In Today's Headlines:
Tue, July 15, 2008
Reuters - Bernanke, Paulson Say Stability Critical Goal Amid 'Difficulties' - Bernanke and Paulson said stability remains a top priority in separate remarks before the Senate Banking Committee. The Fed chairman highlighted the "numerous difficulties" the economy faces, adding that the inflation outlook is "unusually uncertain." 2:38 p.m. WSJ
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NEW YORK (Reuters) - Weak retail sales and a rise in producer prices at their highest annual rate in 27 years provided further evidence of "stagflation" in the U.S. economy on Tuesday.
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LOS ANGELES - Police ordered angry customers lined up outside an IndyMac Bank branch to remain calm or face arrest Tuesday as they tried to pull their money on the second day of the failed institution's federal takeover
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DETROIT - General Motors Corp. said Tuesday it will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.
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I find today's headlines to be very disturbing. For example, GM's "cost cutting" strategy. Today's announcement by the Chairman of GM, states that their plans include the following:
-Reducing U.S. and Canada salaried headcount in 2008
-Beginning in 2009,
eliminating health care coverage for U.S. salaried retirees over 65, partially offset by pension increases
http://media.gm.com/servlet/GatewayS...74&docid=47124
Because GM focused on short-term profits from SUV and truck sales, retiree benefits are now being cut. While GM is closing plants, Toyota is converting their truck plants in the US to small vehicle manufacturing facilities.
I fear we are becoming too short-sighted as a nation, with an unhealthy focus on immediate gratification that is jeopardizing our future. For shareholders, short-term profit, the next earnings reports and not the long-term, big picture.
Unfortunately some people do not realize (or maybe care) what is happening till it hits home. I truly feel badly for the GM retirees who will be effected by these cost cuts.