Now that was a wild ride going into the close all because of S&P is thinking about maybe cutting GMs credit rating by 2009.
S&P, which rates debt of GM and Ford six steps below investment grade at B-, said in statements that both automakers have ``adequate liquidity'' for this year while facing a ``serious challenge'' during 2009. The ratings company put both on Creditwatch with a negative outlook and said it's also reviewing GMAC LLC, the finance company 49 percent-owned by GM.
Looking at GMs balance sheet you notice that they have $24 billion in cash and about $45 billion in debt but they have been reducing the amount of short term stuff out there. The problem is that GM just has to stop losing $15 billion a quarter by any means necessary.
If that means closing factories, putting workers on leave with less pay, or just making less cars then that is what they have to do. You can also really see the fear in this market when a story about how S&P *might* cut GMs debt in 2009 makes the market drop 421 points in like 30 minutes. The VIX volatility meter was at like 60+ today which is the highest ever. For some reason it just feels like a bottom to me but you never know.
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