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The recession, which officially began a year ago, is accelerating the pace of job loss. Since I began to notice the collapse of subprime back in the fall of 2006, watching the economy implode has been like a huge highway pileup in slow motion. And that crash is starting to create big economic injuries in the job market.

How so? Firing announcements rose 148% in November 2008 to 181,671 -- the most since January 2002 -- from 73,140 in November 2007. So far in 2008, the number of cuts has spiked 46% to 1,057,645, surpassing 1 million for the first time since 2005. And many of these cuts have come from financial services (91,356), computer and electronics (15,350), and retailing (11,073).

Having lived through two credit contractions, I could see this coming from miles away. But it happened far more slowly than I thought it would. And I did not foresee how the bad mortgages would cause a global financial crisis. But they have and here's how: $1.3 trillion in subprime mortgages were added to packages of complex securities, including $13 trillion of mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs).

Harvard reports that the value of its endowment has declined $8 billion between the end of June 2008 through October 2008. That would make Harvard's endowment worth 22% less than at the end of June, or $26.9 billion -- but it probably has further to fall thanks to illiquid assets like private equity interests. Meanwhile, Harvard and its peers could be in trouble because fewer people will be able to afford college given the market crash. That will mean college administrators are facing some tough choices.

Harvard is responding to the decline in its endowment by taking a "hard look" at staffing levels and compensation. It is forecasting a 30% drop for its endowment ending in June 2009, which would bring it to $25.8 billion, down another $1 billion. While this strikes me as optimistic, it does suggest the extent of the damage and the challenges Harvard and its peers face.

The options for universities are dwindling. A study suggests that tuition has risen 439% since 1982 while median family incomes have increased only 137% during that period. If tuition continues to rise at that rate, few families will be able to afford college. With the student loan market in dire straits and incomes likely to fall further due to layoffs, the only way for colleges to attract top students who can't pay will be to cut tuition even more on the lower income families while making up the difference by raising tuition for the wealthiest ones.

If executives from General Motors Corp. (NYSE: GM), Ford (NYSE: F) and Chrysler can make it from Detroit to Washington in their hybrid vehicles by tomorrow, they'll plead for $34 billion -- up $9 billion from two weeks ago. You should not give them what they want. Instead, I recommend you let GM and Chrysler merge -- if you can convince Nissan CEO, Carlos Ghosn, to run the combined company. Ford will be fine on its own -- you should grant it the line of credit it requests.

A few weeks ago, I proposed a six step restructuring plan that would save $16 billion and help a combined GM and Chrysler to survive. To put that plan into effect, there is no question that the managers of GM and Chrysler must be replaced by an auto executive with a track record for turning around an ailing competitor. That's what Ghosn did when he took over Nissan after it merged with Renault in 1999, where he was a VP. Ghosn won many small victories against an entrenched Nissan bureaucracy to revive the Japanese automaker. Ghosn is just what GM/Chrysler needs.

Make no mistake, this is not an industry to which it makes economic sense to lend money. Bankers need to get repaid from the cash flow that a business generates either from operations or by selling assets. With sales plunging -- GM's fell 41.3%, Ford's tumbled 30.5%, and Chrysler's crashed 47.1% -- there is no operating profit likely here. And demand for purchasing their assets -- such as GM's Saab or Ford's Volvo -- appears to be weak.

Hedge funds have had a lousy year, losing an average of 10.8%. But two hedge funds -- big winners in 2007 -- kept making money this year as well. Meanwhile, those two winners mask an awful lot of losers who will probably find their way into oblivion.

The winners for 2008 (at least through September) are run by James Simons (a math genius whose money-making techniques elude explanation) and John Paulson (who made so much money last year shorting subprime). Here are the details:

• Medallion Fund, run by Simons' Renaissance Technologies LLC, has $8 billion in assets and gained more than 58% -- or $1.43 billion in profits; and
• Advantage Plus fund, Paulson's $13 billion investor in takeovers, restructurings and other corporate events, returned 24.6% through September.

Meanwhile, investors are scrambling for the exit for the typical hedge fund, withdrawing $87.5 billion. Total industry assets fell 11% from the peak of $1.93 trillion in the second quarter of 2008 to $1.72 trillion at the end of the third. Hedge fund closures by the middle of 2008 were 15% ahead of 2007. And that may be only the beginning for the world's 10,000 funds.

Isn't capitalism great?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Remember how admired General Electric (NYSE: GE) used to be? After its stock has tumbled 71% from its all-time high in 2000 of $58.13, I don't think people admire it much anymore. You may have missed that GE got $139 billion in loan guarantees from the FDIC a few weeks ago but nobody blinked an eyelash. Meanwhile today, GE is reporting more disappointing earnings news.

GE is shrinking its GE Capital unit, which in 2007 accounted for about 50% of its profit and sales. Next year GE plans to earn $9 billion from GE Capital, excluding a potential charge of $1 billion to $1.4 billion to speed up cost cuts there. Meanwhile, GE Capital will have lots of bad loans -- its provision is expected to rise from $7.2 billion in 2008 to $9 billion in 2009.

As a result, GE cut its overall earnings forecast for the fourth quarter from between 50 cents to 65 cents a share down to a range of 50 cents to 52 cents -- which is in line with the 51-cents average of 14 analysts' estimates. These days it is very hard to admire almost any company, and stock prices are reflecting that lack of admiration.

Have central banks reached the limit of what they can do to fix the global economic crisis? The answer is yes, if you believe that the price of Credit Default Swaps (CDSs) is any indication. With CDS premiums for corporate bonds reaching a new high, investors in the thinly traded, unregulated and poorly-disclosed corner of our financial markets are signaling that central banks cannot fix what ails the global financial markets. That scares me.

How are these CDS premiums measured? By a couple of complex CDS indices in the U.S. and Europe. For example, there's the Markit iTraxx Crossover Index of 50 high-risk, high-yield credit ratings corporate bond issuers whose premium climbed 18 basis points (100 basis points is 1%) to 956 this morning. in London. And there's the Markit iTraxx Europe index of 125 investment-grade corporate bond issuers which climbed 3.5 basis points to 191.5 having earlier traded at a record 198. Similar indices in Australia and Japan are at record levels as well.

Central banks around the world have cut their short-term lending rates to near zero and yet things keep deteriorating. As I posted, the next step for central banks could be trying to lower the rates of longer-dated, e.g., two year, government securities. But none of these efforts will work because banks are so afraid to lend since it is so hard to find businesses and individuals who are safe bets to pay back the money. So absent global infrastructure programs by governments around the world, this crisis could continue to explode.

General Motors Corp. (NYSE: GM) and Ford (NYSE: F) are going in front of Congress today to ask for $25 billion worth of taxpayer money. (It seems they won't be flying in separate private jets.) GM will announce a reopening of its UAW contract and the winding down of its Hummer, Pontiac, Saab and Saturn brands. Ford will try to sell Volvo to the Swedish government. What's lacking from both plans at this stage is enough detail about cost savings to know whether taxpayers will get their money back.

As I posted, there is a $16 billion (in cost savings) six point restructuring plan which GM could have used, but it chose a different path. The six-point plan involved closing or selling the four brands and their related dealerships. GM's plan proposes to slowly wind down these brands and keep the dealers. It has been trying to sell Saab but no takers have emerged.

Moreover, GM workers remain higher paid than workers of its Japanese competitors. For example, UAW workers make an average of $76 an hour, including the cost of retiree benefits. Toyota Motor Co. (NYSE: TM) workers cost, all in, about $18 an hour less. It is unclear how much GM plans to cut from UAW pay by reopening the contract. Absent more details, today's GM restructuring plan does not provide a clear path to profitability.

Boeing Co. (NYSE: BA) and its engineering union have come to terms on a contract. This is good news for Boeing and its workers. Boeing can continue designing aircraft and its engineers can enjoy a raise. Considering the economic climate in which this contract was negotiated, it is a testimony to Boeing's financial prospects that it was able to increase their pay. With a $276 billion backlog, Boeing could be among the healthiest companies around.

What are the terms of the deal? Boeing employs 20,500 Society of Professional Engineering Employees in Aerospace (SPEEA) workers who are well paid already: 13,900 Boeing engineers average $88,000 annually and 6,600 technical workers make $67,000. The new contract offers 5% annual raises, higher pension payments and overtime rates, and gives workers more input concerning outsourcing decisions. But SPEEA members will pay $200 a year more for improved health care.

While this contract settlement is good news, it is less critical to Boeing's operations than the 52-day strike it settled last month with Boeing's machinists that cost $10 million a day. That's because the machinists were building aircraft before they went on strike, whereas the engineers are largely designing future ones. Nevertheless, both SPEEA and the machinists agreed to four year contracts -- a year longer than usual. This means that Boeing can now get back to work satisfying the prodigious demand for its products.

George W. Bush is beginning to realize he made some mighty big mistakes. He admitted today that he's sorry the stock market and economy have collapsed because it happened under his watch. And he thinks that there was an intelligence failure when it comes to those Iraqi WMDs.

He'd like us to believe that he was just a passive victim of all this bad stuff that happened around him. If he is really that clueless, I need help understanding how he got "elected" twice. In any case, there's plenty of evidence that Douglas Feith created the WMD evidence to please Dick Cheney.

And Bush repeatedly ignored warnings that subprime mortgages were being abused and that securitization was creating a huge risk for the economy. He also failed to apologize for two other memorable events during his presidency -- his August 2001 decision to ignore that President's Daily Brief called "Osama bin Laden determined to strike in U.S." and his famed New Orleans Katrina flyover, capped by his heck of a job Brownie comment.

Bush has left the U.S. in a sorry state -- and I'm sorry, but sorry won't cut it.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Johnson & Johnson (NYSE: JNJ) offered to acquire breast implant maker Mentor Corp (NYSE: MNT). At $31 per share, J&J's tender offer for Mentor is a 92% premium to its closing price last Friday.

J&J plans to run the $373 million Mentor as a stand-alone business under its Ethicon division, reasoning that the skills of its 1,300 employees will strengthen J&J's presence in aesthetic and reconstructive medicine. Mentor is not just about breast implants -- mostly for cancer patient reconstruction. It is also awaiting FDA approval for face fillers, which would enable Mentor (and now J&J) to compete in the market for wrinkle treatment that Botox now dominates.

The Mentor announcement comes on the heels of a $438 million J&J deal to buy Omrix Biopharmaceuticals Inc. (NASDAQ: OMRI) giving J&J full access to products that control bleeding during surgery. The Mentor purchase is expected to cut J&J's 2009 earnings by 3 to 5 cents a share.

Mentor's stock popped 90% in response to the $1.12 billion takeover deal. This is pretty good for a day when the Dow is plunging over 300.

J&J's decision to make acquisitions in a down market looks pretty shrewd to me as long as these acquisitions eventually add to earnings.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

It looks like we may have talked ourselves into an overly gloomy outlook for this year's holiday sales. Maybe that was the plan all along -- to depress expectations so much that it would be much easier to exceed them. And it looks like that's what happened -- analysts expected sales to rise 1% in the November/December 2008 shopping season -- and actual Black Friday results were up 3%.

Granted that's not an apples to apples comparison but the International Council of Shopping Centers predicted a 1% rise in same store sales this November/December shopping season and it has already revised its forecast upwards to 2%. For Black Friday, the 3% sales increase amounted to $10.6 billion in sales.

And there were some significant differences across different regions. The South gained the most, 3.4%, over 2007 while in the Northeast sales rose the least, 2.6%.

Nevertheless, other analysts remain gloomy. ShopperTrak has estimated that 9.9% fewer shoppers will descend on stores this November/December shopping season, producing a sales gain of 0.1%. And Gallup suggests that the average individual will spend 29% less, or $616, compared to 2007.

I have always disliked the moniker 'Black Friday.' Explaining that 'Black Friday' refers to the day that retailers go from losing money to making it strikes me as awkward -- particularly when my first instinct on hearing that phrase is to think of something very bad happening on a Friday.

Which is why today's deadly events combining shopping for the holidays and death seem so strange and sad. This morning, a Wal-Mart Stores (NYSE: WMT) clerk at a store in Valley Stream, Long Island was trampled to death by a crowd of 2,000 people eager to grab bargains. "The impatient crowd knocked the man to the ground as he opened the doors, leaving a metal portion of the frame crumpled like an accordion," according to AP. If store cameras can identify who trampled the store clerk, criminal charges could be brought against them.

Later in the day, two people were shot dead at a Toys 'R' Us in Southern California. The Riverside Country sheriff's department reported an argument between two teenagers preceded the shooting. A third person, a male, apparently pulled out a gun, according to AP.

General Motors Corp. (NYSE: GM) just doesn't get it. After flying in a corporate jet to Washington last week with tin cup in hand, its executives have not wised up. Rather than flying on public airlines like the rest of us do, they want to keep flying those corporate jets. But they want to make sure nobody in the public can track their flights.

If this is not the height of arrogance I don't know what is. Bloomberg News interviewed a GM spokesman who said, "We availed ourselves of the option as others do to have the aircraft removed" from a Federal Aviation Administration tracking service. But he declined to discuss why GM made the request.

GM doesn't need to explain why it made the request. I already know -- it wants its executives to be able to keep flying on corporate jets and it doesn't want Congress or the public to know about it. I think GM executives should consider three options: flying coach, getting the boot from the executive suite, or continuing to fly in their corporate jets until they run out of money.

If they pick the third option, they should not get a penny's worth of taxpayer money.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in GM securities.

General Motors Corp. (NYSE: GM) will need to assemble a compelling restructuring plan if it hopes to get the $12 billion it seeks from the U.S. Last week I proposed a six step plan -- part of which suggested GM should get rid of unprofitable lines such as the Saturn, Saab and Pontiac brands and dump their related dealerships. And it looks like GM is now considering just such steps.

But the sales declines and inefficiency of their related dealerships provide a startling look at just how poorly managed GM really is. Let's consider lost sales first -- Pontiac's fell 21% in 2008, compared with a 15% industry-wide decline through October; Saturn's sales tumbled 19%; and Saab's sales plunged 31% through October, according to Bloomberg News.

Along with these plunging sales figures, GM hosts some remarkably inefficient dealerships. Toyota Motor Corp.'s (NYSE: TM) dealers are as much as 10 times more productive than GM's. For example, Toyota, which includes the Scion brand, sold 1,071 cars at U.S. dealerships in 2007 compared with 274 at Saturn, 118 at Pontiac and 115 at Saab.

You might think that since consumer prices have tumbled by near record percentages that this might lead to lower food prices. But much of that consumer price decline is attributable to lower energy prices -- after all oil peaked at $147 a barrel in July only to fall 63.5% to $53.63 yesterday.

Why won't food prices follow oil down? Many food producers panicked as corn and wheat prices peaked this summer -- locking in long term supply contracts at top prices. For instance, corn, which usually trades at $2 or $3 a bushel, pealed at $8 a bushel in June.

Although prices have since dropped to $3.50 a bushel, some food manufacturers locked in prices for corn and other commodities in the spring and summer, fearing that prices could go even higher. The result is that producers will pass on those higher costs in the form of food prices going up 7% to 9% in 2009.