Today the Dow fell close to three hundred points, erasing whatever gains were made in yesterdays up day. The driver of today's fall was due to GM's auditors raising 'substantial doubt' about the ability of GM to survive without declaring bankruptcy.
Is anyone really surprised that the 'loan' given to GM and the propping up of a failing company has come to this? I am not surprised at all. All of the intervention and bailing out and ultimately 'propping up' of different businesses won't stop the inevitable. Look at AIG for another great example. They lost the market value equivalent of the entire McDonald's company in three months!
Some may say, "what about the auto workers? Their pensions are tied up to this company, if they fail what will happen?" Well here's the thing to remember: If a company is having trouble turning a profit, it might have something to do with those billions in pension paychecks they have to pay former employees. Perhaps the union bosses, instead of being mortal enemies of the very company that needs to exist for them to exist, should have taken this into consideration. What if our demands cause this company to fail?
I am not saying that it is entirely due to the unions, but what I am saying is that there are reasons this company is failing and the government is not capable of, nor have the Constitutional rights to do anything about it. This economic intervention needs to stop at some point, and it will not work. We can already see it unraveling!
The markets will move back up, but not until they have reason to. If the government just got the heck out of the way for once, the economic downturn would still be bad, but not nearly as prolonged and enlarged as it is with their intervention.
If you agree with me you won't like this: The White House is 'assuring' the American public they are working around the clock to address the GM problem.