“Crony capitalism” is a term often applied to foreign nations where government interference circumvents market forces. The practice is widely associated with tin-pot dictators and second-rate economies. In such a system, support for the ruling regime is the best and only path to economic success. Who you know supersedes what you know, and favoritism trumps the rule of law.

The American auto industry, GM and Chrysler in particular, have been tumbling since the last real financial collapse in this country in the 1970’s. They were in trouble then for the same reason they are in trouble now; bad business decisions, bad taste and an inferior product.

The next chapter in the history of General Motors Corp. (NYSE: GM) is likely to be about bankruptcy. And that would leave the U.S. and Canadian governments as company’s majority owners.

Consumer Confidence Leaps; Hong Kong Injects More Stimulus; Virgin Atlantic Sees Cloudy Skies; South Africa Enters Recession; Experts: Supreme Court Nominee Neutral on Business; Hedge Funds Bet Big on Commodities; GM Gets Labor Concessions in Canada; Russian Firm Takes $200 Million Stake in Facebook

Agricultural Bank of China Raises $7.3 Billion; Banks Applying to Repay TARP; Fiat CEO Confident About Opel Bid; World Bank Prez Sees Year-End Recovery; Derivatives Shrink to $592 Trillion; GE Reaches Debt Funding Goals for 2009; UAW & GM Still at Odds on Labor Agreement; Home Depot Beats Street

Fiat SpA (OTC: FIATY) Chief Executive Officer Sergio Marchionne said his company would walk away from merger talks with Chrysler LLC unless American and Canadian unions agree to take substantial pay cuts, The Toronto Globe and Mail reported.

When Congress sent General Motors (NYSE:GM) its first “bailout” check worth $4 billion earlier this month, few folks thought it would do the company much good. But even fewer thought the company would be crying for help so quickly.

The manic-depressive trading activity continues to cause nauseating headaches for the investors brave enough to own shares of the nation’s automakers. On Friday they celebrated victory in Washington. Today, it looks like the smiles will be short-lived.

Currencies trade in a tight range…  Another new plan to help homeowners…  RBNZ and Riksbank slash interest rates! The Governorator speaks!… And Now… Today’s Pfennig!

Perhaps I am being too optimistic, but I think the government bailout of the Detroit 3 is a foregone conclusion. In the interest of the entire country and the national economy, the government simply can’t let the automakers fail. There is no denying the business model is broken, but hopefully steps will be taken to change that.