Short Sellers Making a Smart Bet Against Ford and GM

6/20 - "The short interest in Ford is now larger than that of any other company traded on the NYSE. Shares short in the company hit 317.6 million as of June 15, up 31.3 million from the end of May. At GM that number rose 14.9 million to 120.2 million."

"The fact that the car companies will keep losing money because of poor domestic sales and high fuel prices is not enough to justify a belief that their shares will go lower. The news would have to be worse than that, and it might be...If Detroit tries to use debt to fill its bank accounts, the matter may be worse. Ford and GM both have junk debt ratings. Borrowed money would come in at terribly high rates of interest.

A strong bet against Ford and GM is a good bet. They have run out of options to increase sales and improve their balance sheets."