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20 November 2008

Market News

GMAC joins the ranks of financial institutions applying for bank status, making them eligible for bailout funding.

Pirates demand $25 million for Saudi's oil supertanker.

Goldman erases 10 years of advances as share prices slump below the IPO price.

JPMorgan predicts that the Federal Reserve will cut interest rates to 0% in January.

Jobless claims are at the highest level since 1992.

Congress is yet to approve a bailout plan for the automakers, but Congressman Bond says that a group of bipartisan lawmakers have agreed to a plan. The plan entails expanding the authority of the already approved $25 billion to be used for bridge loan purposes. Originally, money was to be used for re-tooling. Some Congressman want to see tight restrictions put on the money and some are still upset that the CEO's are not acting like they are in crisis mode even though they say they are. This was evidenced by their using private jets to travel to Washington D.C. instead of saving money by travelling commercial.

GM is down over 90% YTD and traded at its lowest price since the 1930's. On news of the rumor of a bailout plan, shares traded to session highs. Kerkosian aide York says that GM may have only weeks to survive, not months.

Oil prices traded below $50 for first time in 24 months. Prices rose to a record $147 in July as the U.S. added oil to the strategic oil reserve, since July the U.S. has stopped purchasing oil for the reserve.

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