Ellington

Stocks plunged in the final minutes of trading Thursday, sending the Dow Jones industrials down more than 675 points, or more than 7 percent, to their lowest level in five years after a major credit ratings agency said it was considering cutting its rating on General Motors Corp. (GM) The Standard & Poor's 500 index also fell more than 7 percent. The sell-off came as Standard & Poor's Ratings Services put GM and its finance affiliate GMAC LLC (GOM) under review to see if its rating should be cut. GM has been struggling with weak car sales in North America.

The action means there is a 50 percent chance that S&P will lower GM's and GMAC's ratings in the next three months.
S&P also put Ford Motor Co. (F) on credit watch negative. The ratings agency said that GM and Ford have adequate liquidity now, but that could change in 2009.

Previous Comments

ID

138876

Comment

This timeline of the Great Depression is very interesting reading. 1920s Individual worker productivity rises an astonishing 43 percent from 1919 to 1929. But the rewards are being funneled to the top: the number of people reporting half-million dollar incomes grows from 156 to 1,489 between 1920 and 1929, a phenomenal rise compared to other decades. But that is still less than 1 percent of all income-earners. 1922 The conservative Supreme Court strikes down federal child labor legislation. 1923 President Warren Harding dies in office. Calvin Coolidge, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government. Supreme Court nullifies minimum wage for women in District of Columbia. 1924 The stock market begins its spectacular rise. Bears little relation to the rest of the economy. 1925 The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I. 1928 Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. The boom is largely artificial. 1929 Herbert Hoover becomes President. Annual per-capita income is $750. More than half of all Americans are living below a minimum subsistence level. Backlog of business inventories grows three times larger than the year before. Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent. Stock market crash begins October 24. Investors call October 29 Black Tuesday. Losses for the month will total $16 billion, an astronomical sum in those days.

Author

DonnaLadd

Date

2008-10-09T17:06:31-06:00