Wednesday, March 16, 2005
(This is the chart I tried to get in yesterday, but I couldn't make it work.)
I'm told that GM sales in the Northwest were down 60% the last three months. I also understand that GM, Fannie Mae, AIG, and JP Morgan have trillions of derivatives, many think this is just an accident waiting to happen.
GM is currently rated BBB- at S&P, the last investment grade rating, and Baa2 at Moody's, two notches above junk. There is speculation that GM's credit rating will be downgraded to junk following this morning's reduction in guidance.GM has more than $100 Billion of debt outstanding. Sellers of bonds could swamp the bond market if they were forced to sell because of a downgrade. "What's good for GM, is good for the country!" So goes an old saying, for you newbies.
Hey Larry Kudlow, just saw a chart that shows the Gold/CRB ratio going back to 1993. Looks like the 1.60 times the CRB is about the pivot point, mostly it trades at 1.6, some times it swings down to 1.20 sometime over 1.80. Right now the CRB is at 322; 1.6 times the CRB equals a price of gold at $515. I'm guessing that one of your alarms is going off soon!