NEW YORK – What a difference a couple of weeks makes. The CEOs of Detroit’s big three automakers are once again in DC to plead for a government bailout — but this time they left the private jets at home and drove. Ford’s Alan Mullaly, GM’s Rick Wagoner and Chrysler’s Bob Nardelli made the nine-hour journey in their companies’ hybrid cars.And they aren’t stopping there. All three men also say they will now lower their salaries to a dollar each if their companies tap federal aid. It is clear they learned a lesson from the public relations fiasco that surrounded their last trip to Capitol Hill — but have they really changed?

In an effort to try and secure a financial life-line, all three have vowed to shrink their companies. They will be slashing jobs, shedding car lines and shifting production to energy efficient vehicles. At least that is the plan.

And they are not the only ones vowing to change. At a press conference Wednesday the head of the United Auto Workers Ron Gettelfinger said the union will consider making modifications to their existing labor contract. They are allowing the car companies to delay payments to a union-managed health care fund. But the union leader stopped short of re-opening the contract, leaving some speculating the give-backs would be limited.

There are other reasons to be deeply skeptical about this industry’s ability to re-invent itself.

The amount of emergency money the companies say they need has gone up. In just two weeks the number has grown from $25 billion to $34 billion.

All these managers have unveiled turnaround plans in recent years — and none have been successful.

The CEOs now say they will cut their pay, but two weeks ago they didn’t think that was necessary — even though Mullaly made almost $22 million last year and Wagoner $14.4 million. Nardelli’s 2007 salary is not disclosed since Chrysler is now a private company.

Some Republican lawmakers have suggested that the government aid come with the condition that current management step down.

It may be that in the eleventh hour, with collapse looming for both General Motors and Chrysler, these CEOs and union leaders have truly been converted.

You’ll get a chance to see yourself Thursday and Friday when they make their case once again for lawmakers and the general public.

But do you think these men can lead the charge to change? Or does the old management guard need to get swept out to give U.S. carmakers a real shot at survival?

let us know what you think.

NEW YORK — The top executives of General Motors, Ford and Chrysler appeared in front of Congress for the second day in a row Tuesday, to make their case for an emergency government loan.

The three CEOs have said they don’t have the cash to operate next year without help and warned that the failure of the industry would have dire consequences for the U.S. economy.

And yet GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler chief Bob Nardelli arrived for these historic hearings on private jets! That’s right: The men at the helm of an industry so crippled that it has to ask for taxpayer money to survive flew on private jets. And they wonder why the American public is so angry about these bailouts.

Their choice of transportation dominated Wednesday’s hearing. Representative Gary Ackerman, a Democrat from New York said: ” … there is a message here — couldn’t you all have downgraded to first class or jet-pooled to get here? It would have at least sent a message that you do get it.

“If you’re gonna streamline your companies, where does it start? And it would seem to me as the chief executive officer of those companies you can’t set the standard of what that future is going to look like, that you are really going to be competitive, that you are going to trim the fat, that you don’t need all the luxuries and bells and whistles … it causes us to wonder.”

CNN contacted each company who said in various ways that the use of private jets had to do with security and safety requirements. The spokespeople claimed that the companies had already made major cutbacks in travel and corporate spending.

The director of GM news relations added: “We are only doing travel that is absolutely critical to the future of the business. We think testifying in front of the Senate and House to try to secure the future of the U.S. auto industry falls into that category.”

At best this can be chalked up to a public relations mistake. But I think many will also see this as a symbol of what is wrong with corporate America.

What do you think? Is this a legitimate issue — or are we in the media making too much of it? Should government aid come with requirements that the current management step down? Or should these companies sink or survive on their own?

NEW YORK - In September U.S. Treasury Secretary Henry Paulson lobbied Congress for $700 billion to buy up troubled mortgage related assets that were dragging down otherwise stable banks. We were told the very future of the U.S. economy was at stake.

Paulson has now admitted what many had already started to guess - they got it wrong. Treasury is no longer planning to use the money to buy toxic debt. That plan, it turns out, was too complicated and was going to take too long to implement. Instead, the government is going to continue to give money directly to financial institutions in exchange for shares.

Not only that, but you no longer have to be a bank, or turn yourself into one, to qualify for help.

Treasury now wants to open the bailout coffers to companies that issue credit cards, student loans and car loans. Paulson says the aim is to lower the costs and increase credit availability to American consumers.

Some say the fact that Paulson is willing to adjust and change the plan so quickly should be applauded; it shows officials are focused on coming up with the best possible remedy to fix the economy and are not worried about losing face.

Others are outraged at what they see as a lack of transparency and information.

Which companies are tapping the funds and what is it about their business or balance sheet that justifies aid?

What about those so-called toxic assets? What happens to them now? Won’t they still be problematic?

There is only $60 billion left from the original tranche approved by Congress. How is the rest going to be spent? How much more will be needed? At Wednesday’s press conference Paulson said that he felt the original $700 billion was enough to get the job done, but few analysts think that is realistic.

What about the $1.5 trillion dollars the Fed has lent out above and beyond the original funds? The Fed has declined to comment on where that money has gone or what they took for collateral. In fact, Bloomberg News is suing the Fed to release documents under the Freedom of Information Act.

It may be the Treasury and the Fed are taking a “what you don’t know won’t hurt you” approach. If the general public knew just how bad it was at some banks or key institutions it could spark a run on those firms and perhaps make a bad situation worse.

But the American public is in no mood for behind close doors operations. There is a severe lack of trust when it comes to government officials and business leaders. Taxpayers want to know just where their money is going. They don’t like the fact that the rules of the game seem to be changing.

What do you think? Would more transparency help rebuild trust or would that just spark more panic? How can leaders in both government and the private sector rebuild public trust?

NEW YORK – General Motors laid it on the line Thursday. At the rate things are going, they do not have enough cash to operate next year.

They need government help and they need it now. Conservative estimates say Detroit’s big three need between $25-50 billion immediately to keep their doors open.

The problem - not everyone is convinced it is a good idea to give them the cash.

Those in favor of the loan guarantees argue if you bailed out the likes of AIG, Fannie Mae and Freddie Mac and injected cash into the nation’s banking system, then why not lend a helping hand to car-makers?

A study by The Center for Automotive Research has suggested as many as 2.5 million jobs would be lost if the big three U.S. auto companies fail.

Those layoffs would hit a U.S. economy that has already shed more than 1 million jobs in 2008.

Others also warn that many institutions own GM and Ford bonds and that letting them go under would create more turmoil in already fragile markets.

Those against giving Detroit cash complain it would be throwing good money at a broken industry.

They say these companies are too big. They promised too much to past workers. Earlier government loans have failed to spur real change.

Many wonder why this time would be any different. Maybe it is time to face the music.

Unlike the bank bailout which was designed to address credit and lending, this bailout is more about saving jobs.

Analysts argue that while big, the auto industry is not nearly as crucial as it once was. They say the money would be better spent retraining displaced workers and getting them different jobs.

And then there is the moral hazard issue. Where do we draw the line? If taxpayers bailout the car companies, who will be next? Airlines? Construction? There isn’t enough money to bailout every company hurt by in this downturn.

What do you think? Is it fair to help some industries, but not others? How should lawmakers decide who survives and who fails? Would you buy a car from a company in bankruptcy?

LONDON, England — When Barack Obama is sworn in as U.S. president on January 20, 2009 he will be taking office on the usual wave of enthusiasm for a new political beginning, but against a grim economic background.

Barack Obama must act quickly to turn around the U.S. economy.

There’s a much-told story about a couple becoming utterly lost in the back lanes of some rural area and chancing upon an ancient local inhabitant.

Watch Bill Hubard of MIG Investments discuss what President-elect Obama must do to clean up the economic mess

Asked for the directions to their destination, the old man leans on his stick, furrows a wrinkled brow and remarks sorrowfully: “If I wanted to get there, I wouldn’t start from here.”

Obama won’t have any choice, any more than the couple in the story did.

Shortly after the crowds attending the inaugural parade have gone to their homes (assuming they haven’t lost them to foreclosure by hard-hit mortgage lenders), ill tidings will reach the Oval Office: the national income numbers for the fourth quarter of 2008.

They will confirm to everyone but a few academic pedants and hair-splitters that the United States will be well into recession by then.

By then, too, the usual remarkable capacity of the U.S. economy to create jobs will be fully exhausted. The unemployment rate will be rising inexorably.

Add all that to a housing market still on life-support, and the feel-bad factor will be overwhelming.

The U.S. consumer will be in parlous state, and retailers will be licking their wounds after a disastrous 2008 holiday season.

So what will the new president need to do to dig his nation out this sticky economic mess?

In fairness, a start has been made by President George W. Bush’s administration after a hesitant start.

Fingers crossed, the worst of the financial turmoil is already behind us: the banks have been underpinned by hundreds of billions of dollars of government money and U.S. stocks appear to be escaping out of the cycle of volatility that has marked the past few weeks.

Economic forecasters believe the back end of 2009 will see global recovery — without adding any riders stipulating that what the new U.S. president does will alter the outlook.

But it plainly will.

The holder of the most powerful office on the planet can do more than anyone to influence global economic fortunes, especially if he has the support of the U.S. Congress, which holds the key to the awesome power of the U.S. federal budget (albeit painfully overstretched by the bank bailout plan).

So what should Obama be doing? What will be his most powerful tools? How will he stimulate the economy? How will he best use the “presidential bully-pulpit” to instil confidence into a stricken nation?

Should he adjust the duties of the U.S. Federal Reserve to include an obligation to prevent the formation of financial bubbles? Or would he be well advised to avoid extending the boundaries of economic regulation, while perhaps making sure that the existing framework is used more effectively?

How will he lift the housing market off the floor? And should he reach out to those many Americans suffering the distress and humiliation of being turfed out of their own homes because they can’t make the mortgage payments?

Please give us your answers and ideas.

When it comes to investing, timing is everything. It may be true for the music industry as well.After an eight year hiatus Australian rock bank AC/DC has exploded back onto the world stage. Their new album “Black Ice” has debuted at the top of the charts in 29 countries.

AC/DC are known for rocking recession.

The band kicks off a world tour in Wilkes-Barre Pennsylvania this week. Not since their mega-hit “Back in Black” 28 years ago has the group enjoyed such success. Back then, many countries were mired in a recession. In hard times, it seems people need some hard rock.

I haven’t had a chance to listen to the album yet, but the song list seems well-suited to a time of turmoil: “Anything Goes,” “Smash N Grab”, “Spoilin’ for a Fight,” “Money Made.”

Interestingly, AC/DC is sticking by its policy of shunning Apple’s iTunes. “Black Ice” is being sold exclusively through Walmart and on the band’s Web site.

It is a risky move in this digital age, but it seems to be paying off. The album has sold almost 800,000 copies in the U.S. alone its first week.

The concert tickets are selling fast as well. The cheapest I saw for tonight’s kick-off were over $90.

With all the worries about recession and consumer spending, it seems people are willing to pay for some escapism.

Is rock ‘n’ roll your idea of therapy? What is the soundtrack do you think best represents these uncertain times?

LONDON, England — How long can this go on? We seem to be locked into a terrifying cycle: stocks suffer days of sell-offs, followed by a powerful bounce. But just as we start wondering whether this market slump will follow the same pattern as its ugly predecessors of 1987, 2001 and many others and hit bottom, the same pattern repeats itself.

Traders at the New York Stock Exchange, where share prices have fluctuated strongly during the past few weeks.

It’s three steps back, then one step forward - and over the past few months it’s been repeated more times than I care to remember. To make matters worse, there never seems to be that much rhyme or reason to the selling or the buying. One day share markets worry themselves sick about global recession, then the next day all that is outweighed by some random piece of supposedly good news. A few hours later a renewed slide on stocks in another time zone has investors back in panic mode, and we’re off to the races again.

Market insiders point to several underlying factors, notably the aching uncertainty about where the credit crunch and the world’s leading economies are heading. But they say that what is clearly adding to the volatility is a frenzied scramble by hedge funds to move out of stock markets and also to make money for their investors by whatever means they can dream up. The betting is that they are both creating a lot of the volatility and riding it at the same time.

To add to the craziness, we are seeing some violent swings on currencies, with the Japanese yen and to a lesser extent the dollar (given the relative security of US Treasury bonds) now the safe havens of choice amid the carnage of “global deleveraging”.

With previous sell-offs, there seemed to be a clear end to the selling. It may have taken a while to come along, but in the end the bargain-hunters stepped in and there was a gradual return to normality, and then to sustained growth in share values.

So where are we now? When Warren Buffett said a couple of weeks back he thought Wall Street stocks were a buy, he may have been right about their current puny valuations, but not about whether those valuations could get even punier.

Speaking on Business International on Friday, Robert Parker, Deputy Chairman of Credit Suisse Asset Management, was a lot more cautious, predicting the return to a bull market would not come until the middle of 2009.

That would certainly be a few months before the predicted end to the current global slowdown, which most economists I speak to seem to think will only loosen its stranglehold at the far end of 2009.

What do you think? If so illustrious an investor as Warren Buffett thinks we’re close to the bottom, should the rest of us pile into stocks in hopes of rather decent gains within a couple of years? Or has even he got it wrong? Watch what Tom Hougaard, chief markets analyst at City Index thinks of your opinions

LONDON, England – What do you do once your house has burnt down? Rebuild it the same as before? Or think hard about why it burnt down — and make sure it is a lot less likely to do the same again?

There seems to be a feeling among many of the world’s leaders that once we have stemmed the present financial crisis, we should work out how to stop such a firestorm ever recurring.

The argument goes that this means redesigning the global financial architecture that has served since 1944, when an international agreement at Bretton Woods, New Hampshire, set up the International Monetary Fund and its sister institution, the World Bank.

Already sketching away on his drawing-board is the UK Prime Minister Gordon Brown — no doubt feeling himself to be the man of the moment after seeing his nationalization-by-another-name model for bank rescues being widely adopted, even by the Bush administration.

At its summit in Brussels, the European Union endorsed his approach and gave its blessing to this weekend’s visit to Washington by the French President and EU Council President Nicolas Sarkozy and the European Commission President Jose Manuel Barroso. (It must have taken at least two strong men to hold Brown back from jumping aboard the plane alongside them.)

It is of course hard to disagree with the prime minister when he calls for a global “early warning system.” That is about as controversial as motherhood and apple pie; of course we all support them. But the reality is that many authoritative voices warned of the dangers of spiralling personal and mortgage debt in the U.S., UK and elsewhere, but they were broadly ignored.

With all due respect and the luxury of hindsight, what is the point of going to great trouble to build a new early warning system when you have a history of ignoring the crescendo of early warnings of disaster — and when you allowed the problem to progress to the point of catastrophe?

The other question is one I raised on “Business International” a couple of days ago with Geoffrey Wood, Professor Economics at London’s Cass Business School: what caused the fire in the first place? Was it the system that was at fault, I asked him, or was it reckless misuse of the system that got us into this mess?

Wood told me that both were at fault, but that rebuilding the so-called financial architecture was “neither necessary nor helpful.”

So what did go wrong?

In Wood’s view, the regulators failed. So on Friday’s “Business International” I turned to Chris Rexworthy, a former manager at the UK’s Financial Services Authority. He conceded the point, while pointing to the difficulties of supervising a highly complex industry with a small body of enthusiastic, intelligent but ultimately inexperienced and probably underpaid regulators.

Another important strand of Gordon Brown’s argument is the need for globalized regulation in an of rapid globalisation. Again, that seems hard to dispute — but unless national regulators are up to the job, how would that work any better? Would the establishment of a supranational regulatory body really bring real benefits, or just tie up the world’s best financial brains in years of haggling over its shape, size, scope and powers?

So before we embark on that process, gushingly referred to as “a new Bretton Woods,” let us ask what part those 64-year-old institutions themselves have played in all of this? The fact is, the International Monetary Fund has been on the sidelines, with Managing Director Dominique Strauss-Kahn railing furiously about the intensity of the flames engulfing the financial house, while lacking water and a hose with which to douse them.

In fairness, the IMF has dealt admirably with what it was set up to do: deal with national governments whose financial payments got into scrapes. Its involvement in helping Ukraine is a fine example.

But what the fund was never designed to do was deal with a problem that originated within the commercial banking system. So it can hardly be blamed for the turmoil that swirls around us now, or for being left as more of an advisor than a rescuer. It was also never intended to save us from what we now recognise as the inevitability of the business cycle.

It is only human to seek a scapegoat, and a large well-heeled international organization like the IMF might do nicely. But ultimately, we need to address the real root of the banks’ woes: those famous “toxic subprime assets” — the result of fancy financial footwork which took advantage to minimal regulation and lumped ill-advised mortgage lending in with perfectly sound loans and then marketed them as “investment grade.”

Whose job was it to spot the dangers they posed and nail them? The answer must in future surely be national regulators and governments, aware of the global dimension and unafraid to turn to other nations for help and a common approach.

New Hampshire is an attractive place at this time of the year, when the autumn colors turn the hills red, orange and yellow, and especially appealing to officials and investors beaten black-and-blue by slumping markets.

But before we head off to revisit Bretton Woods, let us be clear what really went wrong, who was responsible, and whether we really need completely revamped financial architecture — or a well-constructed new wing to the house.

What do you think?

Famed investor Warren Buffett says it’s time to go shopping.

Warren Buffett says buy but is it good advice for everyone?

In an editorial in Friday’s New York Times, Buffett says, “…fears regarding the long-term prosperity of the nation’s many sound companies makes no sense.”

The Oracle of Omaha, as he is known, went to great pains to insist he is not calling the bottom for U.S. stocks. “I haven’t the faintest idea whether stocks will be higher or lower a month — or a year — from now.”

But he clearly feels the environment of fear has created great opportunities. “A simple rule dictates my buying: Be fearful when people are greedy and be greedy when people are fearful.”

Easier said than done!

This week alone, the Dow Jones Industrial Average rose 933 points Monday. On Tuesday, the market ended down 76 points Tuesday, after swinging 700 points intraday. On Wednesday blue chips tumbled 733 points. On Thursday, the Dow fell 400 before turning around and ultimately rallying over 400. Watch Bob Parker of Credit Suisse discuss your respsonses to this week’s Business 360 blog question

These moves used to happen once every couple of decades. Now they are every day occurrences. The volatility has unnerved even the most seasoned investors.

Should you follow Buffett’s advice and jump in?

Experts say that depends on two things; your age and your current exposure to stocks. If you are young, Lakshman Achuthan of Economic Cycle Research Institute says Buffett’s advice is sound.

He thinks it is a good time to start nibbling at companies that have good management and are leaders in their business.

If you are nearing retirement and might need the money in a year or two, Achuthan thinks it may not be a good idea.

Buffett is a long-term investor not — as he himself points out — a market timer.

Stocks may well go down before they ultimately recover. Also, Buffett can afford to take some risk now, because he has been sitting in cash.

He has not been hurt by the staggering decline stock market of the last two months. If you have lost 20-40 percent of the value of your investments, you may not want to risk losing even more.

Why would Buffet show his hand? Some may think he is talking up his position, but that doesn’t really fit with his personality.

Analysts I talked with say it is likely he is doing so out of a sense of concern.

He knows investors are “un-moored” as one put it. Individual investors are confused and looking for guidance. The professional money managers are looking at computer models that don’t go back far enough to work in these markets.

Buffett has the benefit of experience and a tremendous track record.

Do you agree with Buffett’s call? Do U.S. stocks look like a good buy or do you feel investing in Wall Street is a dangerous game?

LONDON, England — The dow soared almost 1,000 points Monday in one of the most spectacular rallies in history.

Most of the gains came in a rocket surge in the last two hours. You would think champagne corks would be popping around the country. And yet I have not heard one analyst say they trust it. In fact many are advising clients to use it as a chance to sell and reduce their risk exposure.

Why the pessimism? The rally happened on low volume, with the bond market closed. And it was driven by the same factor which relentlessly drove us lower last week. Fear. This time investors, desperate to make up lost ground, are afraid to miss any rally.

We may be near the bottom, but few on Wall Street think Monday’s rally is sustainable.