CNN Financial News Producer
It’s coming down to the wire for General Motors.
With GM rapidly burning through its cash reserves due to hefty losses amid an historic slump in auto sales, President Obama said the Treasury Department would give the automaker the cash it needs to continue operations on the condition that GM restructure its debt or file for bankruptcy by June 1.
And the automaker a midnight deadline for its bondholders to reach a restructuring agreement.
GM’s chief executive officer Fritz Henderson has repeatedly said that the difficulty in inking a deal makes a bankruptcy filing for the automaker "probable."
A spokeswoman for GM last week said the company continues to plan for a bankruptcy, which is the likely next step if no agreement is reached.
Chrysler, dealers on edge
And Wednesday is judgment day for Chrysler and hundreds of auto dealers, when their fate could be decided in bankruptcy court. But some experts think it's already a done deal.
The federal judge in Chrysler Chapter 11 case could decide on May 27 whether the automaker can pull its choice assets - its best-performing factories and dealerships - out of bankruptcy and sell them to a newly-formed incarnation of itself, called Chrysler Group.
The new Chrysler Group would be controlled primarily by a trust fund used to pay future health care expenses for the UAW, which will own the majority share of 55%. Italian automaker Fiat will own 20%, at least initially, though it could eventually increase its share to 35%. Minority stakes would go to governments: 8% for the U.S. and 2% for Canada.
Home prices keep getting clobbered.
More troubling news on the housing front today. The S&P/Case-Shiller National Home Price Index shows a more than 19% decline in prices in the first quarter of 2009 compared with the first quarter of 2008. That’s the largest decline in the measure’s 21-year history.
Home prices have fallen more than 32% since peaking in the second quarter of 2006 and are at levels not seen since the end of 2002.
Sun-Belt cities still had the largest year-over-year declines in March, with Phoenix prices down 36%, Las Vegas off 31.2% and San Francisco dropping 30.1%.
Two cities have now have fallen more than 50% from their peak prices: Phoenix is down 53% since June 2006 and Las Vegas is off 50.4% from its August 2006 high. Dallas prices suffered the smallest loss from peak, just 11.1% since June 2007.
Gas prices keep climbing
The end of the long holiday weekend brings gasoline prices ever closer to $2.50 per gallon.
Gas rose 1-tenth of a cent to $2.425 overnight, the 28th straight increase. In the last 28 days, the average price of gas has increased 37.7 cents, or 18.4 percent.
But gas is still down $1.68, or 41.0%, from the record high price of $4.114 that AAA reported on July 17, 2008.
The highest gas prices are in Alaska ($2.737). The cheapest gas prices are in Missouri ($2.270).
Consumer Confidence sparks a rally on Wall Street
Stocks soared in the first hour of trading, following a choppy open, after an upbeat consumer confidence report raised hopes that the economy is stabilizing.
The gains came despite that dismal housing report, concerns about North Korea’s nuclear program and the fate of General Motors and Chrysler.
Stocks ended last week essentially flat, but economic worries continue to hang over investors, who are coming back from the long weekend.
Anderson Cooper goes beyond the headlines to tell stories from many points of view, so you can make up your own mind about the news. Tune in weeknights at 8 and 10 ET on CNN.
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