It's Official...GM Is DUmping Pontiac?

One of our nations oldest corporations crumbling is terrifying for our countries economic place in this global market.

General Motors Corp. (GM) said Monday it will cut 21,000 hourly jobs and eliminate its Pontiac brand by the end of next year as part of a stepped-up restructuring plan.

The auto maker will also start an exchange offer for $27 billion of its unsecured public notes as the company looks to become viable, saying a successful exchange offer would allow it to stay out of bankruptcy court.

GM, which is surviving on federal loans, is racing to restructure by June 1 under close ...

Another Poignant Economic Guest Post By Chuck Bergman

To Whom: Jon Stewart has apparently been unable to make CNBC see what you have become....shills for anyone looking to make a quick buck. I understand that you have 17 live hours to fill, but everyday you place before the public snake-oil salespeople in perfect suits and ties. Fortunately most people no longer take your station, your hosts, or many of your guests seriously.

One of today's 'experts' was someone, working somewhere, who clearly was a short player in the financials. The discussion by him and with one of your hosts was about which major would be torn apart and when, and he guaranteed that by market close all the financials would be lower. I'm assuming he got his mid-day swoon enough to make a nice day trade, but where is CNBC's responsibility in letting this joker broadcast his personal desires under the guise of analysis? At least have the decency to have him right back on after the close to face up to his errors.

But you did that for a period of time....had a guest on and replayed some of their earlier speculations. I'm assuming that stopped because your guest list shrank rapidly...17 hoursto fill is 17 hours after all. I'll be watching the opinionated FOX....at least they're honest about their stance.

Jon Stewart Rips Jim Cramer

Yes I'm late, but this is too important to not put up.

The Daily Show With Jon Stewart	M - Th 11p / 10c
Jim Cramer Pt. 1
comedycentral.com
Daily Show Full Episodes Important Things w/ Demetri Martin Political Humor

The Daily Show With Jon Stewart	M - Th 11p / 10c
Jim Cramer Pt. 2
comedycentral.com
Daily Show Full Episodes Important Things w/ Demetri Martin Political Humor

The Daily Show With Jon Stewart	M - Th 11p / 10c
Jim Cramer Pt. 3
comedycentral.com
Daily Show Full Episodes Important Things w/ Demetri Martin Political Humor

Jon Stewart Hands It To CNBC and Rick Santelli

A sound 8 minutes of analysis on the analysts. Apparently each time CNBC says anything, the market reacts adversely. Quite intriguing.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Omnicom Set to Cut Up to 3,500 Jobs

NEW YORK (AdAge.com) -- The industry's largest holding company, Omnicom Group, is preparing a massive layoff of nearly 5% of its global work force of 70,000, according to executives close to the situation.

The executives would not confirm which divisions or agencies would be affected by the estimated 3,500 job loss, but it is believed that BBDO, the agency for ailing Chrysler, which lost its flagship U.S. brand Pepsi business this year, would particularly feel the ax. Earlier today, Ad Age reported that Omnicom media agency PHD was laying off 30 people and closing its Atlanta office.

An Omnicom spokesperson could not immediately be reached for comment.

Not all units affected...
The executives said not all Omnicom units will be touched. "Wherever adjustments had to be made, agencies that needed to make the adjustments made them," said an executive with knowledge of the situation. "That does not mean all companies made adjustments." And the current layoffs, to be concluded by year's end, may not be the end of it: Additional cuts could come in January across the holding company, executives said.

The depth of the layoffs is striking considering Omnicom already took measures to reduce its head count earlier this year. Just last month BBDO slashed 22% of its staff in Detroit as the office's embattled Chrysler client indicated it plans to reduce its marketing activity. Earlier this month, Ad Age reported that Chrysler, now in the midst of trying to win a government bridge loan to stay alive, is believed to owe the holding company some $80 million.

Omnicom, the parent company of agency brands such as DDB Worldwide, TBWA Worldwide and Goodby Silverstein & Partners, employed roughly 70,000 people worldwide by the end of 2007, up 6.1% from the end of 2006.

Omnicom Group in October posted $213 million in net income for the third quarter of 2008, up slightly from $202 million in the same period last year. But signs of trouble for the holding company were beginning to show in its third-quarter earnings statement: Its public-relations practice, which is made up of Fleishman Hillard, Ketchum and Porter Novelli, among others, showed negative growth for the quarter.

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Contributing: Rupal Parekh, Bradley Johnson

Smaller Advertisers Causing The Ad Market To Drop

Joe Mandese wrote an interesting piece for Media Post today, highlighting a new study that has shown smaller advertisers, normally spendng in the long tail, are the ones who have put the brakes on spending recently.

"If you go back one or two years, when we were seeing modest growth of 2% or 3% in ad spending, the grow was coming from the bottom of the market. Those smaller, long-tail advertisers were in the forefront of the advance. Now they are leading the retreat," explains Jon Swallen, senior vice president-research and the de facto chief economist at TNS Media Intelligence.

Mandese also provides some interesting insights into the spending habits of the big three automakers, which makes you raise an eye to the current bailout happenings.

While some big advertisers have also hit the breaks, especially two of the Big 3 domestic auto marketers - Chrysler and Ford, both down 33% year-to-date - one has actually been boosting its advertising budget in defiance of an economic downturn: General Motors.

Through the first nine months of 2008, GM boosted its advertising budget nearly 16%, more than any other top 10 marketer, a move that could raise some interesting questions on both Main Street and Capital Hill as the Big 3 automakers have called on Congress fro a multibillion bailout to stay in business.

Here's a look at the modest cutbacks that have been made by some of the biggest advertisers:

CFOs Think The Governement Was Right

CFOs Give Thumbs Up to Bailouts

72% of 219 CFOs representing a diverse group of large and small, public and private companies believe that the government did the right thing by bailing out financial institutions Bear Stearns, Freddie Mac, Fannie Mae, and AIG, but that the decision not to rescue Lehman Brothers was reasonable, according to a survey conducted by Financial Executives International and Baruch College's Zicklin School of Business.

SOURCE: Q3 CFO Outlook Study, October 30, 2008, Harvard Business Publishing.

Mark Cuban Pulling A Martha Stewart?

Wild news in the world of Mark Cuban.  Wild in that another ridiculously rich bastard had some inside info and made a play to not get his ass handed to him in his financial portfolio.

The SEC (Securities and Exchange Commision) alleges in a civil action that Mr. Cuban sold his entire 6% ownership stake on June 28, 2004, after learning that Mamma.com was raising money through a private investment in a public entity, or PIPE. [Ed's note: PIPE means that the company is creating more shares and selling them at a discounted price in order to raise cash, thereby brown-holing those that already own the stock] The next day, on June 29, the company announced the PIPE financing and shares of the company dropped by more than 10%. By selling his stake, the SEC alleges, Mr. Cuban avoided more than $750,000 in losses.

Say what you will about Cuban, but I still think he is a brilliant business man.  He writes a great blog that you should check out called Blog Maverick.

In defense of the SEC charges, Mr. Cuban stated, “I am disappointed that the Commission chose to bring this case based upon its Enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”

What Could $700 Billion Do?

It's fun to let your imagination run when trying to picture what the hell $700 B looks like...

Click the chart to find out ow you can help contribute to one of the above possibilities.

A Response to 'Innovation vs. "New Economy"'

I received some interesting feedback to the last post titled, "Innovation vs. "New Economy."  One comment provided an interesting historical perspective on the staggering economy, and situations we've faced before.

Thanks to guest poster "Chuck" for allowing me to use his comment as a post:

We seem in the US to go from point A to point Z, find ourselves in economic trouble, and then wonder how we got there. what happened to points F or J.....at Z already? Well, it takes time and more than a few individuals from a few different administrations. 

We have economic crashes every few years always precipitated by an economic 'event' dreamed up by some Wall Street brainiacs. And they can dream up these schemes because Wall Street lobbyists have managed to tear down yet another system safeguard by sending some Congressman's daughter to Harvard or some such perk.

The last vestiges of the regulatory patches to the famous market crash of 1929 were eliminated in the past 15 years....that's a few adminstrations. The Community Redevelopment Agency was mandated in the late 1990's to help lower income folk get homes. The sub-prime Wall Street geniuses of the early 2000's finished that job....and all of us.

The REAL devil in all of this latest upset remains the hoaried Standard & Poor's rating service. As old as Wall Street itself, S&P was supposed to be the last defender of the good and true. Absolutely everything that has happened in the mortgage mess could have happened without it being a world-wide phenomenom. Mortgages could have gone under, mortgage companies could have failed, people that invested in those investments could have lost a bit. And it would have been localized as this business and investment area had always been.

What spread the infection world-wide was good old S&P being convinced, for $15 million a pop, was that this garbage was worthy of a AA rating, almost up there with good old US Treasury paper. So for every billion dollar mortgage-bond package rated, they got $15 million and their rating allowed the packages to be sold world-wide.

And that's why the Italians and French and everyone else are suffering from lousy mortgages in Arizona and Texas....

And that's why 

Innovation vs. “New Economy”

The economy sucks! Our financial system is crumbling due to faulty government intervention and uncontrolled spending. Recession is looming.

That was the last you will hear of me rant about the “down” economy, because negativity is only going to get us so far. From this moment forward, it is now the “New Economy” in my mind. I’m completely over what has happened in the past, and am looking forward to a new White House, and a new economic system to tackle the mess we are in now.

So how will this “New Economy” affect the world of start- ups? I am a firm believer that innovation will ALWAYS win out. That isn’t necessarily a prescription for guiding the next 6 months of change, but creativity and smart business people will always find a way to shake up a stale business period.

It’s no secret that green ventures and biotech will continue to grow. From both a social and economic perspective, these are business channels that are both in need and have potential for development. Outside of those categories, a new business will need to show solid plans for revenue generation, which may seem tough over the next 6 months. However I do truly believe that originality can prevail. And I believe there is always space for an idea that is either brand new, or is a modified version of something everyone takes for granted.

The online ad space will be a very interesting place for investors. The double edge sword of marketing is that ad budgets are the first to be cut in an economic downturn. However, it also means that offline dollars get shifted online where rates are cheaper and accountability is more prevalent. Web start-ups should theoretically be flourishing in this “New Economy” because you will be hard pressed to find a middle tier advertiser looking to spend $2 MM in television for 5 thirty second spots. That same budget can be taken online and be diversified over the course of a few months. And it can go towards emerging media channels, like mobile, online video, social media, etc. Places where consumers are turning for their most prized content.

All in all, I’m legitimately excited to see where the next 6 months take us. in terms of venture capital dollars, the economy as a whole, and for emerging media, there will be lots of changes and I’m interested to see it all play out.

Harvard Business and The Economy

Because the economy is on everyone's mind right now, I figured I would play traffic cop to an interesting stat I picked up today from the Harvard Business Publishing group. I live in San Francisco, and with mine and most other people's personal portfolio's getting demolished, this is really just salt in an open wound.

How much is your salary worth? It depends where you live. The Salary Value Index lists the cities that make it easiest -- and hardest -- to save for your future. The index takes into account the gap between pay and the cost of living, as well as the strength of the job market, the population's level of education, the diversity of companies, and the average travel time to work.



SOURCE: Salary.com's 2008 Salary Value Index

Spending In A Down Economy

Just thinking out loud a bit here...everyone talks about how money is tight in a down economy. People want to spend less, venture capitalists fund fewer companies or simpy provide less dollars, and advertisers cut budgets.

I relate the down economy to a traffic jam. In slow moving traffic on the freeway, if everyone just stepped on the gas at the same time, we would all move smoothly. Despite some instances, the freeway keeps on going and we aren't running out of road. Similarly, if everyone decided not to panic and just kept buying their same groceries and investing in their same funds and companies, everything would be fine. It's the one guy pumping his brakes because he's panicking that throws everyone else off.