U.S. Economic/Financial News
GM Calls Off 'Alliance' with Nissan-Renault
General Motors CEO Rick Wagoner announced Oct. 4 that the board of directors unanimously rejected the structure of an alliance with Renault and Nissan, adding it would have been a "distraction" to GM's current restructuring. In a joint statement, the automakers said the talks had broken down because of a disagreement over whether the financial gains from a tie-up would be equally shared, as well as how large those savings could have been. GM had demanded that Renault-Nissan pay it a "control premium" in return for a 20% stake in GM, warning that the Franco-Japanese alliance could have blocked GM from forming "other alliance opportunities."
Preparatory to ending the talks, GM's board of directors took defensive moves to block hostile action/board takeover by Kirk Kerkorian. One was to change its corporate bylaws to require any shareholder to alert GM management before soliciting other shareholders to support an action, i.e., to thwart a sneak attack. The GM board also adopted a majority voting rule for uncontested elections of directors. And it rejected a proposal to allow small groups of shareholders to gain larger voting rights, based on the shares owned, warning it "could create the potential for small groups of stockholders to overcome the interests of the majority."
Moody's: Housing Prices To Decline for Several Years
The gloomiest report yet for the U.S. housing market recalls the dark ages of the national economy, according to Broderick Perkins of RealtyTimes Oct. 5. The report is from Moody's Economy.com, called "Housing at the Tipping PointThe Outlook for the U.S. Residential Real Estate Market." Housing price declines in some markets could reach 20% in 2007. The median sales price for an existing home will decline by 3.6%, marking the first full year's decline since the Great Depression. Over 25% of metropolitan areas will probably see declines in housing prices by fall of 2007.
Areas of greatest decline will prominently include both coasts of the United States. California and the New York City areas, plus Florida and the Northeast Corridor, will be hard hit. The top ten areas heading for a hard landing are:
* Cape Coral, Florida: 18.6% (decline from peak price)
* Reno, Nevada: 17.2%
* Merced, California: 16.1%
* Stockton, California: 15.7%
* Sarasota, Florida: 14%
* Naples, Florida: 13.8%
* Tucson, Arizona: 13.4%
* Las Vegas, Nevada: 12.9%
* Chico, California: 12.6%
* Fresno, California: 12.5%
Buy a Governator Cheap, at Wal-Mart
Wal-Martwhich only a decade ago did not make election campaign contributions at allhas now passed GE as the top corporate contributor, through its executives and other vehicles, to Federal-office campaigns, with over $945,000 contributed in the 2006 election cycle, The Oct. 2 Business Week reported. The global slave-labor outfit is also now at or near the top in contributions to state campaigns, having given $1.25 million in this cycle in the states.
Wal-Mart is hoping its largesse will 1) stop minimum wage bills from passing on the state level; 2) stop "Wal-Mart bills" requiring comprehensive health-care coverage by large employers in states; and 3) stop enforcement against Wal-Mart sites for such labor practices as hiring illegal immigrants, locking employees in at night, etc.
California Gov. Arnie Schwarzenegger is Wal-Mart's top beneficiary nationwide, receiving $22,300 in contributions to his reelection campaign, and $200,000 in contributions to his package of fascist ballot initiatives which were voted down in November 2005. This prompted Lyndon LaRouche to comment, "Ahh! Looking for a cheap politician? Go to Wal-Mart, buy Schwarzenegger!"