap in and try to avoid losing your head. Someday this will all be over. But it will probably take a 2 to 5 years.
At any rate, in a stunning — but not altogether surprising — display of hypocrisy, the Senate decided to reject the $14 billion loan request from the auto industry. This is a little rich (pun intended), coming as it does on the heels of massive bailouts and attempts — totaling in the trillions of dollars — to keep the finance industry alive and kicking. The stock market is not likely to be forgiving right now.
At this point, it is likely that, even with help from TARP, it is possible that GM and Chrysler will fail. Ford is likely the only auto company in a position to make a transition to a profitable company and survive. After all, Ford was only asking for a line of credit, and not asking for an immediate loan. Ford just wanted an emergency back-up plan.
At any rate, it is clear that all sorts of havoc is about to be wreaked amongst retirees. While those who haven’t started withdrawing from their accounts will probably be okay (provided those close to retirement can hold out until a stock market recovery), current retirees who depend on investment income and pensioners with the auto industry are likely going to be having difficulties.
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.
