Macro

Distress remained severe as foreclosures peaked and unemployment hit 10%, and the CRE crisis deepened with a lag, but the March market bottom and Fed liquidity flood let home prices bottom by mid-year.

General Motors filed for Chapter 11 bankruptcy, marking the largest industrial collapse in U.S. history, with the federal government injecting $30 billion and taking a 60% ownership stake. The restructuring plan includes closing plants, shedding brands like Saturn and Hummer, and reducing debt by over half. The move signals a major shift in the auto industry, with long-term profitability uncertain and taxpayers facing potential losses as the government prepares to eventually exit its ownership position.

Consumer/auto mood bottoms

General Motors filed for Chapter 11 bankruptcy with $172.8 billion in debt, prompting a U.S. government bailout increasing its stake to 60% and a restructuring plan involving plant closures and a focus on core brands. The move, part of a broader auto industry overhaul, will see GM reemerge as a leaner entity backed by $50 billion in U.S. aid and $9.5 billion from Canada, while triggering its removal from the Dow Jones Industrial Average.

From the March abyss, $787B stimulus, the GM/Chrysler restructurings, Cash for Clunkers and China's stimulus pulled order books off the floor into a real recovery by year-end.

ExxonMobil is acquiring shale gas leader XTO Energy in an all-stock transaction valued at $41 billion, enhancing its unconventional oil and gas resources. The deal combines XTO's U.S. resource base and expertise with ExxonMobil's global scale and R&D, aiming to boost production and supply. Expected to close in Q2 2010, the acquisition signals a strategic shift toward shale and could influence energy market dynamics.

The year opened in the wreckage of the crash with crude near $40, but massive stimulus and Chinese demand roughly doubled prices back toward $79 by December, pulling owners out of despair into recovery.

The Walt Disney Company is acquiring Marvel Entertainment for approximately $4 billion in a stock and cash deal, gaining rights to over 5,000 characters including Spider-Man and Iron Man. The move aims to boost Disney's content and licensing reach, with Marvel's CEO overseeing integration; Marvel stock surged 27% while Disney's dipped slightly.

Ad markets and equities bottomed in March in the worst ad year on record, then recovered, with Comcast's NBCUniversal deal reviving media consolidation. From trough toward neutral.

On June 26, 2009, the U.S. House narrowly passed the American Clean Energy and Security Act by 219 to 212, the first time either chamber of Congress approved an economy-wide cap-and-trade system for greenhouse gases. The bill would have capped power-sector carbon emissions and required electric utilities to meet 20% of demand from renewables and efficiency by 2020. It stalled in the Senate and never reached a floor vote.

Crisis trough, industrial demand destruction

Gold decisively broke the $1,000 level on dollar weakness and unease about central-bank balance-sheet expansion. Unlike brief spikes in 2008, the move held, beginning a two-year run to nearly double that level.

Prices bottomed in the first quarter, then China's massive stimulus reignited base-metals demand and gold held above $1,000 as dollar hedging went mainstream, driving a powerful second-half recovery in materials revenue.

The government injected fresh TARP capital and ring-fenced $118 billion of assets after Merrill's surprise $15 billion quarterly loss nearly derailed the merger. BofA shares had collapsed 80% in three months, reigniting bank nationalization fears.

The finance sector is sharply negative this month, weighed heavily by investor skepticism over Geithner’s lack of clarity in the bank rescue plan, which triggered a 382-point drop in the Dow. While the U.S. government’s move to take up to a 36% stake in Citigroup provided some floor, the absence of broader confidence in policy direction keeps sentiment subdued.

Oracle is acquiring Sun Microsystems for $7.4 billion, gaining control of key technologies like Java and Solaris. The deal strengthens Oracle’s position in both software and hardware, enabling tighter integration of enterprise systems. Market implications include increased competition with rivals like IBM, HP, and Dell, and long-term influence over Java’s openness and database optimization.

financial mood bottoms; IT spending frozen

Pfizer agreed to acquire Wyeth using cash, stock and rare crisis-era bank financing, launching a wave of defensive pharma consolidation ahead of patent cliffs. On the same 'Bloody Monday', US companies announced more than 70,000 layoffs.

Reform anxiety hung over the year, but the March recovery, Pfizer's $68B Wyeth deal, and PhRMA's June deal with the White House to shape the bill favorably kept my worst fears in check; the sector closed mildly positive.

Defense Secretary Robert Gates proposed a $534 billion FY2010 budget prioritizing counterinsurgency and irregular warfare capabilities, cutting legacy systems like the F-22 Raptor and presidential helicopter program. The shift targets current threats in Iraq and Afghanistan, favoring drones, helicopters, and troop health, but faces resistance from defense contractors and lawmakers concerned about jobs and strategic readiness.

Gates's April weapons cuts (F-22 capped at 187, Future Combat Systems and VH-71 killed) hurt the primes' program pipeline, partly offset by the December Afghanistan surge in operations spending.