Automakers May Get Money, New Bosses

The White House has let it be known that a deal to bail out the Big Three automakers might come as soon as later today, totaling perhaps about half of what the companies were angling for as recently as last week, or $15 billion to $17 billion in bridge loans. The news may be cold comfort to the CEOs of the Big Three, since certain members of Congress–namely Sen. Christopher Dodd (D.-Conn.), chairman of the Senate Finance Committee–have suggested that certain heads should roll, namely theirs. Or at least GM CEO Rick Wagoner, whom Dodd specifically mentioned as expendable on Face the Nation yesterday. A dollar a year, it seems, is a dollar too much in Dodd’s estimation. Ah, to be a fly on the wall during this meeting: the Wall Street Journal has reported that Merrill Lynch CEO John Thain is talking with Merrill’s board today about his bonus for the year, and that he’s asking for $10 million. The reasoning is that, unlike other Wall Street players in 2008, Merrill didn’t actually collapse, it only lost about $10 billion. Or he could be arguing that once you’ve lost $10 billion, what’s another $10 million? The Conference Board’s Employment Trends Index fell to 102.9 in November, down 1.6 percent from 104.5 in October. The ETI tracks eight different labor-market indicators, including the number of people filing unemployment claims for the first time, as well as survey results about the difficulty job-seekers have in finding employment. The index is down 13 percent from this time last year. “Thus far the U.S. economy has lost 1.9 million jobs and the declines in the ETI suggest job losses could very well surpass 3 million by mid-2009,” Gad Levanon, a senior economist at the organization, said in a statement. Some kind of direct action by the federal government to retard the rate of housing foreclosures seems to be in the offing. Though still six weeks away from occupying the Oval Office, President-elect Barack Obama said on Sunday, “We have not seen the kind of aggressive steps in the housing market to stem foreclosure that I would like to see…. If it is not done during the transition, it will be done by me.” But it’s certain to be a hard row to hoe, since the Office of the Comptroller of the Currency has found that more than half of borrowers whose mortgages were modified in 1Q08 to give them better terms were again more than 30 days overdue by the third quarter–53 percent, according to John Dugan, head of the office.