Program Note: Be sure to tune in to watch CNN Chief Business Correspondent Ali Velshi give us an update on today’s economic news tonight on AC360° at 10pm ET.

The government said late Monday that it’s taking a $6 billion stake in GMAC, the financing arm of General Motors.

Andrew Torgan
CNN Financial News Producer

There’s an old saying in the car business: “actual sticker price may vary.” The same is holding true for the bailout of the auto industry. The government said late Monday that it’s taking a $6 billion stake in GMAC, the financing arm of General Motors. The Treasury Dept. is injecting $5 billion directly into GMAC in exchange for preferred equity shares. It will also lend $1 billion to GM that the automaker will invest in GMAC, which needs the funding to convert to a bank holding company — a necessary step to receiving the bailout money. GMAC is critical to the automaker’s recovery. It’s the biggest lender to GM’s 6,500 dealers nationwide, providing financing they need to operate and buy vehicle inventory. The failure of GMAC could spark widespread failures among GM’s dealership network and cut even more deeply into auto sales.

More bad news on the housing front this morning… home prices posted another record decline in October, falling 18% compared with a year earlier. The 20-city S&P Case-Shiller Index has posted losses for a staggering 27 months in a row, with 14 of the 20 cities setting new price decline records in October. Sunbelt cities suffered the most, but most of the country is watching home values fall. In Phoenix prices have plunged 32.7% since October 2007, Las Vegas home values are down 31.7% year-over-year, while San Francisco prices fell 31%. Miami, Los Angeles, and San Diego recorded year-over-year declines of 29%, 27.9% and 26.7%, respectively.

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Andrew Torgan
CNN Financial News Producer

The Fed today is widely expected to lower its key shot-term interest rate by a half point to 0.5%, the lowest level on record. It would be the 10th rate cut since Sept. 2007 as the central bank continues the most sweeping effort to stabilize the economy in its history. The decision is expected around 2:15 p.m.

Consumer prices plunged in November by the largest amount on record as energy costs posted nearly double the decline of the previous month. The Consumer Price Index — a key reading of inflation — fell 1.7% last month, surpassing the previous record decline of 1% set in October. Both drops were the largest one-month declines on record dating to February 1947, reflecting the effects of the recession gripping the country.

Construction of new homes plummeted in November by the largest amount in nearly a quarter-century, as builders slashed production in the face of an economy in recession. Housing starts fell nearly 19% last month, the steepest drop since March 1984.

Former Wall Street powerhouse Goldman Sachs posted its first loss as a publicly traded company, serving as yet another reminder that no corner of Wall Street has escaped the ongoing financial crisis. The investment bank said it lost $2.1 billion during the fourth quarter — its first loss since it went public in 1999. Rival Morgan Stanley reports earnings on Wednesday.

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Les Christie
CNNMoney.com

American homeowners will collectively lose more than $2 trillion in home value by the end of 2008, according to a report released Monday.

The real estate Web site Zillow.com calculated that home values have dropped 8.4% year-over-year during the first three quarters of 2008, compared with the same period of 2007.

Some 11.7 million Americans are now “underwater,” owing more on their mortgage balances than their homes are worth.

Zillow collects home values and analyzes home price trends in 163 markets; all but 30 registered price drops over the nine months ended Sept. 30, compared with the same nine-month period of 2007.

“This year marked the acceleration of the market correction, and is likely to end with the eighth consecutive quarter of declines in home values,” said Stan Humphries, Zillow’s vice president of data and analytics. “Homeowners in most areas we cover are struggling with foreclosures pouring into the market, large amounts of negative equity and dropping home values.”

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Program Note: Be sure to tune in to watch Ali’s full report on the latest news on unemployment, the auto bailout, and the housing market tonight on AC360 at 10pm ET.

Ali Velshi | Bio

CNN Chief Business Correspondent

November Employment Report

Jobs losses have accelerated dramatically

• November (-533,000) is the worst single month loss of jobs since 1974
  -  Economists has predicted that 320,000 jobs would be loss
• Total loss for the first 11 months of 2008: 1.9 MILLION
  -  That’s an average of 172,000 jobs lost PER MONTH
• Economists say that in a healthy economy, just to keep up with the growth in the working-age population, we need to ADD 100,000 to 150,000 jobs PER MONTH
  -  So, in a good year, we should add 1.2 MILLION to 1.8 MILLION jobs
  -  Keep in mind that Obama says that his stimulus plan will add 2.5 MILLION jobs by 2011

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Andrew Torgan
CNN Financial News Producer

The employment report for November is out and it’s a shocker: 533,000 jobs lost — the largest monthly job loss total since December 1974. That’s far more than the 325,000 we were expecting. That brings the total number of jobs lost so far this year to 1.9 million.

The numbers for September and October were also revised higher, which means two-thirds of this year’s job losses have occurred in the last three months. And that three-month payroll loss of 1.2 million makes it the worst three-month streak in nearly 34 years (Dec ’74 to Feb ’74). The unemployment rate, meanwhile, rose to 6.7% from 6.5% in October.

Stocks are down sharply after the employment report..the Dow down more than 200 points for now.

The CEOs of Detroit’s Big Three return to Capitol Hill this morning. This time around they’ll appear before the House Financial Services Committee to make their case for a larger bailout than they asked for just two weeks ago. On Thursday, the executives – along with UAW President Ron Gettelfinger — generally faced less hostility from members of the Senate Banking Committee than they did at their last hearing, but they still heard a lot of tough questions and the bailout push clearly faces an uphill battle for approval.

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Mary Kane
The Washington Independent

This is supposed to be the season for a break in home foreclosures, a pause in evictions over the holidays.

But it’s not working out that way for everyone. And certainly not for Julio Angulo of suburban Virginia, another victim of a foreclosure machine that seems to be almost unstoppable.

To great fanfare, mortgage giants Fannie Mae and Freddie Mac announced last month they would temporarily halt foreclosures and evictions from Thanksgiving to Jan. 9. One analyst called the move “a giant timeout” to help people stay in their homes while they try to get their loans modified. The decision also avoids the spectacle of two government-controlled finance companies throwing families out on the street at Christmas time.

Days before, Fannie Mae and Freddie Mac unveiled a major rescue plan to streamline modifications of loans to make them more affordable for potentially hundreds of thousands of borrowers. Banks including JPMorgan Chase and Bank of America also suspended foreclosures while trying to restructure troubled homeowner loans.

And Monday, Treasury Secretary Henry Paulson said for the first time that he would consider using money from the $700-billion Troubled Asset Relief Program to help avoid foreclosures.

But nothing seems to shut down the foreclosure machine — at least so far.

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Editor’s Note: Gail Cunningham is senior director of public relations for the nonprofit National Foundation for Credit Counseling (NFCC), Inc.

By Gail Cunningham
Special to CNN

When you sit across the desk from someone with overwhelming debt, you can sense their fear before a word is spoken. And when their home is in jeopardy, the fear fills the room.

I was a credit counselor for 16 years, and quickly discovered that people in debt are very ashamed of their situation.

In all my years, I never counseled anyone who was cavalier about their circumstances, or intentionally sought to dig a deep financial hole. But the shame that accompanies foreclosure tops anything I’ve ever experienced.

There’s something about people losing their homes that is disturbing beyond measure. Failure has become a part of their demeanor.

Read more…

Erica Hill
360° Correspondent

“They’re not being nice to the Dalai Lama, who is a friend of mine. And then all of this earthquake and all this happened and I thought, is that karma? When you’re not nice, that bad things happen to you?” Those words form Sharon Stone on the red carpet in Cannes last week.

Now the Hollywood actress says she’s sorry for her comment. Good, she should be. I’m sure she didn’t mean to say the more than 68,000 people who died in China’s May 12 earthquake did something to deserve this tragic end, but her apology is – for many – too little, too late. CNN’s John Vause, who has been covering the aftermath of devastation and despair from China, has the full story.

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One way to avoid the mortgage crisis? Rent. Sure, you won’t have the tax write-off, but you may lose out on a few headaches, too…or will you? Even if you’ve been paying the rent on time, holding up your end of the contract, your landlord may not be making good on their end. The number of households being served with foreclosure notices was up 112% for the first quarter of this year, compared to the same period in 2007, according to RealtyTrac. More than a third of the properties in foreclosure are not owner-occupied.

Not good.

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Just when you thought you’d never read another new tidbit about the boy wizard, Harry Potter’s creator gives us a reason to break out the butter beer: a prequel is in the works! Sure, it’s only 800 words, and there’s a chance it could remain a secret, but there’s also a very good chance the owner of this precious missive will share.

JK Rowling is auctioning off the hand-written prequel to benefit the charity Dyslexia Action and English PEN, a writers’ association. Get out your checkbooks, and when you have the winning bid, let me know - I want to be among the first to get the details on what happened between the Voldemort’s murdering Harry’s parents and Harry’s 11th birthday, when he learns he’s a wizard.

Beyond the repetitive cable TV news loops of Barack Obama’s clergymen, Hillary Clinton doesn’t have a lot going for her as she faces the fight of her life in Pennsylvania. 

She managed to pull out a win among working class whites in Ohio with a populist pitch claiming that she’d opposed the NAFTA agreement that was the centerpiece of her husband’s trade policy.  That particular hat trick is a little harder to repeat in the Keystone state, however, since a Freedom of Information Act Request has now forced her to open up her records as First Lady. These prove that she actually hosted meetings in support of NAFTA at that time. (See David Sirota’s blog post on the subject.)

So instead of exaggerating her opposition to NAFTA, Team Hillary is repeating a tactic they’ve refined better than anybody else – a multi-point public policy program.  We’ve seen Clinton’s multi-point public policy programs for just about every topic you can imagine, and this one seeks to invent a political advantage from the housing crisis. 

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The euro has finally made it past the $1.50 mark, and I’m not too happy about it. Sure, it’s great news for my sister who lives in France and is paid in euros. Not so stellar for the rest of the family on this side of the pond. I remember back in the days of the French franc when the tables were turned; during one visit, it was something absurd like 6+FF to the dollar. Ahhh, the salad days…

Add the euro news to ever-rising gas prices ($4 this summer, eh? Kids, we’re going on a picnic for vacation, and we’re walking there; it’s in the backyard), the drop in home sales (anyone in the market for a great loft in Atlanta?), and those depressing holiday sales numbers and you’ve got a nasty economic combo. I always try to focus on the positive, but it’s tough with this one. I can only hope that we – and I mean all of us as a country – learn that living within our means (read: not on credit or home equity loans) isn’t the worst way to be. Trust me, I’ve got some work to do on my end. 

Fed Chief Ben Bernanke didn’t make things sound much better today on Capitol Hill; he, too, is concerned. Beef up on his take here:

And speaking of cutting back… the drought in Georgia is getting some more ink. Remember, I just left Atlanta (that loft is still available), where at one point last fall it seemed like the world was 90 days from ending. We were told we were on the verge of running out of H2O. Turns out, the situation is bad, but wasn’t quite the doomsday scenario it originally seemed to be.

Fast forward to today, and a little “wet kiss” from the mayor of Chatanooga, TN: 2,000 bottles of water delivered to Georgia lawmakers. Last week, those same Georgia lawmakers passed a resolution stating a survey done nearly 200 years ago mistakenly put Georgia’s northern line just shy of the Tennessee River. They want the map redrawn, which would give Georgia access to said river, and lots of the wet stuff. You can bet the Tennesseeans aren’t exactly volunteering to comply… But, hey, they did bring Georgians a little refreshment to tide them over. 

If the water delivery can’t bring everyone together, maybe our favorite dancing prisoners can.  They’re back in tonight’s Shot, with some new moves you won’t want to miss. See you at 10!

-Erica Hill, 360° Correspondent