General Motors

In recent days, the automotive sector went on stage with Ford (NYSE:F) and General Motors (NYSE:GM) that since beginning of year, accumulated between the two, losses by US $30 billion. In this situation of crisis, General Motors has just decided the reduction of its production planned by 20% for 2009 to thus cut costs in order to avoid layoffs. It is that if it maintained the level of production planned, even ran the risk of running out of liquidity, which had led her to collapse in the absence of funding. Shortly after 100 years of life, the largest automotive worldwide faced the possibility of falling into bankruptcy. But returning to the subject of the $700,000 million, Henry Paulson, announced that with the money of the megaplan of approved rescue at the end of September, will expand aid to other sectors of the economy at the expense of banks and other financial institutions, who already cannot buy their toxic assets. By way of justification, Paulson made the following statements in yesterday, which were reflected by the Spanish Economist website: We needed to act quickly and firmly, and the purchase of illiquid assets, our initial goal, would have required more time to be put into practice and would have not been sufficient given the severity of the problem. When you read the news that the Treasury will cease to buy toxic assets, one cannot avoid frightening is thinking that this could lead to new falls of banks, which would revive the crisis. But logic pursued by the Secretary of the Treasury is to present as quickly as possible on the economy and because the process of acquisition of toxic assets would take more time than desired, is that it seeks to act in other sectors concerned to prop them up. The question that arises here is that the justification given by Paulson does not seem to be an element that arose suddenly since since before approved the megaplan, you knew that it was going to take time to be implemented and have positive effects.