My screen has been almost all red throughout the day. It still is,
although the Dow industrials index is mid-way between the high and low
of the session. Do not look for quick relief. Not in a month...and
maybe not in a year.
There is no precise index of how awful the facts are. Just look at the headlines.
Take this morning's news.
1. American Express will now be a bank. I thought it was a credit card company. Why will it become a bank? To be able to borrow more money from the feds and at lesser rates. AmEx just wrote off 6% of its credit card loans. Eric Dash tells us in this morning's Times that GMAC, the financing company partly owned by GM, and General Electrics financing subsidiary are also considering becoming banks. Why? To get into the line for easy bucks. Maybe TNR should become a bank. Still, we won't put off 10% of our work force like AmEx. Maybe the Treasury's cash will pay the severance.
2. AIG yesterday reported a $25 billion loss. The feds again stepped up to the plate, this time with $150 billion at lower rates and easier terms. Read the story by Mary Williams Walshin today's Times.
3. GM shares were as low as $2.75 today, after having reached its lowest price since World War II yesterday. Rob Curran reported in today's WSJ that Deutsche Bank expected GM stock to go to zero.
4. Fannie Mae lost $29 billion in the third quarter. Right up there with AIG. According to Bloomberg News, one analyst called the news "gruesome."
5. Circuit City went bankrupt. DHL is downsizing to...almost nothing in America.
More bad news tomorrow.