Bernie Madoff received a sentence of 150 years. Experts had been predicting that the orchestrator of an enormous Ponzi scheme would get only 30 years. Many famous people were caught up in Madoff's fake financial web. ITN reports that cheers broke out in the court room when the sentence was announced.
The U.S. Supreme court has delayed the sale of Chrysler to Fiat. The Supreme Court wants more time to consider opposition to the sale by three Indiana state pension and construction funds. Bloomberg reports the Fiat's CEO Sergio Marchionne says they won't walk away from the deal despite a June 15 deadline.
Moments after her order was issued, Fiat Chief Executive Officer Sergio Marchionne said in a telephone interview that the company will "never" walk away from the deal. The company previously set a June 15 deadline for completion.
A federal appeals court in New York last week allowed the sale, while putting its decision on hold until 4 p.m. today to let opponents including Indiana pension funds seek Supreme Court intervention.
Ginsburg's one-sentence order today said the bankruptcy court orders allowing the sale "are stayed pending further order" of the Supreme Court. That language leaves open the possibility that the justices might clear the deal to go forward in the next several days.
Bloomberg's article says the Obama administration has downplayed concerns that the deal won't go through. A top Obama administration lawyer has also urged the Supreme Court to allow Chrysler's bankruptcy to proceed.
GM and Citigroup Removed From Dow Jones Industrial Average
Bloomberg reports that General Motors Corp. and Citigroup Inc. have been removed from the Dow Jones Industrial Average and replaced by Cisco Systems Inc. and Travelers Cos.
GM, which filed for bankruptcy protection today, and Citigroup, the recipient of $45 billion in taxpayer aid, became the first companies since American International Group Inc. in September to leave the 30-stock average. Their shares have lost more than 90 percent since the start of 2007.
By replacing GM with Cisco, Dow Jones & Co. has removed automakers from the best-known benchmark for U.S. stocks, saying in an e-mailed statement that computers are as central to the economy as cars were in the previous century. Citigroup, until last year the world’s biggest financial firm by assets, is being replaced by a company it jettisoned in 2002 and that was once run by its former chairman, Sanford "Sandy" Weill.
"This announcement brings front and center the challenges facing the U.S. economy as it strives to remain competitive," said Alan Gayle, director of asset allocation at Ridgeworth Investments, which manages $60 billion in Richmond, Virginia. "The Dow Jones Industrial Average is becoming less of an industrial average. It's trying to reflect the broader economy."
GM's shares recently fell below the 75 cent mark and Citigroup has traded below $5 a share since mid-January.
OPEC has decided not to change its production output during its meeting earlier this week. It wasn't a surprise to oil analysts. OPEC cut production last fall. Oil prices have been rising lately as the world hopes for an economic recovery. A UPI story says there is concern an oil price push could threaten a world recovery. However, it still remains to be seen if the economy really is recovering - job losses continue to be very high.
The Federal Reserve said today that the pace of the economic attraction is slowing. The Federal Reserve says that interest rates will remain exceptionally low to ensure recovery. The Fed said this despite the fact that the GDP fell 6.1% in the first quarter. The outbreak of swine flu is a new wild card that makes the economic future somewhat unpredictable. There's also no sign that jobs or housing prices are starting to recover. These facts make the Fed's optimism seem premature.
Stocks have rebounded lately. The Dow is back above 700 and the S&P is closer to 800 than 700. It was just two weeks ago when analysts were discussing the possibility of the market heading below 6,000. A Wall Street Journalarticle discussed the possibility of the Dow sinking below 5,000 or the S&P going below 500 with several analysts saying it was possible.
While Silvant sees the S&P staying in a range of 650 to 750, a decline to 500 is "definitely possible," Mr. Guinther says.
A level of 500 on the S&P is "possible, but I wouldn't put it in the realm of probable," says Thomas Lee, chief U.S. equity strategist at J.P. Morgan. Mr. Lee on March 2 removed a tentative "buy" recommendation he had placed on the S&P in February.
For Mr. Lee, the S&P at 500 "would imply that we are now in a period similar to April 1932 -- the final stages of a bear market."
Between April 8, 1932, and July 8, 1932, stocks fell 34% -- a little more than what it would take to get the S&P to 500.
A level of 500 would take declines for the S&P to 68% since its October 2007 high, compared with the peak-to-trough depression-era slump of almost 90%.
It's certainly possible the stock market could see lows again. We haven't really had any sectors reporting positive growth that would kick the market out of its bearish cycle.
Here's a long but very good cartoon animation that explains the credit crisis and how low interest rates, leverage, CDOs and sub-prime mortgages led to the problems on Wall Street. It was created by Jonathan Jarvis for his thesis work in the Media Design Program, a graduate studio at the Art Center College of Design in Pasadena, California.
The Dow and S&P 500 have falled to levels not seen since the 1990s. It's the Dow's lowest close since May 1997. Both the Dow and S&P 500 lost over 3% as they plunged to new lows. The Nasdaq lost nearly 4% on the day. Concern about the strength of the economy continues to drive stocks downward. Here's a look at the numbers for today.
Wall Street Journal Sees Economists Growing Less Optimistic For Quick Recovery
An article in the Wall Street Journal says that economists hopes for a recovery in the second-half of 2009 are fading fast. Some economists now see declining growth through the end of the year.
The average forecast now sees growth in the third quarter at 0.7%, less than half the rate expected last fall. The fourth-quarter picture has also darkened, but just slightly, to growth of 1.9% from the 2.1% seen in November. Five economists see growth declining through the fourth quarter of 2009; they say the current consensus outlook, which says the recession will end in August as GDP growth returns positive, is far too optimistic.
Some of the more pessimistic economists believe the increase savings habits by consumers and the tighter lending habits of bankers are going to prevent a quick recovery.
"The consensus is usually late to the party," said Brian Fabbri, chief economist at BNP Paribas, noting that he was one of the few to forecast the current recession two years ago. Now, he is one of the five who sees GDP declining through the end of 2009, along with Joshua Shapiro, chief U.S. economist at forecasting firm MFR Inc., Paul Ashworth of Capital Economics, Swiss Re chief U.S. economist Kurt Karl and retired Vanderbilt University professor J. Dewey Daane.
"We're in trouble," Mr. Fabbri said. "We don't have sufficient economic plans at present to resolve the banking system or the financial crisis, and the stimulus package seems loaded for 2010." He added that the global nature of the downturn along with U.S. consumers' increased saving and lenders' tightened standards all stand in the way of a quick recovery.
There hasn't been any letup in the pace of the layoffs either so that should mean problems for consumers are going to get worse before they get any better.
Investors had been expected a grim jobs report but news that the economy had lost another 500,000+ jobs and that unemployment had climbed to 7.2% was too much for the market. The Dow fell 143.28 points and the Nasdaq fell 45.42 points. President-elect Barack Obama has been out trying to interest Congress in his plan to save the economy.
Apple Shares Rise Following Steve Jobs Health Announcement
Apple CEO Steve Jobs finally addressed concerns yesterday about his obvious weight loss. Word that Jobs would not giving the keynote at Macworld raised concern that the Apple CEO was in ill health. Jobs wrote a letter explaining that his weight loss has to do with a hormone imbalance. Steve Jobs said he will remain CEO during his recovery. A letter from Apple's Board followed saying that they support Steve Jobs. Investors took the news in a positive way. Apple shares traded up over 4% on the day and closed at 94.58. You can see a stock chart here.
Barack Obama learned that there will not be a stimulus plan ready when he takes office. Obama also says the economy is bad and getting worse. He began crisis talks with congressional leaders on emergency action on Monday and has recently announced plans for significant tax cuts - although the details about the tax cuts are sketchy. Obama also had to deal with Bill Richardson's decision to withdrawal as Commerce Secretary because of an ongoing pay for play scandal.
Little Rally on Final Day of Trading Does Little to Modify 2008's Huge Losses
Markets closed up for the final trading session of the year. The Dow climbed 108 points and the Nasdaq rose 26 points. The positive end to the year did little to change the overall pattern of 2008 which was the worst year for the Dow since 1931.
Mr. de la Villehuchet, 65 - the director of a hedge fund that had $1.4 billion invested with Bernie Madoff - was found dead in his Manhattan office reports DealBook.
Mr. de la Villehuchet, 65, was pronounced dead Tuesday morning, and a New York City Police spokesman, Paul Browne, told DealBook that he had apparently committed suicide. He was found with wounds to his arms, with one leg propped up on the desk and a trash can nearby to catch blood. (Read more about Mr. de la Villehuchet here.)
He had been trying to recover the money that Access International raised in Europe and invested through Mr. Madoff’s business, according to La Tribune, which first reported the news, citing an unnamed source.
The name of the hedge fund was Access International Advisors LLC - they had called the news of Madoff's arrest a "shocking development" when the news broke earlier this month. NBC has a brief news report on the apparent suicide in the clip below from Hulu.
The U.S. Supreme court has delayed the sale of Chrysler to Fiat. The Supreme Court wants 
Bloomberg 
Apple CEO Steve Jobs finally addressed concerns yesterday about his obvious weight loss. Word that Jobs would not giving the keynote at Macworld raised concern that the Apple CEO was in ill health. Jobs 