"In a startling departure, the Obama administration has decided that the price of failure in America should be failure."
~~ Roger Simon, politico.com
Regardless of the writings of Adam Smith, the markets are emotional, not rational.
President Obama decided Friday that General Motors' restructuring plan did not restructure enough to make the company viable. Nor would it be with GM Chairman & CEO Rick Wagoner behind the wheel.
Obama demanded that Wagoner step down as the price for consideration of any more government bailout. Wagoner did so, to his credit, on Sunday.
Wagoner continued a pattern of thinking that left America's automobile champion in a near death condition. Wagoner had to go.
The initial outcry about government intrusion in a matter best handled by the private sector was heart rending, as much as it can be for oppressed CEOs of failing businesses.
But, what's a president to do when the private sector, in the form of GM's board of directors, doesn't, you know, handle the matter?
What Obama did.
That was something of a shock to investors, on Monday.
"The big developments of Washington's edicts to General Motors and Chrysler hit Wall Street very hard on Monday, as investors like the idea of bailouts with no strings attached far better than they like the idea of bailouts with strings attached."
~~ Paul Hoosen, WizBangBlue.com
Lets sum this up. The guy who led GM to lose 90 percent of its market value and $80 Billion in losses since 2005, not to mention the loss of worldwide market leadership to Toyota, is finally forced from his job and the stock market tanks for a day.