Now that the Big O’s nixed the idea of a car czar and tasked Tim Geithner and Larry Summers to deal with the Big 3 who are asking for boatloads more money as we speak, let’s hope those economic titans understand the entire auto parts industry is about to go pfffft unless it gets bailed out, too. 

The parts suppliers requested federal aid 10 days ago. $25.5 billion was the opening bid made by the Motor & Equipment Manufacturers Association, a trade group representing 400 companies in the sector.

It’s probably just coincidence that the amount is nearly identical to the handouts already received by GM, Chrysler and their flailing finance divisions…so far.

“Without immediate assistance to suppliers, the country will face massive job losses and the eventual breakdown of the entire automotive sector in the United States,” according to an 11-page request from the Association that was obtained by the Wall Street Journal.

Last week GM and Chrysler reported breathtaking declines in domestic vehicle sales for January: GM dropped 49% and Chrysler was off 55%.

In 2008, 40 auto parts suppliers filed for bankruptcy protection. That number is likely to be surpassed this year almost no matter what.

The suppliers propose that $7 billion be used to fund a “quick pay program” allowing the beleaguered auto makers to pay suppliers 10 days after receipt of goods. That’s substantially less than the 45 days or more that has become their norm.

They also want $10.5 billion to guarantee receivables and $8 billion in federal loans.

Failure of key parts suppliers could cripple the industry faster than a rabbit on skates because the Big 3 use just-in-time supplier management systems meaning they have essentially no inventory on hand to feed the assembly line.

In Q4, 2008 the Great Economic Crisis matured into a fire-breathing dragon that stomped on everything including start-ups and the venture capitalists that fund them.

In that quarter, VC investment dropped 30% to levels not seen since Q1, 2005, according to VentureSource.

Venture capital firms invested $5.5 billion into US companies during Q4, compared with $7.9 billion the previous year. A total of 554 VC deals went down during the quarter, compared with 718 in Q4, 2007.

“Very few new deals are getting done, and a lot of people are trying to make sure their portfolios are protected,” Faysal Sohail, of San Francisco-based CMEA Ventures told the Wall Street Journal.

The dragon blasted venture capital firms 2 ways. First, these firms typically generate revenue when a portfolio company is acquired, merged or goes public, but just about none of that is happening these days.

Second, the firms need to raise cash from institutional investors for investment purposes, but those guys have fled for the hills.

The downturn affected Tech start-ups in particular. They posted their worst investment quarter since 1998. A total of $2.2 billion was invested in 266 Tech deals in Q4, down nearly 40% from that invested in Q4, 2007, according to VentureSource.

Health care start-ups also got nailed, dropping to levels not seen since 2005. For the quarter, 137 deals netted roughly $1.5 billion worth of investment in health care.

For the year 2008 as a whole, venture capitalists invested $28.8 billion in 2,550 deals, down from $31.4 billion invested in 2,823 deals in 2007, according to VentureSource.

Asian stock markets dropped faster than those in the G7 countries during 2008. Taiwan’s exports plummeted 42% during the year and South Korea’s fell by 17%. Even China’s dipped a bit.

Do we take these to be signs the Great Economic Crisis will end the Asian emerging markets boom once and for all?

Probably not, according to the Economist. In fact many Asian economies are likely to recover faster than ours.

Economists who predict long term trouble for emerging Asian economies argue that the boom was  fueled by three things—exports to American consumers, easy access to cheap capital and high commodity prices—and all 3 have collapsed. 

But claims that Asian economies rely on consumption in G7 countries are exaggerated. The Asian export surge since 2000 is almost totally explained by exports to the developing world. Exports to G7 countries has barely budged from 20% of the pan-Asian GDP since 2000.

And Asian companies are net importers of commodities, so they stand to benefit from the collapse in their prices.

Meanwhile Gerard Lyons, the senior economist at Standard Chartered, emphasizes that many emerging Asian economies do not face the structural problems confronting America’s economy.

He mentions in particular our overwhelming domestic debt, which might forestall growth for years and blunt the impact of fiscal stimulus programs like the one the Big O is about to unveil.

This is especially true of China. Many expect that nation’s GDP will drop to 7% in 2009, down from 12% in 2007 and its lowest growth in 20 years.

Thousands of factories have already closed in China, and the government rolled-out a major fiscal stimulus package just last month.

But China has debts amounting to only 18% of GDP, so its government can throw several more stimulus packages together if necessary. And these programs would help build domestic demand, thereby sheltering its economy once and for all from our capricious ways.

Omaha resident Pam Ford has participated in several clinical trials in the last 2 years. She likes participating in efforts to get low cost generic drugs on the market and doesn’t mind the free health care she gets along the way.

But these aren’t her primary motivations. “It’s absolutely to make extra money,” she told the Boston Globe, and if that’s the case, she’s not alone.

The US economy shed 2.5 million jobs last year, the most since 1945. No region or sector was spared and the unemployment rate stands at 7.2%.

Meanwhile Ford has pocketed $10,000 for her efforts, a nice supplement to what she makes from her cleaning business.

During the Great Economic Crisis of ’08-’09, record numbers of people are applying for positions in clinical research trials that pay participants up to several thousand dollars in return for a commitment of between a few and several weekends to various clinical protocols.

At Omaha-based Qualia Clinical Services for example, the participant database has risen from 9,000 to 16,000 in the last year. Qualia handles Phase 1 testing of generic drugs on healthy volunteers.

And the pool has grown more diverse than the usual college crowd, according to Steve Peck, director of operations. The trend is large enough to possibly convince some clinical research organizations to cease outsourcing early phase trials to developing nations like India.

The weakening economy has probably also helped increase plasma donation rates by 50% in the last 2 years, according to Josh Penrod, VP of the Plasma Protein Therapeutics Association.

Penrod added that payment is essential to assuring an adequate supply of blood products. Plasma collection centers develop their own payment rules, although overall compensation and time commitment remains a small fraction of that associated with clinical trials.

Call it sad, ironic, paradoxical or whatever you want, but it’s true—there’s a link between hunger and obesity.

According to the Partnership for America’s Economic Success for example, toddlers living with families that have gone hungry are more than 3 times as likely to be obese.

And anti-hunger activists have long known that poor people purchase more fast food and calorie-leaden snacks because they are cheaper and easier to access than, say fruits and vegetables.

Right now an all-time record 31.5 million Americans record receive food stamps, and a third of our children are overweight or obese. Many expect these problems to worsen as the Great Economic Crisis unfolds.

But some public health advocates think the Crisis may have created an opportunity to link food assistance to proper nutrition once and for all.

Or as Kenneth Hecht, executive director of California Food Policy Advocates told the Washington Post. “What we wanted to do (in the past) was get more calories to people. Now we find it isn’t more calories. It’s more of the right calories.”

His non-profit lobbied California legislators to create incentives for food stamp recipients to purchase nutritious food. They did and the Terminator signed the bill, but the program languished due to poor funding.

But other NPOs have interesting experiments underway. The Wholesome Wave Foundation recently began a program for example that doubles the value of food stamps when used to buy fruit and vegetables.

“We’re not taking away your benefits because you spend them on Twinkies,” Michel Nischan, Wholesome Wave’s president told the Washington Post. “But if you decide you want to spend it on fresh tomatoes, you’ll get double your money.”

76% of people approve of the Big O’s performance since election night, including nearly 6 in 10 Republicans, according to a Washington Post-ABC News poll of 1,000 adults conducted between December 11 and 14.

And while most people say he needs to bear down on the economy right away, many want him to expand his policy focus quickly.

A shade less than half of the survey respondents believe the Big O can do a “great deal” or “good amount” to fix the economy, and 55% percent think he’s done well so far on this matter.

A higher number, 65% favor a stimulus package of the sort recently floated by the president-elect’s transition team.

A majority of respondents support major health system reform, and 65% of Democrats and 52% of Independents want immediate action on the matter.

But 44% of Republicans say they don’t favor major health system reform and an equal amount could swallow something big but don’t think it’s something he needs to focus on immediately.

A majority of respondents from both parties think the federal government should expand health coverage for children by extending the State Children’s Health Insurance Program, which at the moment has a March sunset provision.

The stem cell issue remains contentious with most Republicans opposing new federal funding and most Democrats saying the Big O should authorize exactly that right away.

Democrats and Republicans also disagree in predictable ways on the Big O’s pledge to pull troops out of Iraq in 16 months.

There was strong bipartisan support for increased use of renewable energy and a nationwide moratorium on home foreclosures. Most people want the Big O to address these issues right away.

The Great Economic Crisis of 2008 has blown the doors off every sector of the economy and the government has selectively bailed out insurers, bankers and auto makers, so no one can blame industry leaders in other sectors from giving it the old college try.

Take BioTech for example. The sector has been soundly thrashed, especially the little guys.  In fact BIO, a trade group reports that 33% of the 370 publicly traded US BioTech companies have less than 6 months’ cash on hand—twice as many as last year.

Whew, so last week BioTech executives had their day with Congress.

They proposed a deal: if you give us cash now, we won’t take our tax credits when we become profitable (when and if, they should say). And there’d be a cap, say $30 million, on the cash a single firm receives.

Ahem. How in the heck is Congress going to assess all that risk, or are are these people also proposing a built-in BioTech Czar?

Actually, it may be a good deal, but Congress has to weigh it against proposals from other sectors. And for all the bluster, BioTech is small. Only 200,000 people are at risk.

In its defense, CombinatoRx chief exec Alexis Borisy told the New York Times BioTech is “one of the few places where the US is the undisputed leader of the world.”

The plan has at least one ally in Rep. Allyson Schwartz (D-Penna.) who wants to include the proposal in the Big O’s stimulus package. “Innovation and technology are growth areas for American businesses and American workers and should be part of this package,” she told the Times.

Schwartz’ district is home to several BioTech and Big Pharma offices.

It was nice while it lasted, but the days when Web-based start-ups could focus on building traffic and cash in later on ad-based revenue models are going, going, gone.

Online display-ad spending will likely plummet in 2009, and probably stay low through at least part of 2010, and the line-up of affected companies looks like an Internet murderer’s row: Twitter, Facebook, AOL, CNET and Yahoo among others, according to Silicon Alley Insider.

In the Great Economic Crisis of 2008, Web companies need a balanced revenue model according to Roger Lee, a general partner from Battery Ventures.

Lee told the New York Times that most start-ups in his portfolio offer premium services, subscription products or e-commerce elements in addition to free services.

Pizaazz has covered several companies like this including comScore, LinkedIn, and Yammer.

Angie’s List does this as well. It provides reviews and ratings of local businesses for a monthly fee, as well as earning income from ads. World Golf Tour is yet another. The site lets people play famous golf courses for free on their computers, but charges tournament fees and has a virtual store that sells duds for avatars and tips from pros.

Or, as David Weiden said, “If a company approaches investors with a plan to lose money for three or four years while building an audience, it will encounter many closed doors.”

The partner at Khosla Ventures told the Times, “It’s gone from plausible to almost implausible.”

“What’s changed more than the ability to make money from ads is the ability to raise money at the same valuation it had six months ago (using an ad-based revenue model),” he added.

Facebook has decided it will not allow employees to sell shares in the privately held company after all. At least not now.

“After carefully considering the current environment, we’ve decided to establish an open-ended timetable for an employee stock sale program,” company officials told the Wall Street Journal.

Facebook CEO Mark Zuckerberg had announced the unusual plan in August. It would have permitted employees to sell $900,000 worth of their vested shares at a $4 billion valuation according to the Journal.

The program had been trumpeted as a revolutionary way for a company to reward employees without sacrificing its exit strategy.

But Facebook encountered unexpected trouble lining up investors to fund the plan at the $4 billion valuation.

In 2007, Microsoft acquired 1.6% of Facebook for $240 million, thus valuing the company at $15 billion but that deal was for preferred stock and included an ad sharing arrangement. Now many are questioning Facebook’s revenue model and the Great Economic Crisis of 2008 hasn’t helped, either.

Which left it up to Zook to submit this Debbie-downer of an email, “I’m writing this note to let you know some bad news. Despite a lot of work, we have not been able to finalize a plan for the employee stock sale we announced in August.”

That had to hurt, since the company has stated recently that it does not plan an IPO anytime soon.  Of course, Facebook’s 800 employees are still drawing paychecks, and these days that’s not half bad.

During the Great Economic Crisis of 2008, fewer patients are seeking hospital care and more need help paying for it. Meanwhile hospitals are finding it more difficult to borrow money for facility and technology updates, according to a survey by the American Hospital Association.

More than 30% of 736 hospitals in the survey report a moderate to significant decline in patients seeking elective procedures. 40% have seen a drop in admissions. Uncompensated care rose 8% in the summer of 2008 versus a year earlier.

Meanwhile hospitals, like many institutions rely on investment income to make ends meet but precipitous stock market declines have turned those gains into losses.

Overall, Q3 margins for hospitals in the survey fell to -1.6% in 2008 vs. 6.1% in Q3 the previous year.

As a result 60% of the hospitals plan to or are considering administrative cost reductions. Similarly, 53% might reduce staff, and 27% might reduce services.

Capital projects will also take a hit, as the credit crunch has increased borrowing costs by 15% year-over-year. As a consequence, 56% of survey respondents are considering or will delay renovations and plans to increase capacity, 45% will delay purchasing clinical technology or equipment, and 39% will delay purchasing new information technology.

The situation is not expected to improve any time soon. Medicaid rosters are likely to skyrocket as the Crisis unfolds. Few hospitals break even on this population even now, and things would get worse if state budget woes trigger further Medicaid cuts.

“Hospitals are a critical part of our nation’s economy as the second largest private sector source of jobs,” noted AHA President Rich Umbdenstock. “In addition, every dollar spent by a hospital supports more than $2 of additional business activity in a community. The economic crisis is taking its toll on patients, communities and hospitals alike.”