One for the road
Minyanville Mail Bag!
Minyan R Writes: Just a quick note to add to what you and Prof. Succo have been saying about GM.
The Fed announced another permanent injection, $1.25 Billion Bill Pass, less than 2 hours before the GM downgrade. A plunge protection team (PPT) would have to have known the downgrade was coming. I expect the other ratings agencies to give the market a little time to absorb this last hit before dealing the knockout blow to GM debt, but the Fed will probably be there to offer some comfort when it happens.
The two other permanent injections in late April could be seen as plunge protection as well as they followed declines in the S&P 500 and a day of weakness in treasuries.
Thanks, R! The conspiracy theories always generate a lot of sparks, no matter which side you take. The "Who us?" smirk of denial that accompanies even the most obvious of jam-jobs tend to cast every coincidence in a dark light.
The real point of my ravings on mysterious thinking at S&P in regards to downgrading Ford and GM is that it simply looks horrible on the surface of it. The game can't just be about making bets on when S&P pulls their head out of the sand to notice that GM has labor problems and the Japanese make nice cars... et al. There needs to be a catalyst such that market participants can trust the action. A cause leading to an effect.
Simply flopping the downgrade out there, citing issues a quarter century in the making, at a time of monster volatility is too improbable to be coincidence. Rejecting chance, it could only have happened due to some sort of catalyst, or cause. Not being sure that "management is on the right track" isn't sufficient, by way of explaining the cause.
You don't have to be Mel Gibson to suspect hidden influences at work.
They Shoot Horses, Don't They?
As it turns out, it's pretty tough to find out the name of the last horse to be euthanized on the track at the Kentucky Derby.
Simply posing the question got me some heat from the lovely and talented Mrs. Jeff Macke, who still gets choked up at the very mention of Ruffian.
Enjoy your Derby and Juleps, race fans! I have nothing to add on the field but, in the spirit of the day, I can tell you that I think Winky Wright is a very live underdog at +175 vs. Felix Trinidad!
You know, for those Minyans living in Nevada or New Jersey. Or the rest of the world.
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