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The Federal Reserve has had a large role in determining which banks and brokerage firms stayed in business. Now it may have to make a similar set of decisions about big corporations.

According to Bloomberg, "Federal Reserve Chairman Ben S. Bernanke may find the next fronts of the financial crisis to be just as chilling as last month's downfall of Wall Street titans: its spread to corporate America and state and local government."

Large companies including Caterpillar (NYSE: CAT) are having to pay huge premiums for debt or tap lines of credit. The Fed has the ability to lend cash to non-financial companies, but the dilemma raises the old question of which firms will make it and which will not. It is similar to the decisions it made with financial firms like Bear Stearns.

It is clear that there is not enough money to go around as hundreds of fairly sizable corporations cannot get loans. The Fed is unlikely to have the capital to help them all.

That means there will have to be some litmus test for who is helped like corporate revenue, number of employees, whether the company is in a strategic industry like defense, and so on.

Which would you save?

Douglas A. McIntyre is an editor at 247wallst.com.

It appears that the New York Fed is stepping in to help decide whether Citigroup (NYSE: C) or Wells Fargo (NYSE: WFC) will end up buying Wachovia (NYSE: WB). Both banks have made offers. Citigroup says its deal came first. Wells Fargo says its deal is better for shareholders and the FDIC.

According to The Wall Street Journal, "Under the leading plan being discussed Sunday night, Citigroup and Wells Fargo would divvy up Wachovia's network of 3,346 branches along geographic lines." The FDIC would give no backing for Wachovia's assets.

The intervention by the Fed looks a bit more like the government socialism that has basically put the Fed and Treasury in charge of the banking system. In Wachovia's case it may be absolutely necessary. Maybe.

Wachovia's shares had lost 90% of their value before Citigroup made its bid. Because of the toxic assets on it books, Wachovia might have failed the way Washington Mutual did. The government would be left to help pick-up the pieces.

A long legal battle between Citigroup and Wells Fargo could leave Wachovia to fail.

But would its failure be such a bad thing? The FDIC might have to put in a huge sum to protect depositors. Then it could auction off the branch system. The toxic assets might be sold to a vulture fund with some government guarantees.

A lot of people would lose jobs, but is it the Fed's job to keep them employed? No.

Douglas A. McIntyre is an editor at 247wallst.com.

Market in Asia and Europe were off nearly 5%.

The Nikkei fell 4.3% The Hang Seng was down 4.4%, and the Shanghai Composite dropped 5.2% Some financial stocks fell as much as 9%.

At the open in Europe, the FTSE was off 4.6%. The DAXX dropped 4.3%. The CAC 40 sold down 4.8%.

Data from Reuters.

Douglas A. McIntyre is an editor at 247wallst.com.

Citigroup (NYSE: C) claims it has gotten a judge to block a potential merger between Wachovia (NYSE: WB) and Wells Fargo (NYSE: WFC). The big New York bank claims it had a deal to snap up WB, and was done wrong.

According to The Wall Street Journal (subscription required), "State Supreme Court Justice Charles Ramos issued the order blocking the sale of Wachovia Corp., which Wells Fargo & Co. had agreed to purchase in a $14.8 billion deal."

The FDIC says it will step in to help resolve the issue. But, the question is "who is served" by the broader implications of the fight. Having three of the nation's largest financial firm in a dispute during the greatest banking crisis in decades would push Wachovia, already troubled, into greater peril while the fight goes on. It could continue for months when fast action may be the only way to keep Wachovia from failing.

The Treasury has already intervened by pushing banks to merge and nationalizing or taking large financial stakes in companies including AIG (NYSE: AIG). It needs to step into the Wachovia situation before the bank gets into such deep trouble that it is not worth buying.

Douglas A. McIntyre is an editor at 245wallst.com.

The car manufacturers of Europe will ask for $55 billion in loan guarantees to upgrade their factories to build more fuel-efficient cars. The proposed arrangement looks a lot like the one just put together by the U.S. government and the Big Three American automakers.

According to The Wall Street Journal (subscription required), "Fiat suggested the request to European auto executives at a board meeting of ACEA, the European Auto Makers Association on Friday."

Perhaps Japanese, Chinese, and Korean car companies can call for similar help, and the value of auto loan guarantees around the world can approach $200 billion.

While governments try to bear the burden of a worldwide financial meltdown, more and more struggling industries will ask for assistance. The airline industry may be next; it's being badly hurt by high fuel prices. Food companies may want aid because of rising commodities costs. Refiners are being hurt by high oil prices and may need a hand as well.

So, the question becomes, will governments decide which industries make it?

Douglas A. McIntyre is an editor at 247wallst.com.

Tech stocks are following financials into the toilet. Yesterday, Microsoft (NASDAQ: MSFT), the world's largest software company, said it was taking a look at hiring. That is probably code for the firm saying it plans to cut or level out expense growth.

According to Reuters, Microsoft said, "Given the current economic environment we are taking the prudent step of reviewing our hiring plans and will make some adjustments as appropriate."

There had been some hope that technology spending would be close to immune to a slowing economy. Recent earnings from Oracle (NASDAQ: ORCL) confirmed that. But, the rapid deteriorating of GDP improvement and employment are leading many analysts to think that economic conditions have gotten much worse in the last two weeks.

In just five days, shares of IBM (NASDAQ: IBM) are off over 12%. Shares in Hewlett-Packard (NYSE: HPQ) are down 8% over the same period.

Tech has been one of the rapid growing sectors in the economy over the past two years. If hiring stops for these companies, or if the industry goes into a cycle of layoffs, it could deepen the recession very quickly.

Douglas A. McIntyre is an editor at 247wallst.com.

No industry has cash flow like the tobacco industry. Making cigarettes costs very little compared to what the consumer pays. With a few plant upgrades, there is not much capital expense. Many tobacco firms have operating margins of 20%.

That made it all the more shocking that Altria Group (NYSE: MO) said it would delay buying UST Inc. (NYSE: UST) because of concerns about the credit market. Altria is considered one of the most stable large companies in the U.S. According to The Wall Street Journal (subscription required), "While attention has been focused on problems in the market for short-term loans or lending between banks, the Altria situation shows that even highly rated companies borrowing money for standard purposes such as acquisitions are having trouble getting funding."

The transaction for UST was valued at just over $10 billion, but the company had $2 billion in revenue and almost $900 million in operating income last year. The firm only has $1 billion in long-term debt.

If the Altria buyout can be scuttled by the credit crisis, any deal can be. More pending M&A transactions may be delayed or killed, even if both companies in a marriage are healthy.

Things has gotten that bad.

Douglas A. McIntyre is an editor at 247wallst.com.

Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO) agreed to delay their advertising sales partnership while the Justice Department reviews the deal. The news may look like a retreat by Google, but it undermines one of the key reasons Yahoo! gave for staying independent from Microsoft Corp. (NASDAQ: MSFT). Google was going to improve Yahoo!'s revenue.

It looks like there is some chance the partnership will not happen at all. That would justify the fact that Yahoo!'s stock is down by more than half from its 52-week high. Yahoo! indicated that the wait might be short. "The companies have agreed to a brief delay in implementing this agreement to continue our ongoing discussions with the (U.S.) Department of Justice," Yahoo! said in a statement. "We have had discussions with regulators and look forward to responding to their questions about this agreement."

The trouble is that Justice can take its own time. It's under no pressure to give an answer in short order. The news also begs the question of whether the two companies will wait for antitrust reviews in the EU and Canada.

Each day that passes without Yahoo! having a sales relationship in place with Google is a day its earnings do not recover.

Douglas A. McIntyre is an editor at 247wallst.com.

While may stocks, some of them from companies with famous brands, hit 52-week lows, Procter & Gable (NYSE: PG) cruises along. It trades close to $72, against a one-year high of $75.18 and a period low of just over $60. Even better, it has a dividend yield of nearly 2%.

The P&G share price offers one of the few positive pieces of news from the recession. Some companies sell products that do well even if the economy is in the toilet. P&G's mix of relatively inexpensive consumer goods is unlikely to be hit hard by falling household spending.

Investors are looking for "safe havens" as the market plummets. And, applying the P&G lesson to other stocks may help investors locate shares that should hold their value even if the economy gets remarkably bad. McDonald's (NYSE:MCD) is on that list. So is Colgate (NYSE:CL).

There is a lesson in it. Even people who are broke need cheap food and razors.

Douglas A. McIntyre is an editor at 247wallst.com.

The prevailing wisdom would have to be that there are too many smartphones on the market. Nokia (NYSE: NOK) just launched one to compete with RIM (NASDAQ: RIMM) and Apple (NASDAQ: AAPL). Google (NASDAQ: GOOG) is releasing the G1 later this month. Most of the other large handset companies are also in the business. But Hewlett-Packard (NYSE: HPQ) now wants to jump in.

According to The Wall Street Journal, "The new phone will likely be released in Europe within the next two months."

Given the amount of competition in the market, it is hard to see how HP will be able to pick up much market share. It is hard to imagine that it can offer features beyond those the iPhone and BlackBerry already have.

The problem with the new device may be greater than that. HP has had the image of being a "winner" over the last two years as financial results have increased. Its PCs and printers are leaders in their fields.

Investors would think that HP would want to dodge a failure in a crowded market to avoid the market looking at the company as one that makes poor product decisions and tries to expand beyond its core franchises. To make matters worse, HP will probably never sell enough phones to meaningfully add to its revenue.

Douglas A. McIntyre is an editor at 247wallst.com.

Yahoo!'s (NASDAQ: YHOO) shares hit another multi-year low, trading down to $15.54, off by more than half from its 52-week high of $34.08. That high was driven by a buyout offer from Microsoft (NASDAQ: MSFT), but Yahoo! now trades well below the level where it changed hands before Redmond came calling.

Yahoo!'s market cap is below $22 billion. By some estimates its ownership of Yahoo! Japan and Chinese e-commerce company Alibaba are worth $10 billion. That means that Yahoo!'s core business trades at only two times sales, a remarkably low figure.

Two fears have pushed Yahoo! down. The most obvious is that its share of the search market in the U.S. has fallen to about 20% and continues to drop. It may form a partnership with Google (NASDAQ: GOOG) to push up its revenue in this arena, but the deal is being challenged by antitrust authorities.

The major reason behind Yahoo!'s drop is one that would tend to push the shares down more over time. Wall Street has believed that internet display advertising, Yahoo!'s key revenue business, would continue to grow at rates of more than 20% for the next several years. Recent evidence is that many marketers do not consider online display ads to be very effective, maybe even less effective than TV. Some large internet firms have watched their growth rates drop to single digits.

Yahoo! may be up against a problem that has no easy solution.

Douglas A. McIntyre is an editor at 247wallst.com.

Not a day goes by that the market is not obsessed with the latest move or product launch at Google (NASDAQ: GOOG). Most recently, the media has been all over the company's energy initiatives and its Android smartphone launch. To a large extent, the coverage takes attention away from the fact that the recession is slowing the company's size growth. But very few people seem to spend a lot of news cycles on that.

Google is currently having an internal debate about whether it should spend money to advertise its own brand and products. It is probably a waste of money because the company is already in a number of businesses that drive up its expenses without bringing in a dime.

According to The Wall Street Journal, "The search giant has recently held discussions with several Madison Avenue agencies, including Wieden + Kennedy and the boutique firm Taxi New York, about new efforts to promote some products, according to people familiar with the matter."

The question is what does Google have worth promoting? It already owns the search business, so marketing that product would seem to be a waste of money. Its other major products for searching images, news and maps don't bring in any revenue, so advertising them would appear to be burning money.

A lot of corporate advertising is meant to make management feel good. Google does not need name recognition and it is hard to see why the search company would want to promote one of the most famous brands in the world or any of its free offerings.

But Google does have cash to spare, and that usually drives a temptation to spend it.

Douglas A. McIntyre is an editor at 247wallst.com.

The head of Nokia (NYSE: NOK) thinks the Apple (NASDAQ: AAPL) iPhone and RIM (NASDAQ: RIMM) BlackBerry are awesome products. Since his company has 40% of the world market for handsets, that may not be good news. He wants more of the high-end, high-profit part of the industry.

According to Reuters, Nokia President and CEO Olli-Pekka Kallasvuo said "We will exceed the RIM client (BlackBerry) in some months with a very good e-mail system." Coming from anyone else, that claim would be foolhardy. Coming from Nokia, it is a threat. Nokia launched it first touchscreen phone today.

Shares of Apple and RIM already trade near 52-week lows. Within the last week, both stocks hit levels that were 50% off their highs for the last year. Investors are worried that the poor economy will hurt sales for expensive phones and that the fourth quarter, a big selling season, will be weaker than it has been in several years.

If Nokia makes a very aggressive move into smartphones, Apple and RIM shares may not stage big rallies anytime in the near future. Forty percent of the global market is too big a number.

Douglas A. McIntyre is an editor at 247wallst.com.

Many of the large newspaper chain purchases over the last several years have involved tremendous borrowing and the banks are at the door with eviction notices. Even the big companies in the industry are having trouble. According to The Wall Street Journal, Gannett, Inc. (NYSE:GCI) the country's largest newspaper publisher, said Wednesday it had tapped its credit line as short-term financing markets stall.

Several other chains, particularly McClatchy (NYSE:MNI) and Gatehouse (NYSE:GHS) are having crippling debt problems.

A number of media sources reported yesterday that the The Star Tribune in Minneapolis has missed a payment on its debt.

Although it is hard to imagine, some of these companies may fail and fail soon. The costs of newsprint, trucks, gas, and personnel are so great that a number of newspapers may complete shut down. Customers may wake up one morning and find the front step empty. The poor newspaper boy has lost his job.

It is a hard time when there is nothing to put in the bird cage.

Douglas A. McIntyre is an editor at 247wallst.com.

What if the economic bailout package is not enough to free the locked-up credit markets? Big banks may sell bad assets to The Treasury Department, but will they loan that money to the man in the street or small businesses?

If the Paulson plan is not effective, the number of arrows in the federal government's quiver drops substantially.

The Fed has tried to save the economy with a number of rate cuts. Many analysts have thought the agency would not cut again before the election, but those many analysts could be wrong.

According to The Wall Street Journal, "Federal Reserve officials are weighing further interest-rate cuts, even if Congress passes a $700 billion rescue plan, in the face of a deteriorating economic outlook and severely strained financial conditions."

The Fed had better hurry along. On Wednesday, reported car sales figures were down over 30% for September for many auto companies. The major excuse for the problem was not gas prices, it was the inability of people to get car loans. There is absolutely no evidence that the housing or mortgage markets are getting better. Default rates on credit cards are rising. Retail sales this holiday season are likely to be pathetic.

The economy is at the stage when it is time to pull out all the stops. The window to save the consumer may close in the next week or so. That may mix metaphors a bit, but that makes it no less true.

Douglas A. McIntyre is an editor at 247wallst.com.