Financial crisis closes in on GM

Financial crisis closes in on GM


New York: The global financial crisis closed in on two more victims today after General Motors said it would need a government rescue and major US electronics retailer Circuit City filed for bankruptcy.

The news capped another day of gloomy developments in the United States, the world’s largest economy, undermining hopes that coordinated action by governments around the world could keep the global downturn from getting worse.

Fannie Mae, the US mortgage giant bailed out by the government earlier this year, posted a $29 billion loss. Meanwhile the United States expanded its bailout of insurer AIG to more than $150 billion.

The latest dire reports from the United States triggered more woe for Asian stock markets, which lost ground today in line with US shares. Tokyo lost 3.0% while Hong Kong was off 0.6% at the mid-day break.

General Motors CEO Rick Wagoner said the US automaker would need state help before Barack Obama takes over the White House in January, telling industry publication Automotive News that time was of the essence.

“This is an issue that needs to be addressed urgently," he said, calling on the government to “overshoot, not undershoot" the level of assistance.

His call for support came as GM shares lost 23% yesterday after analysts at Deutsche Bank said they expected the stock eventually to be worth nothing at all.