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When the Chrysler plant in Newark, Del., shut its doors on Dec. 19, more than 1,000 workers there suddenly joined the ranks of the unemployed.

At least they will be able to get unemployment insurance.

Most jobless workers can’t.

Across the United States, only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to U.S. Labor Department statistics.

They often miss out because they didn’t earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws — usually written in the pre-computer era when tracking payrolls was much slower.

"I think it’s a shock to people that the safety net is in such sad shape," said Maurice Emsellem, co-policy director at the National Employment Law Project, a pro-worker organization advocating for the bill. "A lot of people fall through the cracks."

At a time when the recession is a year old and the number of unemployed has risen to 10.3 million, there is a real question about where federal unemployment dollars should go.

Should they be sent directly to states’ strained employment trust funds, enabling states to keep from raising unemployment taxes on already beleaguered employers? Or should they go to expanding eligibility, supporting states whose policies provide help to more people, who in turn will spend their benefits and boost the economy?

Last year, that approach became part of a federal bill — the Unemployment Insurance Modernization Act — passed in the House, but not the Senate, although then-Sen. Barack Obama was a sponsor.

Advocates like Emsellem always try to expand benefits in tough times, said Douglas J. Holmes, president of the National Foundation for Unemployment Compensation and Workers’ Compensation, a Washington business group. It would be better to skip the debate and ship the money to the state trust funds quickly, he said. "Federal money is not designed to dictate benefits state by state."

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Those who fall through the cracks tend to be low-wage, part-time, seasonal or new workers — not like the 1,000 autoworkers laid off in Delaware.

"Although low-wage workers were almost 2

General Motors shook an already embattled auto industry Friday as it reported a huge quarterly loss that was much worse than expected and warned it is in danger of running out of cash in the coming months.

The nation’s largest automaker reported that it lost $4.2 billion, or $7.35 a share, excluding special items. That’s up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share.

But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter.

In addition, the company said that in the first half of next year its "estimated liquidity will fall significantly short" of what it needs to continue operating. It said the only thing that would save it would be a significant improvement in economic and automotive industry conditions, help from the federal government, better access to capital markets or some combination of those options.

The report was by far the most grim assessment by a company that has insisted it is not considering filing for bankruptcy court protection. While the release did not mention the threat of bankruptcy, the outlook appeared to raise the possibility of such a dramatic step.

In response to questions on a conference call after the report, CEO Rick Wagoner said he would not speculate on whether GM would need to file for bankruptcy protections.

"We’re convinced the consequences of bankruptcy would be dire and extend far beyond General Motors," Wagoner said. "We need to find a way to get through this and that’s our focus."

Shares of GM (GM, Fortune 500) fell 9% Friday to $4.36, a nearly 60-year low.

Industry experts said the incredibly weak October U.S. auto sales that GM and the rest of the industry reported Monday, coupled with Friday’s report, mean that bankruptcy for GM is a very real risk.

"I think we should be worried [about a bankruptcy] right now," said Robert Schulz, Standard & Poor’s senior auto credit analyst. "We were worried before and the relative level of worry is now heightened."

S&P cut GM’s credit rating deeper into junk bond status to a rating of CCC+ Friday afternoon, not far above the D rating that indicates default by a company.

Shelly Lombard, senior high yield analyst at Gimme Credit, an independent research firm, estimates that GM will need to get between $10 billion and $15 billion in federal assistance in order to avoid bankruptcy by 2010 and that the chance of bankruptcy without help is probably 80% to 90%.

"They didn’t want to speak the B word. It doesn’t sound like they have a lot of options if the government doesn’t step forward," she said, adding that aid for the auto industry that has already been approved by Congress amounted to "bringing a Band-Aid to a train wreck."

Both Schulz and Lombard also said that not even a federal bailout may be able to save either GM or Ford in the long-term considering the problems facing the industry.

"To the extent that they do receive some assistance, it’s more buying time rather than a fundamental solution," said Schulz.

Still, experts agreed Congress will need to take swift action to make any difference for the embattled industry.

"This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks," said Dave Cole, chairman of Michigan think-tank the Center for Automotive Research. "When your cash is gone, you’re gone."

One possible endgame scenario reported recently involved a corporate tie-up between GM and Chrysler. Wagoner, without mentioning Chrysler by name, said that GM had ended talks about a possible merger with a Detroit rival to concentrate on the cash crisis it now faces.

"While it’s fair to say we conclude this acquisition could have provided significant benefits, we’ve concluded at this particular time that it’s important we put 100% of our efforts on the immediate liquidity challenges," said Wagoner.

Chrysler issued a statement of its own after GM’s report. CEO Robert Nardelli didn’t comment about the merger talks but said Chrysler would keep looking at various options to end its ongoing losses cash advance loans.

"As an independent company, we will continue to explore multiple strategic alliances or partnerships as we investigate growth opportunities around the world that would aid in our return to profitability," he said.

GM announced a series of steps Friday designed to help it improve its cash reserves by $5 billion. Those steps included cutting another 10% of salaried employment costs, on top of the 20% cut in those costs already planned. In addition to expected staffing reductions, those white collar workers will not get their typical incentive pay next year.

The company will also cut capital spending plans by $2.4 billion in 2009, pushing back development plans for some new models. But it warned that even those steps would not be enough unless conditions improve. It did not announce any plans for additional plant closings or hourly staff cuts in its statement, however.

The company is clearly pinning much of its hopes of weathering the current downturn on an industry bailout from Washington.

"The company has engaged in discussions with various U.S. federal government agencies and congressional leaders about the … the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers," according to a company announcement.

Wagoner joined the chief executives of Ford Motor (F, Fortune 500), privately-held Chrysler LLC, as well as the president of the United Auto Workers union Thursday afternoon in meetings with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., to seek support for a wide-ranging bailout package. Both congressional leaders voiced support for additional help for the sector following their meetings.

Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers’ balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals.

The discussions also touched on whether the government would allow the automakers to tap the $700 billion bailout of Wall Street firms and banks that was enacted last month. Treasury has so far rejected auto industry inquiries about accessing that pool of money.

The automakers also renewed their pre-election request to double the $25 billion low-interest loan program approved by Congress to help automakers convert operations to make more fuel-efficient vehicles and meet the demands of car buyers and new federal rules.

But Wagoner said just doubling the money available under that program won’t solve the immediate cash crisis facing the industry. And for the first time, he put a dollar amount on the cash that automakers are looking for from the federal government right now.

"In the meeting yesterday we talked near-term liquidity support for the industry in the range of $25 billion," he said. "No one said yes or no to that number."

The company’s problems have been building for many years. It has not made money on its core North American auto operations since 2004, and since that time it has run up $72 billion in net losses, including this latest period.

The company did see a one-time $1.7 billion gain from a change in accounting for its obligation to pay for health care for retirees and their family. That allowed it to post a net loss of $2.5 billion, or $4.45 a share, an improvement from the net loss of $42.5 billion, or $75.12 a share a year ago when it was hit by huge special charges.

Much of the net losses in recent years have been due to non-cash charges, such as the ones a year ago. But even excluding those kinds of special charges, GM’s core auto operations in North America have lost nearly $18 billion over the course of the last 15 quarters.

GM’s announcement came on the same day that Ford Motor reported a $3 billion loss in the period, excluding special items. Even Japanese rival Toyota Motor (TM), which has a much better cash position coming into this crisis, announced Thursday that its third quarter earnings had plunged nearly 70%, as it slashed its full fiscal-year outlook by 50%. 

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General Motors’ October U.S. sales plunged 45 percent, and Ford’s and Chrysler’s weren’t far behind, as low consumer confidence and tight credit combined to bring the industry’s sales to an "unsustainably weak level" that is the worst in 25 years.

Automakers sold 838,156 vehicles in October, 32 percent fewer than in the same month last year and the worst performance since January 1991, according to Autodata Corp. and Ward’s AutoInfoBank. The seasonally adjusted annual sales rate of 10.6 million vehicles was the lowest since February 1983.

"It’s really an unsustainably weak level for all manufacturers," said Mike DiGiovanni, GM’s executive director of global market and industry analysis. "This is clearly a severe, severe recession for the U.S. automotive industry and something we really can’t sustain."

The annual sales rate in October 2007 was 16.1 million.

Chrysler’s sales tumbled 35 percent, and Ford’s dropped 30 percent. Toyota’s sales fell 23 percent despite its zero-percent financing offer, and Nissan and Honda posted 33 percent and 25 percent declines, respectively.

Overall, General Motors Corp. sold 168,719 vehicles in October, while Ford Motor Co., including its Volvo brand, sold 132,278 light vehicles and Chrysler LLC’s sales totaled 94,530 units.

If GM’s sales were adjusted for population growth, October would be the worst month of the post-World War II era, DiGiovanni said.

"Clearly, we’re in a very dire situation," he said. Detroit-based GM said its light truck sales tumbled 51 percent compared with the same month last year, while demand for passenger cars fell 34 percent.

Despite the steep drop, GM’s total was enough to keep it ahead of Toyota Motor Corp bad credit cash loans. for the No. 1 U.S. sales spot. Toyota, which rolled out an offer of zero-percent financing during the month, sold 152,101 vehicles. The Japanese company’s light truck sales fell 34 percent, while car sales dropped 15 percent.

Honda Motor Co.’s sales fell to 85,864 vehicles as truck sales fell 29 percent. But sales of cars from its Acura luxury division rose 6 percent.

Nissan Motor Co. sold 56,945 vehicles, and its truck sales dropped 52 percent.

Ford officials said on a conference call with reporters and industry analysts that as bad as October sales were, it’s probably not the bottom.

Emily Kolinski Morris, the Dearborn, Mich.-based company’s senior economist, said that because automobiles are more durable, people can wait without buying a new vehicle until they feel more confident in the economy.

"The answer to when we will start to come out of that trough lies in when the economy comes out of that trough," Kolinski Morris said.

Ford likely will announce car and crossover vehicle production cuts when it announces its third-quarter earnings on Friday, said George Pipas, Ford’s top sales analyst. Truck production cuts earlier in the year have kept inventories low, but car and crossover inventories need to be brought into line, he said.

The Associated Press reports unadjusted auto sales figures, calculating the percentage change in the total vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 23 sales days last month, two less than in October 2007.

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Ordinarily, cash exerts a drag on your returns. It’s safe and liquid, but low yielding. However, these are not ordinary times.

During the great September-October meltdown of 2008, the surest way to curb your losses was to be holding a large chunk of your nest egg in cash or equivalents.

The same goes for portfolio managers of mutual funds.

Scratch beneath the surface of a fund that has escaped with minimal losses, and you’ll probably find a cash-rich asset mix.

This does not mean that managers who remained fully invested are bad managers. On the contrary, they are probably just carrying out their investment mandates.

My personal bias is in favour of fully invested funds. If I’m paying equity fund fees, I don’t like paying the manager to hold cash. I prefer making my own decision about how much cash to hold.

That said, let us now praise those managers who insist on allowing their cash reserves to build if they can’t find stocks to their liking at prices they’re willing to pay. Inevitably, this will result in periods when they lag far behind their market benchmarks and peer groups. But for conservative investors who worry more about capital preservation than beating the market, this can be a fair trade-off.

In today’s market, cash-hoarding managers will shine, assuming they’re good stock pickers and not just picky about being willing to invest. Their cash is a cushion against the ravages of stock markets. And they have more buying power to scoop up bargains than do their fully invested competitors.

Exemplifying this breed of patient money manager is Gerald Coleman, the manager since inception of CI Investments Inc.’s Harbour Fund. Over more than 10 years, this fund in the Canadian-focused equity category has performed in the top 25 per cent of funds over the past one, three, five and 10 years, and holds the top 5-star Morningstar Rating for its risk-adjusted performance no qualifying payday advance.

Avoiding or at least minimizing losses in down markets is one of Coleman’s most important objectives, and one of the ways he accomplishes that is to keep an ample cash reserve, especially when markets are frothy. This helps improve his risk-adjusted return over time and build positions in high-quality stocks at cheap prices.

At the end of September, the fund held 22 per cent of its assets in cash.

Coleman isn’t alone. Deep value manager Larry Sarbit, who’s in the process of selling his Winnipeg firm to Industrial Alliance Insurance and Financial Services Inc., is another good example of a manager with a long history of hoarding cash when he can’t find bargains.

Between 2000 and 2006 while working at AIC Ltd., Sarbit came under criticism for keeping AIC American Focused Fund overwhelmingly in cash, a decision that served investors well during the previous bear market.

True to form, Sarbit U.S. Equity has again been one of the category’s cash-rich funds earlier this year, with a 32 per cent cash reserve in early July.

During a severe market downturn, hoarding cash probably won’t be enough to avoid negative returns. Through the first nine months of this year, CI Harbour has lost 8.5 per cent, and Sarbit U.S. Equity is down 6.8 per cent.

Then again, with the kind of year it’s been so far, most investors would be happy with losses that are only in the single digits.

Rudy Luukko, at rudy.luukko@morning star.com, is investment funds editor of Morningstar Canada.

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LOS ANGELES – A person close to the deal says Steven Spielberg’s DreamWorks studio has signed on with Universal Pictures to distribute its films.

Universal will distribute up to six DreamWorks movies a year domestically and overseas, except for India, said the person, who was not authorized to speak on the record and requested anonymity.

The deal has been anticipated as DreamWorks prepares to break off from Paramount, which has owned the studio since 2006 cash till payday advance.

There has been ongoing friction over the costs of keeping Spielberg and his outfit there.

DreamWorks has lined up $1.5 billion through Reliance Entertainment of India to finance its future film slate.

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Asia-Pacific nations kept up their efforts on Friday to shield the region from the fallout of Wall Street upheaval even as stock markets rallied in response to emergency action from the world’s top financial authorities.

Japan and Australia pumped a further $20 billion into their money markets as lending remained tight despite Thursday’s unprecedented $180 billion made available by the U.S. Federal Reserve to the global banking system.

New Zealand relaxed rules on collateral to ease funding conditions and South Korea’s central bank chief promised to act aggressively and supply enough cash to the financial system to calm markets. Bank of Japan Governor Masaaki Shirakawa will brief lawmakers about the authorities’ response to the crisis later on Friday.

The Chinese government was also trying to stabilize markets, buying shares in three of the biggest state-owned banks and ditching a tax on purchases of stocks.

Asian stock markets rallied on Friday taking cue from Wall Street gains overnight following news of a U.S instant payday loan. Treasury plan to create a fund that would mop up toxic debt, similar to one that helped resolve the savings and loan crisis of the late 1980s.

Britain imposed a temporary ban on short selling of financial stocks on Thursday. The Wall Street Journal reported U.S. regulators were considering a similar step and the Securities and Exchange Commission chairman Christopher Cox told reporters he could make a statement on the issue as early as Friday.

Short selling allows investors to profit from falling prices and has helped bring Wall Street icons to their knees.

The plans offered investors a glimmer of hope for resolution to the 13-month old credit crisis that sank Lehman Brothers, stripped Merrill Lynch and Bear Stearns of their independence and triggered a $85 billion bailout of insurer AIG. 

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Electronic Arts Inc (ERTS.O: Quote, Profile, Research, Stock Buzz) has delayed until next summer its latest Harry Potter video game, one of its more popular franchises that had been expected to boost earnings and revenue this fiscal year.

Shares of EA fell 3 percent after it said on Monday it postponed the “Harry Potter and the Half-Blood Prince” game from November 2008 to coincide with the delayed release of the film of the same name by Warner Bros Pictures.

EA said the title had been expected to generate $120 million in revenue and 13 cents a share in profit in its current fiscal year, which ends March 31, 2009.

The profit represented about 9 percent of the average forecast for the company’s full-year earnings before special items of $1.52 a share, according to analysts surveyed by Reuters Estimates. Analysts forecast full-year revenue of $5.1 billion.

Analysts said that $120 million in revenue implied sales of up to 4 million units of the game, making “Harry Potter” a significant title at EA, whose roster includes hits such as “Madden” football and “Rock Band.”

But Stern Agee analyst Arvind Bhatia said the market may have already factored in some of the potential effect of the delay, since Warner Bros’ announced the movie’s postponement on August 15 no teletrak payday loans. Warner Bros is a unit of Time Warner Inc (TWX.N: Quote, Profile, Research, Stock Buzz).

“I don’t think it will change the revenue and (profit) that they will generate from this title,” he said. “It takes numbers out of this year essentially and put them into next year, so this year goes down slightly,” he said.

Bhatia in August lowered his fiscal year 2009 revenue and profit outlook by $150 million and about 10 cents per share, and raised his 2010 forecast by the same amounts, respectively. He has a “buy” rating on the stock. 

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On Wednesday there was some good news for California, which has been one of the hardest hit states in the housing crisis, when a local realtor group said that sales there jumped 18% in May compared to May 2007.

But the hard times are far from over: Prices took a beating, plummeting 35% during the same period, according to a report from the California Association of Realtors (CAR).

"Home sales exceeded 400,000 (on an annualized, adjusted rate) last month for the first time since early 2007," said CAR President William E. Brown. "While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state."

May was the second straight month of increased sales volume in California, but that followed a disastrous string of 30 consecutive months when sales saw a steady decline.

"What you’re seeing in some of the hardest hit markets, like California and Florida, is that Americans still love bargains," said Mick Larson, a real estate analyst for Weiss Research. "And when the price is right people will buy."

Not everyone is convinced that the time is right. Jonas Lee, a principle of New York-based Redbrick Partners, which buys distressed properties all over the country, says he’s watching California closely, but isn’t ready to jump into the fray just yet.

"We’ve been monitoring sellers of bulk REO (bank repossessed) properties and their prices have gotten more realistic," he said. "But we’re concerned whether this is the end of the decline. We don’t think so. And the decline curve may be bathtub shaped - it goes down and stays down for a long time."

The state-wide median price for a home sold during the month was $384,840, down from $594,530 last May payday loans in one hour. That severe drop probably reflects the fact that there are so many distressed sales and low-priced homes on the market, according to CAR.

"[It’s the result of] a large number of short sales and foreclosures in the market," said CAR Vice President and Chief Economist Leslie Appleton-Young.

The Santa Barbara County area has been particularly hard-hit by falling prices; the median home sold there in May for $400,000, 24% below April prices, and 55% below May 2007.

Monterey County, down 49% since last May, and the Riverside-San Bernardino area, off 35%, also suffered steep losses.

Los Angeles prices fell 21% from a year ago, while San Francisco prices dropped 20%, and San Diego was down 27%.

The increased sales volume helped reduce the inventory of homes on the market to 8.4 months at the present rate of sales. That’s down from the 10.7 months of inventory that was on the market a year ago.

Additionally, far fewer new homes are being built.

"Builders have aggressively slashed housing starts," said Weiss. "That is working inventory levels down."

Most industry analysts agree that the big inventory overhang will have to be whittled down substantially more before home prices can begin to recover.

California experienced some of the biggest run-up in prices during the bubble years, and the state has been hit hard in the slump.

Foreclosures have become a major problem. California recorded 72,000 foreclosure filings in May, the most of any state. Its rate of one filing for every 183 households trailed only Nevada. 

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OTTAWA–A new study reports Canadian cinemas entertained more moviegoers and were much more profitable in 2006.

Statistics Canada says cinemas, including indoor theatres, drive-ins and film festivals, sold 102.9 million tickets in 2006, up 1.9 per cent from 101.0 million the year before.

The increase helped take the sting out of declines in 2004 and 2005.

The motion picture theatre industry recorded total operating revenues of about $1.2 billion, up 2.4 per cent from 2005, while reducing operating expenses.

As a result, operating profits totalled $111.5 million, a substantial increase from $21.6 million in 2005.

The industry posted an operating profit margin of 9.1 per cent in 2006 compared with 1.8 per cent in 2005.

Theatres in Ontario and Quebec accounted for about two-thirds of total national operating revenue.

Ontario theatres continued to dominate the country, accounting for 42 per cent of total operating revenues in 2006 how to get a free credit report. Quebec theatres represented 18 per cent, while those in Alberta and British Columbia each represented 14 per cent.

However, theatres in Western Canada were more profitable than their counterparts in Quebec and Ontario. Those in British Columbia, Alberta and Saskatchewan recorded operating profit margins above the national average.

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Shares of Research In Motion jumped 4 per cent this morning after the wireless email pioneer took the wrap off a new BlackBerry device that had been the subject of leaks and speculation for several weeks.

RIM’s stock was trading up $5.93 at $139.28 on the Toronto Stock Exchange Monday morning after the Waterloo-based company officially confirmed details of the BlackBerry Bold smartphone, which is the first BlackBerry to support so-called third generation, or "3G," wireless technology on GSM networks.

The device, a version of which was thoroughly reviewed on the website CrackBerry.com last week, is expected to be available by "summer 2008," RIM said.

There were no details about pricing or which carriers would be offering the device initially.

RIM touted the BlackBerry Bold as a "top-of-the-line, high-performance smartphone designed for professionals," although the device will likely also appeal to consumers thanks to its camera, video recording and enhanced Web browsing capabilities.

Co-CEO Jim Balsillie said the Bold is evidence that RIM, which says nearly 40 per cent of its 14 million subscribers are now consumers, hasn’t forgot about its core base of corporate clients and their need for secure wireless email.

"It’s pretty fair to say that the Bold does quite a job for cementing our leadership in the (enterprise) side," Balsillie told Reuters. "We understand our roots and we understand the priority there."

The unveiling of the BlackBerry Bold comes amid speculation that Apple Inc. is preparing to launch a 3G-version of its consumer-oriented iPhone device in June.

That has led some to wonder whether RIM’s strategy is to first defend its core market of business users before plunging further into the consumer space with a touchscreen-style device online payday loan.

Last week, for example, RIM revealed a potentially important partnership with Germany’s SAP AG, which makes business management software, to offer back-end business applications natively on the BlackBerry platform.

Mike Abramsky, an analyst at RBC Capital Markets, said in a note to clients that the new BlackBerry device is likely to be the first of several new models in 2008, including a flip phone version of the BlackBerry to compete with devices from Motorola Inc. and Nokia Oyj and, possibly, a multimedia-focused "iPhone-killer."

As for the Bold, Abramsky said it could spark "a healthy mini-product cycle in U.S., deeper penetration in Europe and Asia, where 3G is competitively available."

Jeffrey Fan, an analyst at UBS Investment Research, said in a note to clients that the BlackBerry Bold is reportedly to go on sale at AT&T Inc. for $300 to $400 (U.S.).

A spokesperson for Rogers Communications Inc., the only Canadian carrier with a compatible network, could not immediately be reached for comment regarding the BlackBerry Bold’s availability in Canada.

Rogers recently announced it had a deal with Apple to offer the iPhone in Canada, but has not released details on a launch date or pricing.

Despite numerous reports that suggest RIM is in danger of losing ground to Apple, several analysts have argued that ballooning demand for smartphones means there’s more than enough room for both competitors to grow their market share.

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