With a reported 46% loss in sales and more than 16.8 Billion dollars, Chrysler is smarting, a lot.

In an effort to cut losses, Chrysler has announced that it would be closing a quarter of it’s 3200 U.S. based dealerships around 789 dealerships. The dealership themselves were caught by surprise when they received mails from their parent company that the dealership would be closing.

Manufacturing, construction and service providing industries have axed hundreds of thousands of employees just to make ends meet.

The unemployment rate rose to 8.5 percent from last month’s 8.1 percent.

5.1 million jobs have been lost since December 2007.

SAN FRANCISCO (INR) — Founder of Bernard L. Madoff Investment Securities, Bernard Madoff was arrested by the Federal Bureau of Investigation agents for alleged fraud.

According to senior employees of the Bernard L. Madoff Investment Securities firm, they were told by Madoff himself the the firm was “a giant Ponzi scheme” and involved tens of billions of dollars.

Via Marketwatch

U.S. markets shot up upon hearing the news of Citi’s fresh restart with S&P 500 up 494 points from a 11 and a half year low.

Peter Cardillo, analyst for Avalon Partners is optimistic saying, “Obviously the news out of Citi is welcoming, we might be in for another day of gains today, and if that’s the case, then we’ll have two days of gains.” (CNNMoney Report)

Citigroup’s collapse toppled the firm’s shares to a low of 87%.

From MarketWatch.com

Management also plans to reduce costs across the company by 20% in the near term and will continue to sell off troubled assets.

Citigroup’s layoffs are the latest in a brutal round of job cuts across the financial industry. The cuts have been sparked by unprecedented losses due to bad credit investments, as well as the subsequent precipitous drop in banking and other financial-services business amid the worst economic conditions in 70 years.

Companies like Yahoo, Hewlett-Packard and Sun Microsystems have had similar problems and have dropped several axes to alleviate the recession pains brought about by bad investments and credit.

Beleaguered global insurer American International Group (AIG) is likely to sell its valuable assets, including its local subsidiary, Philippine American Life and General Insurance Co (Philamlife), within six to nine months, an AIG official said Tuesday.

AIG is selling various valuable worldwide assets outside its property and casualty insurance business, including Philamlife, to pay off its expensive $61 billion debt to the US government. The emergency loan kept AIG, once the world’s largest insurer, from going under after toxic mortgages led to massive losses. From ABS CBN News

Moves like this are resounding throughout the world as financial institutions slowly crumble under the heel of the growing recession.

Floating Lifeline – The Bill’s Key Points

Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.

Homeownership Preservation

EESA requires the Treasury to modify troubled loans – many the result of fraudelent and low doc/no doc applications – wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.

Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program by charging a small, broad-based fee on all financial institutions.

No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits ‘golden parachutes’ and requires that unearned bonuses be returned.

Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse.

Prolonging the inevitable

The obvious factor of the bill being turned down the first time was it’s bloated price tag. Several cities have already taken to the streets and voiced their protests against the bill, stating that the Bank’s responsible for the crisis shouldn’t kept afloat using taxpayers money. But the bill’s authors claim that if nothing is done, the U.S. markets would spiral into an even deeper crisis.

Melamine Defined by Wikipedia

Melamine is an organic base and a trimer of cyanamide, with a 1,3,5-triazine skeleton. Like cyanamide, it contains 66% nitrogen by mass and, if mixed with resins, has fire retardant properties due to its release of nitrogen gas when burned or charred, and has several other industrial uses. Melamine combines with cyanuric acid to form melamine cyanurate, which has been implicated in the Chinese protein export contaminations.

Melamine’s Toxicity

Melamine by itself is not toxic in small doses. But when mixed with cyanurate acid it can cause fatal kidney stones due to the formation of an insoluble melamine cyanurate.

A repeat of the 2007 Chinese Animal Feed Recall

Just last year a similar scandal erupted also in China resulting in the deaths of pets who ingested the pet food also contaminated with melamine. The pets suffered from kidney and acute renal failure due to the crystallized melamine found in their urine.

Action from local Health Officials

Local health officials everywhere are quickly analyzing the isolated milk products imported from China. To alleviate customer worries several associations like the Philippine Baking Industry Group assured it’s customers that it does not import it’s milk products from China.