MoneyandMarkets.com: Classic Case of Investor Complacency

Most investors probably won’t learn that GM and Ford are going bankrupt until it’s too late to run for cover, according to Dr. Martin Weiss, editor of the Money and Markets investment newsletter.

JUPITER, FL (PRWEB) October 4, 2006 -- America’s two largest auto giants, Ford and General Motors, are on a collision course with bankruptcy. Yet most American investors don’t seem to care. Dr. Martin Weiss, author of The New York Times best-seller, The Ultimate Safe Money Guide and editor of the Money and Markets investment newsletter, believes it’s a classic case of complacency despite overwhelming evidence of darker clouds.

According to Dr. Weiss, some investors are bidding up the shares in the auto companies in spite of overwhelming evidence.

Dr. Weiss points out the facts: “Look. Ford is forecasting a pre-tax loss of nearly $6 billion in its manufacturing operations this year. And when you include its restructuring costs, the total projected loss could reach a whopping $9 billion. On top of that, don’t forget GM’s $10.5 billion loss last year and its $3.4 billion loss in the second quarter of this year. Heck, even with an overdose of Ambien, it would be tough to miss the fact that Detroit is drowning in a sea of red ink.”

Wall Street’s rating agencies may be tired and drowsy, but they also see the handwriting on the wall. Standard & Poors rates the credit of both Ford and General Motors a single B, four steps below S&P’s highest junk bond rating of BB+. Moody’s rates Ford B3, five steps down from its highest junk bond grade. And Moody’s rates General Motors Caa1, buried six steps under top-rated junk.

What’s even more troubling, according to Dr. Weiss, is that these extremely low ratings may be understating the likelihood of bankruptcy because S&P’s and Moody’s credit ratings can be biased in favor of the companies they rate!

As a result, the widespread complacency in America today is not entirely the fault of investors. Dr. Weiss cites the following as backup in his report:

1.His press release titled “SEC-Sanctioned Rating Agencies Harbor Serious Conflicts of Interest”

2.His statement to the Securities and Exchange Commission titled “Improving the Nationally Recognized Statistical Rating Organizations (NRSRO) System”

3.His presentation to the National Press Club titled “Crisis of Confidence on Wall Street”

4.His presentation to the U.S. Senate titled “The Worsening Crisis of Confidence On Wall Street”

To learn how to take advantage of this classic case of complacency to reduce your exposure, visit this link: http://www.moneyandmarkets.com/press.asp?rls_id=442&cat_id=6&;

About DR. MARTIN WEISS & MONEY AND MARKETS

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Monica Lewman-Garcia at 561-627-3300 x 11819 or visit www.moneyandmarkets.com.

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