Moody's Downgrades GM Even Deeper Into Junk
Not far to go now. MarketWatch reports that “General Motors Corp.’s creditworthiness came under fire yet again on Monday, with Moody’s Investors Service slashing its debt even deeper into junk territory at Caa2, three rungs above the lowest possible rating.” Ready for some carefully-couched euphemistic double talk? You know you want it. “Moody’s cited its expectation that the erosion in the U.S. auto sector that ‘will severely outpace’ GM’s ability to respond adequately.” More directly, analyst Bruce Clark reckons the downgrade reflects “the risk that despite all of GM’s business restructuring and liquidity raising efforts to date, the magnitude of cash outflows due to ongoing operating losses, debt repayments, and other uses will consume the company’s available cash during 2009.”
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Interestingly, just about everybody in the investment world has downgraded the opinions of Moody's, Fitch, S&P, etc already. Bang up job they did leading to the credit meltdown. I dont think the recent downgrade has the effect it used to.
Would it be easier to prop up GM and Ford as car companies or fund their reduced pensions ? I think that will determine the gov't's course of action.
Rational and reason never aided government course of action. Otherwise those people could find jobs in private industry and earn more money.
Junk. Finally experts are agreeing with what I've been saying about GM for years. Oh wait, we're talking about credit worthiness? Nevermind.