"Basically, It's a Disaster"

More than a decade's worth of gains have now been wiped out. The Dow on Monday sunk to a low last plumbed in the Clinton-Gore years in what BusinessWeek calls "the stock market's frightful slide." The blue-chip index is down to April 1997 levels, and the S&P 500 has lost half of its value since the start of 2008. For long-term investors, it all makes for grim accounting. "If you bought into the overall stock market—represented by the S&P 500—at any point in the last 11 years, your shares are now worth less than you paid for them," BusinessWeek writes. The Wall Street Journal points out that the latest downturn is particularly unsettling, as it's not just the banks pulling down the markets. Technology and commodity stocks like U.S. Steel have also fallen.

The Washington Post writes that there is little the White House can do to restore confidence in the markets, as yesterday's fall occurred even "as new details of the government's plan to shore up ailing banks" emerged. And the outlook? "Basically, it's a disaster," David Dietze, chief investment strategist at Point View Financial Services, told the Washington Post. "There's much more pain ahead."

Don't look to Asia and Europe for any relief. According to Reuters, Asian shares fell sharply on Tuesday, as Japan's Nikkei neared a 26-year-low. And, at the outset of trading, the markets in London, Paris, and Frankfurt dipped, the BBC reports.

Maybe what's needed to restore investor confidence is another round of bailouts? Why not? The New York Times reports that the Obama administration is coming under increasing pressure to dip yet again into its emergency funds "to put billions more in some of the nation’s biggest banks, two of the biggest automakers and the biggest insurance company, despite the billions it has already committed to rescuing them." The WSJ reports that tottering insurance giant AIG has been in negotiations with the government to sweeten the terms of a $60 billion loan from Uncle Sam, part of the $150 billion poured into the company since last fall. The Financial Times says the negotiation would amount to a third government bailout of AIG that's become necessary as the firm is likely to report fourth-quarter results next week that "show a loss bigger than the $24.5bn reported in the previous three months."

There are new succession concerns at the helm of Rupert Murdoch's News Corp. Murdoch's long-time top lieutenant Peter Chernin will leave the company in June, the NYT writes, after 20 years at News Corp. "Mr. Chernin’s exit will mean a degree of instability in the News Corporation’s executive ranks at a time when Wall Street has become increasingly frustrated with Mr. Murdoch’s devotion to newspapers, a part of the company’s stable of businesses that Mr. Chernin is not associated with," the NYT writes. Speculation over Chernin's departure was a major side story at this weekend's Oscar gala, Fortune reports. Chernin, who presided over News Corp.'s TV and film businesses, was always going to be second fiddle to Murdoch and his heirs. "The perennial question was how satisfied Chernin, 57, would be as the No. 2 to a legendary media baron who, at 78, has indicated he has no plans to retire and has also made clear that he hopes one day to pass the CEO slot to one of his four grown children," Fortune writes.

Life for one automaker continues to proceed remarkably smoothly. On Monday, Ford announced it had cinched a cash-conserving deal with the United Auto Workers union on funding health benefits for its retirees. According to the Washington Post, the deal "would allow Ford to pay as much as half of its $13.2 billion obligation to retirees with stock rather than cash, a bargain that essentially relieves the company of the cash requirement but makes health care a far riskier proposition for retirees." The deal works just fine for Ford, but a similar agreement would be difficult for General Motors and Chrysler to pull off, writes Bloomberg. GM and Chrysler "may need additional U.S. loans if they adopt terms similar to a proposed United Auto Workers agreement with Ford," the newswire writes.

And, finally, here's a corporate HR story that actually ends on a positive note. In the past week, Microsoft wrote to some 1,400 employees it had laid off with some uncomfortable news: Its billing department had erred and issued them severance packages that were too generous. Could you please pay us back? the software giant asked. Cue outrage. Yesterday, Microsoft issued an about-face. OK, keep the money, the company graciously conceded. "I can tell you universally they were quite happy," Microsoft human resources chief Lisa Brummel told the Seattle Times.