Markets just wandered aimlessly going nowhere, waiting for word about the stimulus package, probably tomorrow, & bank bailout II, maybe later.
Markets closed down small change & advancers were slightly ahead of decliners. While S&P 500 FINANCIALS INDEX was up only 1%, banks did much better on expectations that TARP II is only a few days away. Bank of America (BAC) & General Electric (GE), soared (12% & 14% respectively) on hopes Bailout II will be passed soon. The Alerian MLP Index was up .68 to 202.68. This was such a dull day, even oil was down only pennies.
Bernie Madoff agreed to a settlement for the civil suits. He is going to pay a fine & return money to investors, not clear where all this money will come from. His criminal problems continue but he is expected to cop a plea, his cooperation with the authorities will get him a more lenient sentance.
Bob Lutz, General Motors Vice Chairman, credited with leading the development of the Volt electric car & revitalizing vehicles such as the Chevrolet Malibu and Cadillac CTS, will retire at the end of 2009. At 76, he is a 46 year veteran, having worked for all 3 big auto companies. Because of the long his service, his retirement is understandable. However, some suggest that he may have been motivated by not wanting to work for "Congressional Motors" with restrictions on pay, corp jets, etc. If true, when applied to executives in their middle & younger years, this line of thinking could haunt auto companies (i.e. losing "good" people). But that assumes the companies survive.
General Motors’ Bob Lutz Will Retire at End of 2009
On Bloomberg TV, they estimated how much the bailout/stimulus packages will ultimately cost the US. The estimate was about $9.7T (that's T as in trillion) or the equivalent of 13 wars in Iraq & Afghanistan. The number included direct costs plus pledges (the latter probably accounts for most of the total). Just one of the "little" pieces was $130B to help GE's financial businesses while GE's debt continues to be rated AAA.
Tomorrow the Senate will vote on the $800B (whatever the number is) stimulus package. Votes have been lined up, it will pass. Then they will have to blend it with the House bill which is probably more generous, whatever that means. That process could take a few weeks, no simple matter.
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