GM,Ford and Chrysler lead Dow lower

Automakers have been at congress the last few days asking for money. I have been someone who has said that the $700 billion bailout was necessary, but I do not like bailing out the automakers UNLESS they are willing to give some concessions. Number one is labour has to meet management somewhere along the line and new management, with some progressive ideas need to be installed. Let remember these problems didn't just come to light now. They have been lurking under the surface for some time, high gas prices and now a total collapse of the economy has put them front and center. New money will just delay the problem, what needs to be done is create more fuel efficient vehicles here IN THE U.S. Labour has to give some concessions on its benefits package and new management has to be installed as the old management has done nothing to change the situation. I know in my job we no longer receive a pension. There was no debate about it it was put on the company website saying...."As of Jan 1 2009 there will no longer be a pension plan in place for employee's". That was it, take it or leave it. I am not happy about it but given the current environment I would prefer to have a company able to function rather then one destined for bankruptcy. I also have a few Friends at brokerage shops who were asked to "donate some of their bonus back to the company to allow the company to grow in the future". They all did! My point is in bad times everyone needs to give up a little short term for longer term gains. I believe it and live it.

As for the economy it looks like it is getting worse....alot worse.

The Fed came out with it's Oct 29-30 minutes, here is a summary.

The worsening financial situation, the slowdown in growth abroad, and incoming economic data led the FOMC members to mark down significantly their outlook for growth.

Inflation was seen decelerating to "levels consistent with price stability" given the drop in energy prices and increased slack in labor and products.

The risks to growth remained weighted substantially to the downside, which explained the magnitude of the October rate cut and the view that "additional policy easing could well be appropriate at future meeting". Another 50bp cut in December maybe?

The FOMC downgraded its October economic projections, Real GDP Q4/Q4 growth is expected in the range of -.2/+1.1% in 2009 compared to 2.0/2.8% in the June FOMC projections.

The Fed is also looking for substantially higher unemployment (down 7 to 8% ) during 2009.

I am convinced that the Fed and Treasury will do everything in their power to get the economy on the upswing as soon as possible. One problem is their "lame duck" period waiting for Obama to take over and Bush to leave. Understandable Paulson doesn't want to do anything that the Obama government will undue in January, waiting is prudent....but just might be costly during this terrible economic time.

Good Luck and Good Currency Trading