Auto Sales Drive Off Cliff

America's prosperity has long depended on the mobility of its workforce, which makes September's auto industry sales figures nothing short of portentous. Ford was down 30 percent, GM off 45 percent, and Chrysler down 36 percent as a combination of "plunging consumer confidence and shortage of credit" pushed auto sales to their "lowest monthly levels since the early 1980s," writes Business Week. The data "raised new concerns about the chances of survival for Detroit’s troubled Big Three," writes the New York Times, and "may increase pressure in Washington to provide emergency financial aid" to the industry. The car crash added to more U.S. manufacturing sector woe (activity plummeted to its lowest level in 26 years, according to the Institute for Supply Management), a trend mirrored in the U.K. and China, which has pushed that economy to the brink of recession.

U.S. stocks "see-sawed" Monday as investors looked nervously at the bearish economic news and to today's presidential election, reports CNNMoney. Trading was light as cautious investors chose to sit on the sidelines, "reluctant to buy equities in significant amounts before an election that could play a role in the market's direction in the years ahead," writes Reuters. Yesterday's grim auto sector news is just one of the reasons some politicians are calling for the new president-elect to choose a transition team ASAP, writes the WSJ. "He'll have about a day to rest. His Presidency will start on Nov. 6," one top staffer for a key Democratic senator tells Business Week, which writes that filling the role of treasury secretary will top the to-do list. "Three economic challenges are apt to dominate the early days of the new presidency: mending the economy; reshaping the battered financial industry; and crafting a policy for China, America's biggest creditor and an economic rival," adds the WSJ.

The current Treasury team is "considering using more of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers," writes the WSJ. Companies under consideration include those that provide financing to the greater economy, such as bond insurers and specialty finance firms like General Electric's Capital unit. And who is choosing the winners and losers in this grim financial game of trick or treat? "Having been handed vast authority and almost no restrictions in the bailout law that Congress passed a month ago, a committee of five little-known government officials, aided by a bare-bones staff of 40, is picking winners and losers among thousands of banks, savings and loans, insurers and other institutions," writes the NYT. While those running the program insist their only goal is to save the nation from a 1930s-style depression, critics complain the Treasury is making it up as it goes about installing a new form of "industrial policy."

Contrary to earlier speculation, Yahoo and Google have not scrapped their advertising alliance. Yesterday the two Silicon Valley titans "sent the Justice Department a revised version of their search-advertising agreement, shrinking its scope," the WSJ reports. Both "companies agreed to cap the revenue Yahoo can generate from the deal to 25 percent of Yahoo's search revenue and to shorten the length of the agreement to two years from up to 10 years." Google and Yahoo hope to fend off a potential lawsuit from regulators who fear the deal gives Google a near monopoly over the online advertising industry.

Finally, the Guardian reports that private equity giant Kohlberg Kravis Roberts has decided to delay its $15 billion IPO. Declaring that its assets had slumped by $649 million, the firm noted: "Some of our investments faced reduced valuations during the third quarter as a result of the extraordinary turbulence in the global capital markets." Even that sounds like an understatement, no?