Fifteen Notes on the Current Market Stress

7/16 - "Going back to one of my themes, be wary of companies that sell their best assets to bail out their worst assets. Tonight’s poster child is GM. How to get cash? Borrow against the remainder of GMAC, foreign subsidiaries (most promising part of the corporation), etc. Not a promising strategy. As I have said many times before GM common is an eventual zero. Same for Ford."

"One to think about: if US Bancorp is having a bad time of it, shouldn’t most large banks be having a worse time of it? I spent a little time this evening reviewing the prices of junior debt securities of marginally investment grade banks (and a few mutual insurers, also). The pressure on marginal financial institutions bearing credit risk is huge."

"Speaking of junior debt securities, Moody’s gave the GSEs, and the US Government a shot across the bow when it downgraded the preferre...