Automakers Critical To Canada

The Canadian government,on both the national and provincial level,has been watching the U.S. automakers with great concern.The automotive industry is Canada's largest manufacturing segment,directly employing more than 150,000.The industry contributes more than 14% of Canada's manufacturing output,sustaining 12 Ontario communities.In consequence,the Canadian authorities are providing 3.29 billion dollars U.S. in loans to Canadian subsidiaries of General Motors and Chrysler.The federal government will give 2.09 billion,while Ontario will provide another 1.2 billion,said Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty.President Bush is authorizing 17.4 billion in aid to the struggling automakers.Ford Motor Company is not included in the loan packages,as it only needs a back-up line of credit at this time.

Paulson Reacts To Cut

We're all very fortunate that we have a Federal Reserve that's willing to do what is necessary,Treasury Secretary Hank Paulson feels.To date,we've stemmed a cycle of financial failures.The president's made a decision that the failure of automakers would not be a good thing,but no single action is gonna be a silver bullet.A lot of consumer finance takes place outside the banking system.I'm worried consumer credit will be cut off.Much of consumer lending is based on the capital markets.The Federal Reserve can rescue banks,but we didn't have the tools to rescue non-financial firms,Mr.Paulson reflected.

Bush Leaving Regional Stage

President Bush has probably attended his last regional summit,the Asia-Pacific Economic Cooperation event in Lima,Peru last weekend.Mr.Bush told the Pacific Rim gathering that recovering from the financial crisis will take time,but we'll get there.There are times when government intervention is essential;yet it is also essential that nations resist the temptation to over-correct by imposing regulations that would stifle innovation and choke off growth.The president insisted that free markets,free trade and free peoples are the way out of the crisis.One of the lessons of the Great Depression is the harmfulness of global protectionism.The APEC countries agreed to refrain for 12 months from raising new barriers to investment or to trade.They also endorsed the principles agreed at the Summit on Financial Markets and the World Economy,which Mr.Bush hosted the previous weekend.President Bush met with Russian president Dmitry Medvedev while in Lima.Their talks were described as cordial,but direct and frank,covering the Georgian flare-up,as well as the financial crisis and anti-missile defense in Poland.The two leaders appear to be friends,readily smiling and shaking hands.

Bush Leaving World Stage

President Bush is in the process of taking his leave of international conferences.Mr.Bush hosted the Summit on Financial Markets and the World Economy this past weekend,which he described as a very successful summit.A 44-page statement of principles for preventing financial crises was agreed,such as greater transparency,more participation by emerging markets,the need for new alert systems and closer supervision of financial products and key corporations.The details are to be worked out by a number of working groups.On the other hand,the president indicated there will be further meetings.A meeting is not gonna solve the world's problems,he said,but will help begin a process.President Bush told the leaders that President-elect Obama's transition team has been fully briefed,that the president will work for a smooth transition,and that he hopes the president-elect succeeds.The president thanked the press for covering the summit,then said goodbye with a wave and a smile.

Shop Talk

A special greeting to California.I advertised there this week.Your economy is as big as that of many countries.Representatives of many countries are meeting in Washington this weekend to work on the financial crisis.The International Monetary Fund,World Bank and G7 group of industrialized countries will all be discussing the global economic dislocation.President Bush will meet with the G7 finance ministers tomorrow morning.It's possible some concrete steps will result.In any event,there's a chance that the U.S. stock market has finally bottomed.This morning it opened with a nearly 700 point dive,followed by some recovery:the sign of a classic capitulation,the climax of a bear market.There's a bit more financial hope this weekend than there has been in some time.