Why are GM's notes trading as low at the stock?

[stock777]

Quote from cubical:

The reason I ask is my father is in GM. he knows little about investing and only bought it because it was "cheap" this was at 8 bucks or so. I keep telling him if he wants to play GM to get out of the common stock and get into GMS. So if you guys were to chose between GMS and GM, which would you go with?

I would go with Burn Yer Money in the 3rd at Aqueduct.

 

[dont]

Have a look at

http://seekingalpha.com/article/110...ailout-with-yields-as-high-as-45?source=yahoo

Personally when something has a 43% yield its either a ponzi scheme or you will lose your money.

seriously though. What makes you think the market is wrong in its pricing for GM?

If you can't answer that don't touch it.

 

[DeeDeeTwo]

Quote from dont:

Have a look at

http://seekingalpha.com/article/110...ailout-with-yields-as-high-as-45?source=yahoo

Personally when something has a 43% yield its either a ponzi scheme or you will lose your money.

seriously though. What makes you think the market is wrong in its pricing for GM?

If you can't answer that don't touch it.

The market is pricing both correctly...
Any bond yielding > 40% is a much better indicator of impending bankruptcy...
Than common trading as a penny stock.

Sophisticated bond market traders...
Are basically saying that in the inevitable GM reorganization...
Which will really be a US government nationalization...
Bond holders with get something like 20 cents on the dollar...
Because Obama is in the tank for the UAW...
And will never allow a liquidation.