GM?

The collapse of the automobile bailout plan raises the prospects of bankruptcy for General Motors and Chrysler.

The Dow Jones Industrial Average tumbled 135.96 points (1.59 per cent) to 8429.13 in opening trades and the Nasdaq composite fell 14.45 points (0.96 per cent) to 1493.43.

The broad Standard & Poor's 500 dropped 13.43 points (1.54 per cent) to 860.16. ANd guess which stock is actually up, General Motors. AFter taking a beating early this morning, GM bounced back up, almost as if the market knew that a bailout (in some form) was on its way. Sahers should have taken a big hit, but they didn't, why? If GM were in Illinois I would assume corruption, but this time I think it is more global, simply put - speculation.

The White House said on Friday it would consider tapping a $US700 billion ($1.04 trillion) financial rescue fund "to prevent a collapse of troubled automakers" after lawmakers failed to pass an alternative.

On Wednesday Sen. George V. Voinovich, Ohio Republican and a leading supporter of the emergency measure, said that the bill didn't have the necessary Republican votes to pass Congress. And he was right.

If you are an average investor stay away from GM right now, it is not trading on fundamentals, its more emotion. If you are looking to short GM, stay away from it, because you just can't tell what will happen next. If you are an options trader, avoid GM like Bird Flu, it is toxic.