Continuing on our theme of bankrupt US Auto manufactureres, here's a report from MarketWatch:
Deutsche Bank downgraded General Motors Corp. to sell from hold, with a price target of $0, saying the car maker may not be able to fund its U.S. operations beyond December without government intervention.
Deutsche Bank said it believes the U.S. government will be compelled to intervene through a capital infusion or loan. "Without government assistance, we believe that GM's collapse would be inevitable, and that it would precipitate systemic risk that would be difficult to overcome for automakers, suppliers, retailers, and sectors of the U.S. economy," the broker said.
Even if GM avoids bankruptcy, equity shareholders are unlikely to get anything back.
Soon after General Motors announced a huge third-quarter loss of $4.2 billion, and that it was burning through an additional $2.3 billion a month, CNBC host Larry Kudlow said automakers should not be given any more taxpayer cash.
"We should not be pouring bad money after bad money" Kudlow said on the financial news channel.
"They should have to make major, surgical, structural changes."
Kudlow's comments follow a report in The New York Times that automakers would ask Congress for double their previous request to as much as $50 billion in government-backed loans so that they can build more fuel-efficient cars.
"The taxpayers cannot possibly finance their burn rate cash problems," Kudlow said. "They need to go into bankruptcy."
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