If there were still doubts about whether we’re in a recession, consider that one analyst now projects GM stock as worthless:
General Motors Corp. plummeted to its lowest level in 59 years after a Deutsche Bank AG analyst downgraded the shares, saying they may be worthless in a year.
“Even if GM succeeds in averting a bankruptcy, we believe that the company’s future path is likely to be bankruptcy-like,” Deutsche Bank’s Rod Lache wrote today in a note. The New York analyst recommended selling the shares and cut his 12-month price target to zero.
Read that again: price target to zero. General Motors. How the mighty have fallen.
The question now is whether GM can muster the political clout to put the American taxpayer on the hook for its debts. This will be one of Barack Obama’s first big tests.
I say again: Republicans will very soon be glad that John McCain lost this election, because this is a mess and I don’t see any easy way out.