This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.

And I thought things looked bad last week (Car Biz: Dark days in Detroit and beyond). The skies do indeed look dark in Detroit and the auto industry as a whole. But now instead of weak sales and slow growth, we are looking at plummeting sales and the very real possibility of bankruptcy and further consolidation throughout the industry.

Yesterday, as Zac Bissonnette noted, General Motors (NYSE: GM) dropped like a stone to a 58-year low. This earlier low point came before the Korean War, when gas cost less than 30 cents a gallon. Looking back, of course, we can see that GM had some great years ahead of it. If only the future looked so bright now.

Today, an S&P analyst quoted on Bloomberg said that the Big Three could face bankruptcy as macroeconomic factors "overwhelm them." This follows yesterday's comment from S&P that debt from GM and Ford Motor Company (NYSE: F) may have to be downgraded again, even deeper into junk status.

GM has replied to S&P's comments, saying that while it does indeed face "unprecedented challenges," it does not consider bankruptcy an option at this time. But then again, what else are they going to say?

Stock futures in the U.S. are up this morning, indicating a potentially strong opening for the financial markets.

While volatility is likely to remain high, positive futures suggest that the co-ordinated rate cuts by central banks are having the intended effect. European markets have moved higher, with the FTSE 100 and DAX up over 1%.

Markets may also be buoyed by reports that the U.S. Treasury is considering taking an ownership stake in major banks. This follows the announcement of a similar plan in Great Britain. The plan, which amounts to a partial (and voluntary) nationalization of the banks, seems to be generating more enthusiasm and confidence than the vague $700 billion bailout already approved by Congress.

Additional positive news came from International Business Machines (NYSE: IBM), which released preliminary third quarter results above analyst estimates. The stock is up 4.6% to $94.76 in pre-market trading. Sales were down, but the company showed impressive results nonetheless, suggesting that other large tech firms may be able to weather the global slowdown.

Analysts will be focused on weekly jobless claims and August wholesale inventory reports for further clues about the state of the economy. The end of the ban on short selling may act as another market catalyst.

His name is not exactly familiar and his official title is a bit much -- Interim Assistant Secretary of the Treasury for Financial Stability and Assistant Secretary of the Treasury for International Economics and Development -- but 35-year-old Neel Kashkari is now one of the most powerful people in the global economy. As the head of the new Office of Financial Stability, it's his job to start spending the $700 billion Congress approved to stabilize the financial system.

As some commentators enjoy pointing out, Kashkari is a former rocket scientist, having earned Bachelor's and Master's degree in engineering from the University of Illinois and worked as a mechanical engineer at TRW, where he developed latches for the the Next Generation Space Telescope. He left engineering for finance, parlaying an MBA from Wharton into a gig at Goldman Sachs (NYSE: GS), where he rose to Vice President, specializing in information technology investment banking.

So there's little doubt that he's a smart and hard-working guy. And in the current administration, that's a great accomplishment.

But the question isn't whether Kashkari is smart. The question is whether he has any idea how to use all that money to stabilize the global financial markets. And a quote from Kashkari I dug up does not inspire confidence. In September, at the right-wing American Enterprise Institute, Kashkari reportedly declared, "I'm a free-market Republican."

It's no surprise, of course, that a Bush administration official would describe himself as a free-market Republican. But it does suggest that Kashkari may have trouble figuring out how to restore confidence in those supposedly free markets.

Shares in Google Inc. (NASDAQ: GOOG) went on a wild ride late yesterday. By some reports, the stock fell as low as $25 per share just before the close of trading. Other sources say it went to penny!

Either the company is in far worse shape than anyone realized or something isn't quite right at NASDAQ.

Of course, the stock wasn't really in that much trouble. It turns out that a trader sent an unusually large number of orders at 3:57 pm, and this caused the stock price to move wildly, both high and low. A NASDAQ spokesman said, "A market participant sent in a large number of orders and drove the price down at approximately [3:57 p.m. ET] which caused the bid-offer to be artificially low due to their mistake."

Was it a mistake or a diabolical plot? No word on the trader's motivation. But all trades above $425.29 and below $400.25 will be canceled. The stock's closing price was reset to $400.52.

Not everyone seems to have gotten the message though. Today, at 2 pm, Google is trading at $413.35. Google Finance shows this as a 3.3% gain on the day. However, other sites show the same price but report the gain at nearly 30%. I assume that will adjusted too.

This is part of a weekly series about the car business. The auto industry plays an important role in the global economy, and record-high oil prices and a global slowdown have contributed to a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.

September car sales reports are due this week, and no one in the auto industry is looking forward to the monthly numbers, especially no one in Detroit.

Expectations are that car sales will be lower once again. According to analysts quoted at Bloomberg, sales at General Motors (NYSE: GM) and Ford (NYSE: F) will be down over 20%, while sales at Chrysler will be down over 30% from last year. Japanese producers also are expected to see lower sales, with the Japanese Big Three Toyota (NYSE:TM), Honda (NYSE: HMC) and Nissan (NASDAQ: NSANY) all down in the 20% range.

The industry is sliding down toward the magic number of one million cars sold in the U.S. for the month. The last time fewer than a million cars were sold in a month was February 1993.

There's been a lot of talk about how the proposed bank bailout is somehow socialist. Senator Jim Bunning recently said that the bailout is "financial socialism," as well as just being plain old "un-American." Congressman Ron Paul has made similar statements, and some of the bloggers here at BloggingStocks have joined in the chorus as well (here and here).

Now, I understand that the bailout violates the much loved principles of 'free markets' and 'democratic capitalism', but we can't let this violation muddy the meaning and history of different economic forms. In the long history of capitalism, socialism has represented an alternative that fundamentally challenges the capitalist structure of political and economic power. This bailout does no such thing.

If the bailout were truly socialist, it would result in long-term state ownership of the banking industry. No such option is on the table. Even getting a minority, non-controlling interest in the banks in return for the massive public investment has been controversial and thus far impossible.

Socialism has a long and complicated and even contradictory history. But the basic principle is pretty clear: economic activity should benefit all citizens and not just a small upper class. Accordingly, in a socialist state, major industries should be publicly owned and wealth should be shared. There are plenty of examples of socialism in action, including the state-owned industries in much of Europe after World War Two, as well as the fairly weak political forms of the welfare state in the U.S., including the Social Security system.

This is the first in a weekly series about the car business. The auto industry plays an important role in the global economy, but record-high oil prices and a global slowdown have created a crisis in the sector. This column will highlight some of the interesting stories that emerge as that crisis plays out.

Sure, the economy is in the tank and the stock market is teetering on the edge of a very steep cliff. But the severity of the situation really hit home with shocking news about a beloved secular American feast day: General Motors (NYSE:GM) announced this week that it will not buy ad time during the 2009 Super Bowl (that's Super Bowl XLIII for all you Roman numeral lovers).

It seems that it was just yesterday that GM was promoting the new 2007 Cadillac Escalade at Super Bowl XL. Sales of the Escalade -- perhaps the most over-the-top of the gigantic SUVs that so many Americans fell in love with -- had been falling, and GM hoped to recapture consumers' bling-addled imaginations with a shiny new model displayed, appropriately enough, on a fashion runway. It was not to be, though, as Escalade sales continued to fall.

And who can forget GM's adorable suicide robot ad from Super Bowl XLI? Some stick-in-the-muds found it a bit insensitive, but it did get people talking. It did not, however, help GM increase its sales.

And that's the basic problem. Critics have long argued that GM relies too heavily on cheap redesigns and flashy advertising to sell cars, rather than focusing on good engineering and construction. The fact that GM is bailing out on the biggest advertising day in the media calendar suggests just how desperate it is. Maybe it has learned the lesson that you can't sell cars no one wants, no matter how much you spend on advertising. Let's hope that the money saved on Super Bowl ads is spent on making cars that can compete with Toyota (NYSE:TM) and Honda (NYSE: HMC).

So where do the CEOs of General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler go when they need to turn their companies around? Are they huddled in their boardrooms in Detroit, planning sales strategies with top executives? Are they cracking the whip in their design studios as they seek to build the perfect car?

Nah. They go where every other corporate bigwig goes when there's trouble afoot: Washington, D.C., home to the world's most dependable source of capital -- the U.S. Treasury.

This week, Rick Wagoner of GM, Alan Mulally of Ford and Bob Nardelli of Chrysler are testifying before Congress as they go fishing for $25 billion in funding to help develop more fuel efficient cars. Now that the SUV craze is over and Detroit has consumed the hundreds of millions in fat profits those trucks produced, the car companies find that they failed to save for a rainy day.

It's more than a little ironic that the one-time powerhouses of the American economy are begging the federal government for help. Major corporations have spent the last 40 years fighting government involvement in the economy -- the Big Three fought government rules requiring seat belts, for goodness sake. And GM played a major role in defeating national health insurance decades ago, among many other sins committed in the name of maintaining the glorious free market. But when they hit a wall, the corporate powers know just where to go -- and it's certainly not to the free market. No, Uncle Sam is a far more reliable source, especially in hard times. So much for free market capitalism.

The only problem is, with the bailout of AIG among others, Detroit may not like its place at the end of the state capital line. And the Big Three had better hope that voters don't start wondering why the government is spending the limited capital of the American people on an industry that is currently dedicated to lowering the wages and eliminating the benefits of its workers.

I certainly don't want to see large American companies go out of business. I just hope that they repay the generosity of the tax-payers with something other than low wages and canceled pensions.

UPDATE: In response to a question in the comments about GM's role in opposing national health insurance, you can start reading about that shameful history in a New Yorker piece by Malcolm Gladwell. Here's an excerpt:

In 1945, when President Truman first proposed national health insurance, they [union leaders] cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther [the national president of the U.A.W at the time]...believed that risk ought to be broadly collectivized. Charlie Wilson [president of G.M.], on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.

If that's too 'liberal media' for you and you need something more academic, try For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton, 2003) by Jennifer Klein, a labor historian at Yale. Please send your revised analysis to me after you do a little reading . . .

A recent post about the much anticipated Chevrolet Volt generated an unusual number of comments, and most readers seemed pretty optimistic about the battery powered car. I'm sure this makes the beleaguered executives at General Motors (NYSE: GM) breathe a little easier. But I wonder if those readers will maintain their optimism now that photos of the actual production Volt have been revealed.

As you can see, the production Volt doesn't look much like the original concept (see below for the original). The real world Volt looks much more like a Japanese hybrid (I see a Honda crossed with a Malibu) -- which is to say it looks like a smooth jelly bean that somehow got wheels.

I'm sure the design makes sense in terms of efficiency and air flow. But this Volt is far from what was implied by the original model.

Apple (NASDAQ: AAPL) CEO Steve Jobs joked about rumors of his ill health today. At the "Let's Rock" event in San Francisco, he flashed a quote from Mark Twain on the screen: "The reports of my death are greatly exaggerated."

Bloomberg accidentally published an obituary for Jobs in late August, feeding fears that Jobs was sick again. It quickly retracted the obituary, claiming that it was an accident that occurred during an update of the 17 page article. Even so, some analysts are worried about Jobs' health.

By one report, Jobs looked "thin but energetic" at today's event. Jobs announced several new Apple products, including a thinner iPod Nano and an updated iPod Touch. According to macrumors.com, Apple hopes to sell the iPod Touch as gaming device, and a number of games were displayed to the audience. There is also a software update for the iPhone, and a new iTunes (version eight for those keeping count).

But the best news for Apple investors was probably the simple fact that Jobs was up on the stage, joking about his health and looking reasonably vigorous. More than most, the health of the company and the CEO are deeply entwined.

Sales of vehicles from Detroit's Big Three have been weak and getting weaker lately. But the bad news is even worse when you look at just basic passenger cars. According to a piece in BusinessWeek (appropriately titled "Car Sick"), American products accounted for less than a third of all car sales in July, a new low for the industry.

In July, imports grabbed 68% of passenger car sales in the U.S., leaving General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler with only 32%. And some of that meager number include fleet sales to rental agencies, which produce very slim profits. Factoring those out, BusinessWeek estimates that Detroit's share of the American passenger car market is about 25%.

One stunning illustration of just how bad things are: in July, GM's entire Buick division sold just 6,000 cars. Compare that to just one Toyota model, the Camry, which sold over 42,000 units in the same period. And there are roughly 2,700 Buick dealers, about twice the Toyota figure, which means that on average each Buick dealer sold 2.2 cars during the month. You have to wonder how they manage to stay open.

It's no secret how this situation came about. The Big Three bet their collective house on trucks and SUVs in the 1990s, not cars, and now they are paying the price of that unwise gamble. Despite the arrival of decent (though hardly stellar) cars like the Chevy Malibu and the Ford Focus, American passenger cars have a long way to go before they can once again sustain the American auto industry.

The auto industry is deep in the weeds right now, particularly in the United States. American manufacturers are hemorrhaging money -- General Motors (NYSE: GM) alone has lost $30 billion in the last three years -- as high gas prices and an unofficial but very real recession forces consumers to abandon their American-made trucks and SUVs by the millions.

Even with the pronounced shift toward smaller and more efficient cars, the overall auto market in the U.S. is shrinking thanks to the poor economy, and most manufacturers are selling fewer vehicles. But one company stands out as an exception to the rule of declining sales: Honda Motor Ltd. (NYSE: HMC). In the first seven months of 2008, Honda increased its sales by over 3%. By comparison, Chrysler lost 22%, GM fell 17%, Ford (NYSE: F) lost 14% and even mighty Toyota (NYSE: TM) saw a decline of 7%.

An interesting quote in The New York Times from Tetsuo Iwamura, the president of Honda's North American operations, sheds light on how Honda has managed this impressive feat. Honda, Iwamura said, "is a philosophy-driven company." And what is Honda's philosophy? According to Iwamura, "we want to make Honda the company that society wants to exist."

From an American perspective, this is an extraordinary statement. American automakers have followed a very different philosophy for many years, one in which fat and easy profits from poorly designed and hopelessly wasteful SUVs take precedence over the long term health of both the auto industry and society as a whole. But Detroit is suffering now for its short-term approach, while Honda is showing both consumers and investors the value of planning for the long run. And at $32 a share and a P/E of 10, Honda looks like a good long-term buy.

According to a Reuter's report, General Motors (NYSE: GM) is finding "significant interest" in the assets it is trying to sell to raise capital. The biggest asset on the trading block so far is Hummer, the militaristic luxury SUV line that is variously loved and loathed in different corners of the country.

Whatever your feelings toward Hummer, $4 a gallon gas has made it far less attractive to American consumers. And having lost over $50 billion in the last three years -- that's right, $50 BILLION -- GM sure could use the cash it would get from its sale.

At a plant opening in Thailand, GM confirmed that it has been in negotiations with India's Mahindra & Mahindra Ltd. to sell the Hummer division. Automakers in China and Russia are also reportedly interested.

Mahindra is a large and growing company, one that you'll hear lot about in the near future. It's a $150 billion conglomerate that already sells tractors in the U.S., and starting next year it plans to sell a diesel pickup truck here as well. Mahindra got its start making Willys Jeeps in India after World War Two, and now controls most of the utility vehicle market there. Hummer could make sense as a luxury badge for the company, one that it could sell to oligarchs and new capitalist kings throughout Russia, China and the Middle East. The Hummer's days in the U.S. may be limited, but it may have a future in the more turbulent emerging markets where military looks make more sense and where poor gas mileage is less of a problem.

The Federal Reserve has rightly been worried that the economy may be both too hot and too cold at the same time. But today, the Fed leaned toward the recession side of the worry ledger and left the federal funds rate at 2%.

In a statement announcing the decision to keep rates as is, the Fed stated that "Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee."

So both inflation and a serious recession are still cause for concern. But in leaving rates alone, the Fed announced that low or negative growth rather than an inflationary spiral is now the main problem.

There are good reasons to focus more on growth rather than inflation. The price of oil is falling and talk of a global slowdown is building. On top of that, labor is at an epic low in terms of political and economic power, so the price-wage spiral is unlikely to occur.

Today's move (or non-move) suggests that the next change in interest rates could be down.

The SEC announced that it will fine Pax World Management $500,000 for violating its own restrictions on buying stocks. Pax World is a 'socially responsible' investment company, operating mutual funds that do not invest in companies which produce harmful things like weapons, alcohol and tobacco.

I guess the return on cluster bombs and cancer sticks was just too tempting.

Pax has issued a statement in which CEO Joseph F. Keefe apologizes for the violation of its self-imposed rules. (He also makes it clear that it occurred before he became CEO). Keefe states that investors were not harmed financially.

By way of explanation, Pax cites the SEC's Settlement Order, which states that between 2001 and 2005, two of Pax's mutual funds bought stocks "that either were not socially screened prior to purchase or had failed a screen. Of these, 10 securities (out of approximately 650 purchased by Pax World Funds during that time period) actually failed the social screens and therefore should never have been purchased."