Some news for investors

TJ wrote:Imagine, In less than 6 months the Obama administration has virtually natioanalized the banks and the auto industry and expectations are that the health care industry will be nationalized this summer. You could make the case that this is a total nationalization along the Fascist model.

"There is even a risk of a double dip, a W-shaped recession at the end of next year," he said, a combination of rising oil prices, rising public debt and increases in real interest rates, rising concerns about inflation and the expiration of a number of tax cuts in the United States.

The fear dogging homeowners and investors alike is that April's record lows in mortgage rates may have come and gone. The stock market has rallied since early March on the assumption the economy will rebound later this year.

Federal Reserve Chairman Ben Bernanke has been calling early signs of economic stabilization "green shoots" — and one of those shoots was a pickup in refinancing activity caused by tumbling mortgage rates.

But mortgage rates have rebounded sharply over the past few days as the nation's growing debt raises concerns that government-backed assets could lose some of their value.

It's a trend that could slow both refinancing and home buying if it continues. Higher mortgage rates won't necessarily derail the economy's recovery, analysts say, but it certainly won't help.

Instead of putting the failed car enterprise into bankruptcy six months ago — where Carl Icahn or Wilbur Ross could have bought it — the Bush administration chose Bailout Nation. Under Team Obama, that bailout has morphed into full-scale government ownership. Twenty-billion dollars of TARP money is already invested in GM [GM 0.75 -0.37 (-33.04%)], with another $50 billion on the way. And that number could easily double unless GM car sales miraculously climb back to 14 million this year. That’s highly unlikely, with car sales presently hovering around 9 million a year.

In other words, taxpayers are not going to get their money back. Yes, we the people will be left holding the bag for the mistakes of GM’s management and labor leaders over the last four decades.

Is this onslaught of government ownership an attack on free-market capitalism? Yes it is. Call it Bailout Nation or Ownership Nation, it’s an unprecedented degree of government command, control, and planning, all in the name of a tough economic downturn.

I don’t pretend to know all the answers to GM’s problems. Neither do I know all the miscues of the banks and insurance companies. But I do know this: The present level of government control over the economy does not bode well for this great country.

General Motors' board of directors met for a second day Saturday to make the final decision on whether the automaker would complete its restructuring by filing for bankruptcy protection Monday.

The outcome of the meeting could not immediately be determined.

GM and the Treasury Department, which has been guiding the Detroit automaker toward a rescue plan that will give taxpayers nearly a three-fourths stake in the company, went into secrecy mode.

Even if workers have managed to avoid being laid off, many employers have cut back in other ways, reducing employees’ hours, imposing furloughs and even sometimes trimming salaries.

About 6.7 million people were working fewer than 35 hours a week in April because of “slack work or business conditions,” nearly double the number a year earlier, according to the Bureau of Labor Statistics. A recent survey of 518 large companies by Hewitt Associates, a human resources consulting firm, found 16 percent had cut pay and 20 percent had cut hours or imposed furloughs, far more than the firm has seen in previous recessions. (The actual percentage of workers affected is likely to be significantly lower.)