GM Bonds are Now Junk

[orwell]

A news flash just crossed the Bloomberg screen.

S&P has just cut GM's bond to junk status.

This was widely anticipated but still will set GM's debt back as portfolio managers who can not own junk bonds must liquidate their holdings.

Maybe this is one of the reasons why Kirk Kerkorian made his offer for more shares yesterday.

On Edit: Ford was just cut to junk as well.

[dbt]

1. How poetic.

I have driven junk from both these companies.

[BR_Parkway]

2. Is this the start of Black Thursday? We've known the bubble was going to

burst, and this economy is humming along under Shrubbie's watch just like it was in 1929.

The robber-barons never count on what their greed will create.

[orwell]

6. Probably Not

This was anticipated for some time. It does mean however that some fund managers must sell GM and Ford bonds, as they can not by their charter hold junk in their portfolios.

GM's debt is in the 290 billion range. It will be the largest debt downgrade to junk in US history. The question will be whether the high yield managers can pick up the dumped bonds without the price falling significantly further.

What it really points out is the health care and pension crisis looming for corporate America.

This will generate headlines, so in that regard it can't be ignored.

[Jo March]

3. But by all means let's invest all of our retirement in the stock market!

Cut out Social Security altogether! Stocks are 100% where it's at!

:sarcasm:

[havocmom]

4. More reasons the junta pushing SS 'personal accounts'

The corporations have been living large on stock investment and the pyramid is gonna tumble down without more suckers, err, investors propping it up pronto.

When corporations went from being concerned with taking care of business to being concerned with conning investors, all was lost. Face it. Let the greedy liars fail. Americans are gonna be outta work whether we allow corporations to hold workers hostage for this, for dumping OSHA, for dumping environmental laws, for maintaining pensions. Corporations are not gonna do what they said they would. Fuck 'em. They fail on their own. They just delay it by saying "Do it for the workers" while they are doing it TO the workers.

I repeat: Fuck 'em and their little stock selling dog too!

[Tux]

5. Damn

http://quote.bloomberg.com/apps/news?pid=nifea&&sid=avU2.7petiaQ

If this keeps up, we'll have another Depression.