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Russian economy is faltering under the strain of the global financial crisis. The stock market is plunging, with the RTS Index down 19% on October 6, 2008, and the market down 60% since the high in May, 2008. Construction spending is winding down. Th economy growth rate was 8.1% in 2007 but its slipping. If oil prices hit $50 and they were already at $78 on October 10, 2008, then says Anders Aslund at the Peterson Institute for International Economics in Washington, there will be a sharp decline in the growth rate. Moscow analysts say the growth rate could drop to 4%. For Americans Russia may seem remote excpt for investors. But in a global economy there are connections to emerging markets and Russia is one big emerging market, next to China, India and Brazil. When General Motors shares dropped 31% and Ford's 22% on one day on October 9, 2008, the news that spooked the markets was ofcourse a credit watch and questions about liquidity from Standard and Poors rating agency, but alsoimportant was that the one bright spot for GM and Ford in Europe and in Russia in particular was disappearing as GM sales declined in Europe and in Russia. In the prior 12 months GM had seen sales jump by 40% in Russia giving it 10% of a car market that passed Germany recently as the largest car market in Europe. Couple of important things about Russia. Russians today are big spenders, savings are small and Russians do not trust their banks so bank deposits are very low. Household deposits are equivalent of 17% of GDP, compared with 45% in the USA. Only 4% of Russians trust commercial banks according to a poll by National Financial Research Agency in Moscow. So Russia depends on the outside world for much odf the cash flowing through its financial system. Foreigners purchased two thirds of the $170 billion in bonds isued by Russian companies and foreign banks put up half of the accumulated $900 billion in bank loans including almost all longterm debt estimates Moscow investment bank Troika Dialog. With global credit markets in a lockdown mode Russia is simply running short of cash. The government has $560 billion in foreign exchange reserves from years of high oil prices plus $160 billion in two sovereign wealth funds with most of this money in fixed income securities abroad as a rainy day cushion should oil prices tumble. On October 7 the governmet announced $36 billion in emergency loans to Russian banks following earlier pledges in September of $150 billion in loans and relief for Russian companies in danger of defaulting on international debts. One danger here is that about 55% of outstanding corporate loan are of maturity less than 1 year. One of Russia's largest developers Mirax Group is putting 50 projects on hold as bank financing for developers has almost ceased. On the other hand Russia's financial sector is relatively small and the credit crisis cannot hurt Russia as much as it will USA ad Europe. Bank loans account for 10% of corporate finance and the bond market is only a decade old, so about half of all capital investment by companies comes from retained earnings. And Russia has huge needs for investments in infrastructure after years of underinvestment, a stable political structure, an educated workforce, and an economy that is just getting started. As Secretary Paulson answered questions after the G7 meeting October 10, this was another point on the minds of the secretary and questoners, the hope that emerging markets like Russia, India, and China would continue to grow though slower than before, even as the US and Europe slipped into a long recession, and provide a little cushion to the global economy....

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The GM restructuring plan of the Obama administration, as GM enters bankruptcy, was designed so that the UAW plays a constructive role in building the new GM. There is a wage freeze, and a no-strike clause until 2015. The union gets a 17.5% ownership of GM, which helps to align the union's interests in improving the share price. At the same time the unions health fund's shares are novoting, so that the union does not make decisions for the company. At Chrysler even though the union has 55% ownership shares, it has only one person on the Board. In the same way the union has a limited role in running GM. The idea is to get the union out of the us vs. they habits of the last 50 years.

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If he now believes it is a structural shift and not a cyclical one, if he thinks consumer behavious is changing, and rapidly, CEO Wagoner of General Motors owes his shareholders and other stakeholders like the company's own employees and loyal customers an explanation of why it took so long for him to arrive at this conclusion. And why is the Hummer still sitting there in GM's product line, and the Chevy Suburban, vehicles that never belonged once the craze for bigger vehicles was past its peak in 2006 and 2007, some 1-2 years prior to today.

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A detailed account on how Corzine ran MF Global, the motivation behind his decisions, and how his plan unraveled. The initial motivation for his decision to invest heavily in European sovereign bonds was to generate profits quickly to preserve MF Global's credit ratings. During his days as a bond trader at Goldman in the 1980's and 1990's Corzine was known to make risky bets to generate large profits. The same strategy failed to work in the highly volatile environment of 2011, when even the U.S. sovereign bond credit rating was downgraded.

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With China's automobile market declining for the fifth month in a row, and trade tensions rising, it now appears that carmakers such as Ford expanded too quickly in the Chinese market. Ford, Peugeot, and Hyundai appear to have poorly times their expansion in China, expanding at the tail end of the Chinese boom just ahead of the new Trump administration's efforts to challenge China's lopsided trade balance.  It has become so bad that this report shows workers at a Peugeot factory in China spending their days washing floors and attending Communist political study sessions at work. At a Ford plant workers shifts are reduced to a couple of days a month. Sales grew 3% in 2017 and declined 2% in the first 11 months of 2018, after increases of 14% in previous years taking the market to 28 million in a dizzying ride as it surpassed the U.S. sales of 17.5 million. Overcapacity is a problem in China with the aggressive expansion. There is capacity to make 43 million cars, but will produce 29 million in 2018, according to PwC, consulting firm. Ford meanwhile put in a new plant in Harbin in 2017, expanding its capacity to 1.6 million a year, but sales peaked at 1.27 million in 2016, and are down 6% in 2017, and 34% in 2018 to about 700,000. While there are no layoffs some workers are making only $220 monthly, forcing them to take second jobs as cab drivers or couriers. Suzuki decided to quit in 2018 exiting China entirely just so it would not pile up losses in what is now a market that is way overblown from the boom years. Electric vehicle production in the pipeline of about 7.5 million vehicles will compound this problem further with 32 new plants planned by 26 firms.   ...

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A former WSJ Detroit Bureau chief says that if GM is to receive help it should go into government receivership, old management and the board have to go, shareholders would lose value as shares become worthless, and old union contracts have to go, and only then would the industry get back on its feet. The same should happen for Ford and Cerberus, and the shares becoming worthless would take away the control that the Ford family has of the company, giving it a fresh start with new management. He is saying what many have thought true for a long time, management of these companies have failed Detroit and the midwestern states for a long time, for decades in which management has simply protected its own interests and avoided taking the steps needed for renewal of the companies. The few changes have simply come so late and are inadequate in this crisis.

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The view of a Prof. of Finance at New York University's Stern School of Business on the auto industry and the destruction of capital. About $110 billion of destruction of capital between 1980 and 1990 for GM and Ford, and the destruction of $182 billion in capital that was invested in GM between 1998 and 2007. From a Finance point of view this is society's capital that can be better invested. The total $465 billion invested in GM and Ford between 1998 to 2007 says Yermack could have purchased all the shares of Toyota, Honda, Nissan and VW. The job losses overstate the situation he says, as jobs would be created in other auto factories which expand as Detroit contracts, which is already happening as sales decline is less steep at other automakers such as the Japanese. Regarding the proposals to ask the automakers to build environmentally friendly cars with serious fuel efficiency, he says its like asking the cigarette companies finance cancer research, considering their lobbying efforts to gut serious conservation or environment friendly legislation....

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Micheline Maynard gets diverse views on bankruptcy filing and bailout for General Motors and Ford. Out of hundreds of comments, (looking at the comments based on reader recommends from 70 to 15 readers recommend range), with over 90% of comments favoring no bailout money for automakers without coming to grips with problems and replacing management and the board, it is clear that readers cite in order of importance the following against the automakers. Complicity with Congress and lobbyists in keeping fuel efficiency low. This sent billions of dollars to mideast nations for oil, which in turn bloated liquidity here at home, helping fuel the cheap credit era in the US and building consumer and mortgage debt. This lack of conservation in gasoline use burdened economies around the world with high oil prices, and then hit the car companies in Detroit hard as sales of large vehicles collapsed. Its entirely the Detroit carmakers own shortsightedness they say. Second most mentioned is bad management, and bad decisions and arrogance. Third the unions bloated contracts, and bankruptcy as the only way to get rid of them. Fourth failure to make green cars. Fifth the lack of any idea what $25 or $50 billion given to GM and Chrysler would get the taxpayer, because if the market has collapsed then more money will be needed each year to pay salaries and contiinue operations in 2009, followed by 2010. The market has gone from 16 milllion to a 10 million rate in October 2008, if it drops to 8 million in 2009, it would require the companies to shrink by 50% as a rough guess, and the union contracts just negotiated would be totally inappropriate for the new market and financial conditions. Getting rid of those union contracts could only be done in a bankruptcy filing, as in bankruptcy everything would have to be done from scratch. Whereas in a bailout the unions would simply refuse to cooperate as they have done in the past. This is also what readers are saying when they say let the market economy work. A look at the reader comments on similar articles in the Washington Post and the WSJ also show an overwhelming number of readers not favoring taxpayer money for automakers without serious changes, and bringing a completely new management and board to get things off to a fresh start, with no legacy from the past. ...

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U.S. auto companies are steadily reducing the incentives that reduced profit margins for many years. Cash back offers of various kinds to subsidized leasing programs are being pared back steadily in a determined effort to raise profit margins by Ford Motor, GM and Chrysler. The average incentive was $2,124 per vehicle in October, which was 1.4% below the level the prior year, according to Edumnds.com. The increase in demand helps automakers. The annualized rate for sales in 2012 was 14.4 million. The figures for incentives by automaker released by Edmunds.com show GM with the highest figure of $3037 per vehicle in incentives for October 2012, followed by Ford Motor at $2788, and Chrysler at $2683. The gap between U.S. car makers and the Japanese has narrowed, with Toyota at $1621 and Honda at $1420 per vehicle in incentives for Oct. 2012.

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The risks companies face in having members of Boards serve for long periods of time, sometimes decades. The situations and the world changes, board members "become stale," or worse fail to question and exercize intelligent oversight over company decisions preferrring compromise to constructive criticism.

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Interview of Mary Barra, new CEO of U.S. auto company GM by editors and reporters of the NYT.

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Women in senior management positions at GM include Mary Barra, Melissa Howell, Anne Larin, Victor McInnis, Grace Lieblein, Alicia Boler-Davis. Howell is senior vice president of global human resources. Leiblein, vice president for global purchasing. Boler-Davis, senior vice president for global customer experience and quality. Barra is the new CEO in 2014. Here Leiblein describes her decision as chief engineer for large crossover utility vehicles- to leave a gap at the bottom of the left foot rest making room for female drivers wearing a high-heel shoe. Barra says she concentrates on doing a good job and doesn't count the number of women in the room at meetings. Other female managers says women have to put in more than men to be recognized.

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The Buick Regal is turning out to be just the car for going after younger buyers, and going after Gen Y buyers, buyers who have appeared so elusive for GM. It handles like European cars in its ride, and this reviewer compares it to a Peugeot. It was almost an accident in the way it was developed. It started as the development of a global, midsize front-drive platform at GM's Opel division in Russelsheim, Germany in 2004. At the time it was to be the next generation Saturn Aura for the US, but with Saturn closed down, it was renamed Buick. In Germany its called Opel Insignia. In China where Buick sales are growing rapidly, this car is called a Buick. This car is getting great reviews and is a part of the new rebirth of GM.

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Ford and GM employ 120,000 workers in Europe and sell roughly 4 million cars there. GM sold nearly a fourth of the 9.37 million cars it made worldwide in Europe in 2007. And 60% of these cars are small cars like theFocus and Fiesta in Europe for Ford and the Corsa and Astra in Europe for GM. The presence of a gas tax may be what makes Europeans choose smaller cars as gasoline is expensive in Europe. What makes them profitable in Europe is they are generally sold with all the features of bigger quality cars and command higher prices so that small does not mean cheap. But is there any reason that given the experience of Americans with gas prices, and a culture of energy conservation among younger and newer customers. apossible gas tax that funds public transportation projects, and the poor state of household finances, that the better appointed smaller cars that are popular in Europe cannot make their way into American homes. With all the experience with small cars in Europe are GM and Ford simply lacking both the vision and the courage to try something new with these cars when their bets with larger cars have failed....