Stock Market Crash! Blog

Ford to Cut Up to 30,000 Jobs to Stem Auto Losses

Ford Motor Co. will close 14 manufacturing facilities and eliminate as many as 30,000 jobs over the next six years under Chief Executive Officer William Clay Ford Jr.'s plan to end North American losses in 2008.

The company will cut at least $6 billion in annual costs by 2010, Bill Ford said in a conference call today. Shares of Ford had their biggest gain in two months after the company said pretax automotive losses in North America narrowed by more than two-thirds from a year earlier. Executives pledged to create bolder designs, develop vehicles faster and build them more efficiently to ensure that every one is profitable.

Two more plants will close by 2008, followed by two others in 2012. The St. Thomas, Ontario, car plant next year will drop to one shift from two. The plant makes Crown Victoria and Grand Marquis cars.

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Iran Sanctions Could Drive Oil Past $100

A surge in oil prices last week to almost $70 a barrel on concerns about the restart of Iran's nuclear program only hints at what may lie ahead.

Prices could soar past $100 a barrel, experts say, if the U.N. Security Council authorizes trade sanctions against the Middle Eastern nation, which the West accuses of trying to make nuclear bombs, and Iran curbs oil exports in retaliation. A sharp global economic slowdown could follow.

That's the dilemma the United States and European nations face as they decide whether to act. But Iran would also pay a hefty price if the petro-dollars that now represent 80 percent of export revenues are reduced, potentially stirring civil unrest in a nation with a 14 percent unemployment rate.

"Even if Iran pulled a small amount of its oil off the market, say it pulled a half million barrels a day, I could see oil prices literally jumping over the $100 per barrel mark," said James Bartis, a senior researcher at Rand Corp.Read More

NYC mayor: housing market "dramatically" slowing

New York City Mayor Michael Bloomberg on Friday said the real estate market was slowing "dramatically" and only a "miracle" could stop soaring mortgage rates from eating into housing prices.

Consumers are definitely feeling the pinch of higher mortgage lending rates and are not quite as eager to snap up a new home especially at time when house prices in the Big Apple are near record-highs, the Republican mayor said in his weekly radio show.

"The real estate market is slowing down dramatically and we're going to have a problem down the road," Bloomberg said.

"If people who want to sell their houses have to wait a longer time before someone comes along and buys it, it would be a miracle if prices didn't start to go down," he said.

Korean Stem Cell Researcher Hwang Faked Human Studies

South Korean scientist Hwang Woo Suk faked both his papers on human stem-cell research, Seoul National University said. Confirmation of the fraud dashed hopes his work may advance treatments for diabetes and Parkinson's disease.

Stem cells stored at Seoul National University, DNA fingerprints and photographs submitted to Science magazine for its 2004 paper were found to be fabricated, the university's investigative panel said in a statement after a monthlong probe. The panel backed Hwang's claim he cloned the world's first dog.

The announcement ends two years of euphoria over Hwang's research, which saw him elevated to national hero in South Korea, where he set up a state-funded global research center. Hwang resigned all official posts last month after the university said he fabricated his 2005 research.

Hwang was forced to quit his post at Seoul National University on Dec. 24 after the school said he deliberately falsified the results of his May 2005 study.

Investigations into the research began in November after colleagues said Hwang used human egg cells unethically obtained from lab workers and paid donors. After those allegations, Hwang's University of Pittsburgh co-author Gerald Schatten asked that his name be removed from the paper. Hwang said Dec. 16 that he wanted to retract the study.

Science said on Jan. 5 that it would retract the 2005 paper after the Seoul National University investigation is over because it received permission to do so from everyone named on the document. The journal said it will step up a probe into Hwang's 2004 paper, also published in Science.

Soros sees chance of recession in 2007

Billionaire investor George Soros said on Monday the U.S. Federal Reserve might overshoot in its bid to tighten monetary policy, deflating housing prices and tipping the economy into recession in 2007.

A collapse in U.S. housing prices could be associated with a dollar decline, scuppering the Fed's attempt to engineer a "soft-landing" for the economy, Soros told an audience at the Singapore Institute of International affairs.

"If housing continues to cool while rates are slowing then it could turn into a hard landing," Soros said.

"That's why I expect a recession to happen in 2007, not 2006."

The Fed has raised its key rate at each of its policy meetings since June 2004, but has indicated the tightening cycle is close to peaking.

Soros said he believed the U.S. housing bubble, a major factor behind strong U.S. consumption, had reached its peak and was in the process of being deflated.