Friday's stock market decline capped off a pretty strong week for stocks. Three weeks in a row investors were able to garner positive returns. We continue to remain cautious as the quarter comes to an end. This week the G-20 meeting could be the start of some future uncertainty if little is agreed upon during this period of financial and economic stress globally.
The firing of GM's CEO is just one painful step for the restructuring of the auto industry. Much pain is needed to deleverage General Motors and Chrysler and to significantly lower their cost structures. This is an arduous process as we have been discussing for many months. We still believe the stock is worth zero and the best solution is for the government to orchestrate a prepackaged bankruptcy for GM.
The other immediate obstacles to the market heading higher will be the grim earnings season approaching and the uncertainty of the public-private partnership. We have touched on some of these recently and believe it will be hard for the markets to move higher until there are some positive tea leaves coming from each of these important catalysts in the next month.
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