Most of the "service economy" is garbage. It is essentially consists of people pouring cups of starbucks to each other. Service economy works nicely when things are good, but folds like a tent when times go rough. In bad times people cut fast food, starbucks, eating out, first.
From Investment House: "There is also proposed 'stimulus' with respect to the auto industry, and Obama says he is going to address that as well, apparently under the belief that the less than 300K jobs in that woefully obsolete industry have to be saved versus putting the money elsewhere to incent new technologies, indeed even new vehicle propulsion technologies with new companies better able to compete internationally given the stifling fixed costs such as healthcare tied to the Big 3 ($1800 of each GM vehicle goes toward paying healthcare costs). It is hard to see how propping up companies with obsolete business models and declining overall job levels is 'stimulus' for the economy. We need companies that can compete, develop new technologies, and thus create new jobs in order to pull out of this economic crisis. GM and Ford are not going to lead us to prosperity. At best they sap away billions of taxpayer dollars to maintain the status quo, but likely that would only be a stopgap measure before they toppled or demanded more money to prop them up yet again."
Believe it or not he is sorta right, the weight of the sp500 isn't exactly zero but it is GM - .03%+ Ford- .06% = 0.09% of the SP500, LESS THAN ONE TENTH OF A PERCENT. and GM's weight in the DOW is questionable at this point.
I have a 1999 Toyota Solara with 160k miles. It runs just fine and in great condition. I have no reason to replace it and have every belief that it will run to 250k. Its a nice car for everyday driving in the tri-state. Its just as quiet as any Mercedes and the ride over bumpy roads cant be beat. I will gladly place that Solara up against a 1999 Ford Taurus or 2000 Chevy Impala. In fact, I'll gladly place it up against a newer Ford 500/Taurus. In terms of reliability, gas mileage and overall comfort, the ole Solara cant be beat. I have other cars that I use, but I always come back to the Solara for driving in hostile environments such as parking in NYC and driving in the snow. Toyotas were designed for hostile environments. They also look far classier then any Ford or GM vehicle. How many third world countries have GM and Ford vehicles? As for the hummer, every third world army has the good ole Toyota truck with a 50 cal mounted on the back. They dont use hummers because they eat too much gas and not very reliable. The Toyota truck will also get through many off-road places that the hummer cannot and much faster at that.... In order to own a Mercedes or BMW, you have to own a Toyota. The Mercedes and BMW will eventually break down and you will need a vehicle to drive around. Then will come the snow or the times that you will have to drive/park in NYC. For those times, you need a Toyota. Its simply the only brand car that can stand up to the conditions. Drive a Ford or GM and you will get stuck on the GWB. Im not selling the Solara, ever. Until the wheels fall off and that wont be for another 10 years...at least...
The Dow is dollar-weighted (not saying you didn't know this staffpro, just thought I'd mention it for newbies). So, it's easy to figure out. The Dow divisor right now is 0.122834016, and GM's price is 4.36, so if GM went to 0, it would decrease the Dow by 4.36/0.122834016 = 35.5 points. That's about 0.3%, not much. AIG has a tiny effect on the Dow now, too. Not that GM going under wouldn't create a pull on other stocks to go down and move the Dow more, but if GM were isolated by itself, it's not a huge deal.
Most cars bought in the USA are made here. So if we need those 3 million jobs to make the cars they will still be there. Right now we have to many jobs for the amount of cars being sold.