Funny

I found this article hilarious. Basically GM is saying that thanks to the governments multi-billion dollar they may just survive and as a result the US dollar has moved stronger...

Honestly I can't see how Detroit can survive without the US government bailing them out for the next 3 years at least - at roughly US$12bn dollars a year...

Surely it's not that complicated - the number of unemployed are going to go up, corporate profits and presumably corporate activity are going to go down. Guess what - people aren't going to buy new cars for at least a big portion of 2009 and if they are going to buy they're going to buy second hand or "cheap and cheerful".

You can't change this by throwing billions of US dollars trying to free up credit markets - people are petrified of losing their money or getting wound up in further debt. Guess who is going to benefit - the Asians with their cheap and efficient cars that they will STILL be able make cheaper - WHY? - because the US culture of "expensive labour" will still persist. With all due respect - if you have worked for 10 years of your life at a certain remuneration level and the government offers you a job at 1/3rd of that level you're going to think very carefully before lowering yourself to that level ESPECIALLY when the government is taking every step possible to protect you from yourself and throwing money at the credit markets to get you spending more.

A bit of economic stimulus will be great in the longer term but serious ly US$8 trillion dollars (can you even begin to comprehend how much a trillion is?!) has been thrown at this problem and it still can't remove the F E A R in the markets.

Dunno - interesting times ahead but "saving" Detroit isn't going to keep the US world afloat....