With all the focus on what can objectively be called a turning point in American history, here’s a little commentary on other topics of note:
- As Toyota surpasses GM as the #1 automaker in the world – a position GM has held for 77 years – one can only hope that GM is focused on getting even smaller as fast as it can. Too many brands, too much internal duplication, too many inefficiencies. They can shoot at regaining the #1 spot down the road. The news that Fiat is getting 35% of Chrysler just for the cost of retooling a plant, shows how desperate the US auto industry is.
- Today’s big market drop should not surprise anyone who has been reading this blog. As reported last week, financials still have some of their biggest problems in front of them as the full impact of the real estate bubble popping is felt and as the painful process of deleveraging works its way through the system. My trading range for the S&P still holds for now: around 750 to around 950. Stayed tuned. Maybe a little honesty by all parties will lead to the dramatic actions needed to fix the credit markets: nationalize the big banks, strip off the bad assets, and break them up into smaller banks that are not too big to fail.
- “Hope” is about all the EU’s finance ministers have left according to this article in the WSJ. Things look bleak indeed in Euroland, which reinforces my “buy American” outlook for now (American securities, that is).
- One of my signposts for recovery, housing market stabilization, looks as far out as ever. Via Calculated Risk, the National Association of Homebuilders today stated that they expect home prices to decline another 29% and new home sales to drop 14%. Ouch.