From General Motor’s press release…

Improving its liquidity position remains a top priority for the company. In response to deteriorating market conditions, GM announced today that in addition to the $15 billion in liquidity initiatives it outlined in July 2008, it has identified $5 billion of incremental liquidity actions. Cumulatively, GM has announced actions aimed at improving liquidity by $20 billion through 2009. To date, $10 billion in internal operating actions have either already been completed or are on track for full execution by the end of 2009.

Even if GM implements the planned operating actions that are substantially within its control, GM’s estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company’s estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM’s plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.

Translation: General Motors is about to become bankrupt, government bail out needed soon.

From Bloomberg….

China’s Finance Minister Xie Xuren was called back from an international economic conference in Peru before the meeting began, following orders from Beijing to help resolve problems at home, an organizer of the event said.

Xie left Trujillo, Peru, where Asia-Pacific Economic Cooperation finance officials are meeting this week, shortly after arriving at 11:00 a.m. on Nov. 5, Gladys Otero de Swinnen, protocol director for the conference, said in an interview.

“They told him he has to resolve an economic problem and that he’s the only one who could do so,” de Swinnen said. “He was complaining because he had to fly 32 hours to get here and then he had to fly another 32 hours to get back.”

I don’t know what was so critical that he had to fly back just as he got there. But a lot of China’s problems stem from this….

Sales at the nation’s largest retailers fell off a cliff in October, casting fresh doubt on the survival of some chains and signaling that this will probably be the weakest Christmas shopping season in decades.

The remarkable slowdown hit luxury chains that sell $5,000 designer dresses as badly as stores that offer $18 packs of underwear, suggesting that consumers at all income levels are snapping their wallets shut.

A lot of the stuff that is not selling was made in China.

I just checked to see what I had last written and found I have been even more delinquent than I had imagined. I did not tell you anything about my multi-state tour to set up my little invention that so pleased my boss: the On Time Delivery Bridge. It keeps track of lines that we Click Here to continue reading.

From the Dallas Fed…

You can see the size and breadth of the Fed’s efforts to counter the collapse of the credit mechanism in our balance sheet. At the beginning of this year, the assets on the books of the Fed totaled $960 billion. Today, our assets exceed $1.9 trillion. I would not be surprised to see them aggregate to $3 trillion—roughly 20 percent of GDP—by the time we ring in the New Year. The composition of our holdings has shifted considerably. Previously, almost 100 percent of our holdings were in the form of core holdings of U.S. Treasuries; today, less than a third are. The remainder consists of claims deriving from our new facilities.

(h/t Calculated Risk)

From Naked Capitalism…

Notice how Keynes expected employment to fall in capital goods industries. We have no version 2.0 for an economy so heavily dependent on financial services. I also wonder, even though the US badly needs infrastructure, if any of these newfangled theories allow for how specialized labor has become. One of the reasons that employment didn’t fall sooner is that even seemingly mundane jobs now require employer specific knowledge (computer systems, internal procedures) that make it more costly to bring a new person on board and deters firing.

Put more simply, how is creating jobs in repairing infrastructure going to help unemployed bank workers? Even if they were willing, many will prove not to be able, and will also be living at a remove from where the jobs would be. In an advanced economy, labor is not terribly fungible.

I have never been a fan of Keynes for reasons that are similar to this. Only my objections have always been based around the fact that real capital is not terribly fungible. I feel that the primary cause of recessions and depression is a misalignment of the capital structure and I don’t think those types of problems can be cured by creating more “demand”.

Yves Smith is simply pointing out the human capital has similar problems. If you train too many people to be lawyers and bankers and not enough to be construction workers, you can’t fix that problem by stimulating the economy.