The Big Three Bailout

I'll keep things short today. The Dow Jones Industrials stayed steady for most of the day at around 8500, but in the final hour plus, sank to 8376, a drop of 215 (2.5%) for the day. Canada was also down by the same percentage, but world markets remained relatively stable.

At Senator Chris Dodd's (D-Connecticut) Banking Committee six hour hearing today, he gave the automakers some hope that their requested 34 billion request will pass. However, Republicans are heavily against the bailout and President George Bush is adamant that throwing good taxpayers money at bad Detroit failure could not be justified. The bombshell at the hearing was that Moody's Economic.com chief economist, Mark Zandi, testified that the true cost of this bailout will eventually range from 75 billion to 125 billion.

It was almost comical that, having faced the wrath of Congress last week for using expensive corporate jets, all three CEOs drove their cars from Detroit to D.C., and were planning to drive back. What a waste of their time to prove a point. But that's the way the game has to be played, I guess.

The Congress will vote next week on the rescue plan. The odds somewhat favor the Republicans, with a possible Bush veto, to deny Detroit. However, there is almost certain assurance that the Democratic Congress and White House will pass something early next year.

Remember yesterday when my blog predicted 30/barrel oil by the Spring of 2009? Well, the Dated Brent Spot price is now at 41.38/barrel, a drop of 3.38 today. Can you believe it? Gasoline futures dropped below 1/gallon on the New York Mercantile Exchange. Gasoline deliveries in January fell 7% to 97 cents/gallon. I fear the worst for ALL renewable energy projects, even though we know that crude oil will zoom past 100/barrel, maybe as soon as late next year, but, certainly, in 5 years. Let us not be deceived again, please. For the record, gold fell 3/toz to 768.

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