Rick Newman
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Why Obama Should End the Bailouts
Continue reading… 11 CommentsNow that he's looked closely at the numbers, Barack Obama wants Washington to show some spending discipline. After his gargantuan stimulus package, that is. "We've got trillion-dollar deficits for years to come," he said recently. "We're going to have to bring significant reform ... to the overall budget process.... We'll have to make tough choices, and we're going to have to break old habits." (Transcript.)
Here's one way he could start breaking old habits: Cancel the second half of the $700 billion bailout package passed last year.
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Apple: America's Most Fragile Company
Continue reading… 16 CommentsForget about Apple's P-E ratio. If you want to know whether to buy or sell Apple shares, just gauge whether CEO Steve Jobs look gaunt or well-fed.
It's worth asking if there has ever been another major publicly traded company whose stock rose or fell based on the CEO's waistline. Wal-Mart did just fine when founder Sam Walton retired as CEO in 1988, and died of cancer in 1992. Exxon mints money regardless of who its CEO is. There hasn't been a Johnson at the helm of Johnson & Johnson since the 1960s, yet J&J is an exemplary Wall Street performer. Even Berkshire Hathaway, which is basically Warren Buffett's investing club, seems better insulated from the health of its CEO than Apple is. And Buffett is 78.
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Car Sales: What a Dismal 2008 Means For 2009
Continue reading… 17 CommentsNow that the annual sales numbers are finally in, it’s clear that 2008 was a horrendous year for nearly every automaker. Annual car sales peaked at about 17 million in 2006. Industry analysts used to think that a one-time dip to 14 million would be a catastrophe. In 2008, total sales fell below that, to about 13 million.
We all know who took the hardest hit: Detroit. General Motors’s 2008 sales fell 23 percent. Ford’s annual sales fell 21 percent. Chrysler, probably in the worst shape of all, endured a 30 percent plunge. To put all of that in perspective, consider that holiday retail sales – which were the worst in a generation – only fell by about 5 percent. And that’s expected to cause a flurry of retail bankruptcies in 2009. A Detroit-sized decline in retail would probably close half the malls in America.
