GM Warns They Could Be Out Of Business In a Month

The predictions for Friday’s non farm payroll report are expected to be grim. One of the few pieces of news that could increase risk appetite is the proposed bailout of US automakers. General Motors warned they could be out of business in less than a month if the bailout package is not approved resulting in the loss of millions of jobs. Chrysler has stated essentially the same thing.

ECB to Lower Rates

In the meantime European Central Banks were expected to lower rates further affecting the interbank forex market. There are signs that credit markets are thawing slightly but not enough to jump start the global economy. In addition the US treasury is considering steps to new steps to strengthen bank capital and measures to lessen home foreclosures.

Uneasy Business and Government Partnrship

The global economic crisis is unprecedented and there is now an uneasy partnership between business and government in the US. Both business and government are sailing into uncharted waters in an attempt to prevent a global economic meltdown. The US government is injecting billions in new capital into banks to prime credit markets that provide such consumer services as auto loans, student loans, mortgages, and credit for day to day operations of businesses.

Interbank Lending Essential

Interbank forex is essential for the smooth functioning of the global economy. US interbank forex and lending rates have remained at the same rate since Monday and stocks have rallied slightly due to expectations that the US government will bailout the major automakers. Investors want this bailout and the sooner the better. It is expected that the bailout would have a positive effect on stock and commodity markets and increase risk appetite in forex markets. Interbank forex rates are affected by many factors and right now the state of the global economy is affecting rates the world over.