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America's Icons Collapsing Under Economic Recession

By Dustin Ensinger  Posted by Dustin Ensinger (about the submitter)       (Page 1 of 1 pages)   1 comment
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The global economic downturn is taking its toll on some of America’s most iconic companies.  American corporations once thought to be blue-chip are now hovering around $1 per share, making them tempting targets to be the next victims of the Great American Sell-Off.   

Companies such as General Electric, General Motors, Citigroup, Ford and even Warren Buffett’s Berkshire Hathaway have seen their values plummet over the past two years and some are in danger of going the way of Lehman Brothers and becoming extinct.   

“It borders on unbelievable,” Glenn W. Tyranski, senior vice president for financial compliance at NYSE Regulation, told The New York Times. “You’re seeing companies that are just really suffering across the board.” 

Last Thursday, Citigroup’s shares finished the day at $1.02 per share, after falling below $1 per share at one point during trading.  Less than two years ago, Citigroup shares were selling for $55.12 per share.  That represents a fall of 96 percent over the last two years.   

Also on Thursday, GE’s stock price fell to its lowest level since 1992.  Believed to be a model for corporate America, the company has lost 81 percent of its value over the past two years.   

And automaker GM’s price per share fell to $1.86 on Thursday.  As the Washington Post points out, in most cases that price is cheaper than a gallon of gasoline.  The company has lost 92 percent of its value since 2007.  Earlier in the week, GM’s auditors expressed “substantial doubt” that the company would be able to survive without significant government aid.   

Ford has lost 70 percent of its value over the past two years; Bank of America has lost 89 percent; and American International Group is down 97 percent.   

The problem, according to some experts, was twofold.  One, companies grew too diverse and became too entangled in the global financial markets.  And two, many companies provided too much credit to consumers, allowing them to finance their own products.   

"The big surprise is that large companies that we thought were well-capitalized with abundant access to credit and that could access the global market, none of that is helping them," said Ed Yardeni, president of Yardeni Research, an investment research firm, according to the Washington Post. "But a lot of these issues that we thought of as positive are turning back to bite them hard." 

Now, these iconic American companies are in danger of becoming the latest casualties in the Great American Sell-Off.  From July 1978 to July 2008, 16,613 of America’s best wealth producing companies have been sold to foreign entities.  When an American company is sold overseas, the jobs, the technology, the future profits, the tax revenues and a piece of America’s economic sovereignty go with it.   

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Dustin Ensinger graduated from The Ohio State University with a Bachelor of Arts in Journalism and Political Science. He is a contributing journalist for
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