Stocks to plunge on auto sector worries, global economy
The Obama administration didn't find the plans submitted by General Motors and Chrysler acceptable to receive more federal bailout money. This may dramatically reshape the auto industry as the administration is now considering structured bankruptcy plans for the two automakers.
While the White House pushed out GM's CEO Wagoner but allowed Chrysler's Nardelli to keep its job, it gave Chrysler 30 days to forge a partnership with Fiat if it expects to receive additional government assistance. Further, the task force has determined that neither company is viable. But in a last effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving and deserves more taxpayers money. President Obama is set to make an announcement at 11 a.m.
Not just the auto sector needs bailing out. Of course, the financial industry is still in trouble. U.S. Treasury Secretary Timothy Geithner said some financial institutions will need substantial government aid.
Globally, stock markets fell sharply Monday amid mounting pessimism surrounding this week's G-20 meeting of leaders. As more bad news from the global banking sector and the U.S. auto industry hit the wire, world stocks plunged.
The G-20 meeting will start Thursday in London, but while there may be much talk of unity and promises of regulation, what investors had hoped -- that they will agree to a coordinated fiscal boost -- now appears as if it may not happen. As a result of these concerns, oil prices tumbled Monday to below $51 a barrel.