Markets higher on auto bailout hopes

Stocks are already betting on an auto bailout package bill passing congress, even while its fate remains uncertain. Dow is up 93, advancers over decliners 3½-1 and NAZ is up 21. Indices I follow are generally up 1%, but Lehman High Yield Bond ETF is down pennies (it sells off for any reason or no reason at all). VIX pulled back a couple points, worries are down a tad.

Oil is also benefiting from the expected auto bailout package:

CLF09.NYM

...Crude Oil Jan 09

...44.30

.. 2.23 ......(5.3%)

GMAC has been unable to attract enough capital to become a bank holding company which would allow it to get help from the federal bank bailout program. They are scrambling to raise enough money from Fri to qualify for the program. If not, their future is uncertain or a kind way of saying they probably won't survive. It seems like any auto bailout program will have to include them as they their survival will be key to the survival of General Motors (GM).

•GMAC May Not Win Status of Bank Holding Company, Casting Doubt on Survival

The fallout from the economic collapse & very low interest rates is affecting many institutions. Money market funds are struggling to keep their interest rates above zero %, which is becoming increasingly difficult in these times of low interest rates. Modest expenses could drag some interest rates in negative territory which may bring a major outflow of funds.

•Money-Market Fund Yields May Fall to Less Than Zero on Fed Cut, Crane Says


The relief rally from the auto bailout package probably will not have legs. This buys them only 90 days to get their houses in order, a tough task. GMAC is shaky unless it's included. Meanwhile guidances for 2009 will start coming and they are not expected to be pretty, as was the case for 3M (MMM) on Mon.