Watching the auto bailout hearings the past couple of days has been riveting. I believe business history will record this episode as a low point for both capitalism and unions. Business schools will teach the story for decades to come about the classic demise of a mature business devastated by abuse and failed leadership. Everyone from management to unions were resting on past success and their entitlements so hard, they forgot to protect and nurture their franchise.

But as Rick Wagoner stands there with his well-manicured-hands out to the American taxpayers I would love someone to ask him one question from me:

"Ricko, why in 2005 did GM systematically collect and crush its fleet of EV-1 electric cars?

It was among the fastest, most efficient production cars ever built. It ran on electricity, produced no emissions and catapulted American technology to the forefront of the automotive industry. The lucky few who drove it never wanted to give it up. What the hell were you thinking?"

(If you haven't seen the documentary "Who killed the Electric Car?" yet watch it now and be amazed.)

I am very torn on what the government should do now. My intuition is that they should not bail these top heavy, sub-standard companies out. I think any money given to the big 3 will ultimately be money (they don't have) thrown down the drain. For sure, the executives should be summarily fired for the failed leadership they have offered to this cause. My hesitation though is about the 700b they have promised to the banking sector. The banking sector has also been hopelessly flawed and scandalously led for many years. These failures are at the very root of our present global angst. Why should they be saved while the bluer collar auto workers get the punt?

In the end, as painful as it is, I think that the auto makers do need to go down. If there are other American car companies to come they will have to rise out of the ashes by starting with new energy, innovation and lean work ethic.

The government should spend money helping the auto workers to re-learn and re-train to a new, productive and sustainable career. It will be hard for many, but in the end this change has been a long time coming and in many ways stubbornly earned.

Meanwhile the TSX broke through 8,000 today. Over the past many months we have watched as the TSX declined but always a few thousand points above the DOW. I suspected the Canadian market would ultimately catch up and overtake the DOW to the downside. Today it met the Dow as they both broke through 8000.

Other world markets have now already achieved their 2002 low. The TSX today at 7745 still has a couple of thousand points to go before it will re-test the 5678 level of the last cyclical Bear. Time will tell, but I see no reason why the Canadian market would break ranks and not achieve this down side re-test.

Hopefully the indices will hold at the ’02 lows. If this secular bear is like 1966 to 1982, they will not. They will break to a fresh low this cycle below 5678 on the TSX and 7400 on the Dow.

At 750 this afternoon, the S&P today broke through its 2002 low of 776. I am afraid it is leading the way for Canada. And where it will stop, we cannot yet know.