I already posted this elsewhere, but might as well here too.. By Leslie Wines, MarketWatch Last Update: 3:23 PM ET Dec 20, 2005 NEW YORK (MarketWatch) - U.S. stocks were lower in late afternoon trade Tuesday, as strategists suggested the year-end rally may be over, while General Motors traded not far from its all-time low stock price.
Sell any and all of your stock. GM and Ford may declare bankruptcy on the same day. Just kidding, but if even one of them does the stock market will tank, 2-3000 points in a matter of two weeks. Remember you heard it here first.
I think thats a definate possibility Malorn, the market is looking for a good excuse to correct! But 2- 3000 points would be more than a correction. I don't think our whole economy revolves around GM... I don't think they carry too much weight anymore and alot of thier demise is already factored in to the market. But it may be enough to cause some faint hearts... and I wouldn't be surprised if the talking heads whipped it up to bring things down back to the low 10200 area, if even that far. But few believe "as GM goes, so goes the economy".... its fairly good knowledge now that GM has thier own problems and that their problems are not really due to the economy per se but rather bad executive decisions. But Ford may be next if they are not careful!
That is where you are wrong. GM alone is responsible for more than one million jobs in the US. Put one million 'well-paid' Americans out of work and what do you think you would have? Instant depression. Remember GM is the largest automobile manufacturer in the world adn one of the largest manufacturers period.
I think any tanking of the economy would be very short term--maybe two weeks tops. Their financial position has already been factored into the price of the stock and I think everyone knows its a matter of when not if. If they wait things will only get worse. Ford and GM should declare bankruptcy so they can become more competitive. The biggest cost to them on each car sold is the retirement and medical benefits for the retirees. I do realize that the retirees get screwed but fixed benefit pensions should be illegal. Every corporation and government that promises fixed benefits at retirement will eventually have to declare bankruptcy. It would be much better to have a pay as you go system because at least the employees will have something.
I"m not sure as to the why.. I haven't investigated it yet.. but someone said GM doesn't even effect the market that much?... They just announced "wasn't it 30000 jobs?" to go, and shut down of plants.. the market didn't even whince.
