Cramer can't even say it with a straight face anymore...
Earlier today, Jim Cramer of TheStreet.com came out pimping for Google's stock like there was no tomorrow. Given his utterly atrocious track record in predicting the markets, one has to wonder what exactly it would take to get fired as a CNBC commentator or stock-touting "analyst."
I can only surmise it would require a convertible headed towards Vegas at 90 mph, a gun, Tobey Maguire, plenty of amyl nitrate poppers and a half-empty bottle of bourbon. No point in mentioning the bats, though- the poor bastard will see them soon enough.
For those of you with no long-term memory, I thought today I'd dig up a link to that infamous article from February 29, 2000, where Cramer listed his personal choices for the ten stocks everyone should sink all their money into. Five years later, nearly all of those stocks have either gone bankrupt or fallen 95%.
With cheerleaders like Cramer on Google's team, who needs enemies?
GM bonds mixed amid Fiat charge- 8.2% for 20 years????
S&P affirms ratings, outlook; Moody's less optimistic
By Rachel Koning, MarketWatch
Last Update: 3:12 PM ET Feb. 14, 2005
CHICAGO (MarketWatch) - Long-term bonds issued by General Motors lost ground Monday in the wake of a changed credit rating outlook from Moody's that followed the automaker's announcement it would pay $2 billion to avoid taking on a bigger stake in Fiat.
GM's shorter-term debt, and many of the notes and bonds issued by its credit arm, General Motors Acceptance Corp. or GMAC, fared better on Monday. Moody's confirmed its "Baa2" credit rating for GM and its "Baa1" rating for GMAC, but changed the outlook for both to "negative" from "stable."
The outlook change applies to approximately $150 billion in outstanding GM and GMAC debt.
Although the Fiat charge "does not represent a significant erosion in GM's automotive liquidity position of $23 billion, this outflow comes as the company is facing increasing challenges in its competitive and operating environment," Moody's analysts said. S&P affirmed GM and GMAC at "BBB-," with stable outlooks.
The $2 billion charge frees General Motors from an option that could have forced GM to buy the 90 percent of the Italian Fiat's struggling auto division that the Detroit-based company did not already own. Fiat and GM will continue to co-own a diesel engine plant in Poland and share intellectual property.
The stock market largely embraced the deal. Shares of the world's largest automaker (GM: news, chart, profile) added 0.6 percent, or 22 cents, to $37.36 Monday afternoon, while Fiat's stock (FIA: news, chart, profile) jumped nearly 6 percent, or 44 cents, to $8.01.
Bondholders, however, gave a mixed assessment of the developments. GM's 8.375 percent note due in July 2033 ranked as the most actively traded corporate bond on Monday, as it routinely does, according to data tracked by MarketAxess. The bond was yielding 8.156 percent. At that yield, it was trading at a spread of 371 basis points, or 3.71 percent points, over a comparable-maturity, but lower-risk, Treasury bond.
The spread was wider by 5 basis points from Friday and wider by 10 basis points from where it stood a week earlier. Wider spreads mean investors demanded a higher payout for taking on what they perceive as a riskier company bond.
Ford's (F: news, chart, profile) most active long-term bond also reflected investor pessimism.
The 7.45 percent security set to mature in July 2031 was yielding 7.468 percent. That's a spread of 301 basis points, or 3.01 percentage points, over lower-risk government bonds. The spread was wider by 2 basis points from Friday and by 13 basis points on the week.
Ford shares gained 0.5 percent or 7 cents to $13.13.
Bond investors did go after shorter-term GM issues.
GM's 6.375 percent note due in May 2008 was trading at a yield of 5.83 percent, MarketAxess said. That's 233 basis points, or 2.33 percentage points, over a comparable government-issued note, which was tighter by 6 basis points from Friday.
Debt issued by GMAC, the automaker's finance arm, also improved.
GMAC's 6.75 percent note due in December 2014 was trading at a yield of 6.941 percent. The spread stood at 286 basis points, tighter by 6 basis points on the day but wider by 2 basis points compared to the relationship to its equivalent Treasury note seen one week earlier.
In further assessing the company's ratings, Moody's said it would "focus on [GM's] ability to remain on track for delivering more appropriate debt protection measures by 2007 as a result of various new product and cost cutting initiatives."
Moody's sees five steps underway at GM as key to its credit profile over the next two years, including pushing out new products more aggressively in the United States and Europe; cost savings tied to restructuring its European businesses; reducing U.S. inventory levels and maintaining a 27 percent U.S. auto market share.
Rachel Koning is a reporter for MarketWatch in Chicago.
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