Black Tuesday?

General Motors has dropped a $39 billion bomb described here: by my calculations that puts the company's stockholder equity in the range of -$43 billion. We'll see what the actual number is tomorrow. It must have taken a long time for GM's executives to swallow making this move; usually it is the accountants that push for writedowns like this and they typically don't have much sway. Maybe GM's accounting firm was threatening to quit.

This link points to a Bloomberg story posted at 2 PM Eastern today that "Japan's Leading Economic Index Drops to Decade-Low 0". The explanation in the story states that "A reading of below 50 indicates the economy may slow in three to six months"..now the actual reading was ZERO! So Japan's economy is literally going nowhere. I had assumed on seeing the news item about this index that the result of zero was due to an equal number of positive versus negative components. That is not the case...if you follow the link in this post you will see that every single available component was negative. So the headline number is a bit misleading if you are not familiar with the details of how the index is calculated. It's hard to see how Japan can avoid a recessionary 4th quarter.

Meanwhile, " The U.S. doesn't have enough information to predict the outcome of events in Pakistan or whether President Pervez Musharraf can hold on to power, according to a Bush administration official." So the US's primary partner in restraining Islamic militants in south Asia is teetering on the brink of political collapse. It's hard to say whether this crisis will lead to increased insurgency in Afghanistan as Pakistan's military is focused on events in its own capital; or whether the insurgents focus on Pakistan themselves to try and help topple Musharraf. I think it's safe to say that there are more than a few people in Washington not getting a lot of sleep at the moment.