Be Afraid

Motown Blues

Failure of auto bosses to win bailout sinks market.

Wall Street had a wobbly opening and is looking at yet another day of trepidation, with the Dow slipping 150 points in early trading. Yesterday the index sank to its lowest level in more than five years, as a bailout of Detroit's Big Three automakers stalled on Capitol Hill, and another round of downbeat economic news further disheartened investors. The Dow Jones industrials fell more than 400 points. The heads of General Motors, Ford, and Chrysler failed to convince lawmakers of the need for a massive infusion of cash to prevent millions of layoffs, stave off bankruptcy, and stabilize the companies. But the collapse of any one car maker has a devastating effect on the economy as a whole, as its lengthy list of suppliers would suffer and multiply the effect of the collapse. And the bad news for Detroit was matched by other selling. “It’s a toxic mix when everyone that borrowed money has to unwind their positions and sell assets,” explained Thomas Priore of ICP Capital, New York.