God save the autos

There were serious rumours in the market that GM is headed for bankruptcy tomorrow. The CDS shot up to 710 range may be higher towards the end of the day. DPH was in the 900 range and trading as if it is going to file in the near term. Ford is hovering around 550/600 range. Despite this the asset-backed market continues to price deals at pretty attrctive levels. DCX priced a 2.97 average life deal at 6 over 1ML. Life as an auto banker has been rather interesting lately, with everyone trying to figure out what happens if GM goes to junk about 3 weeks ago to what happens if GM were to file in the next 6 months. People are making a killing in the CDS market. This feels like the old dotcom era when even a monkey could pick a winner. The same is happening in the auto CDS market. People buy GM, DPH, ARM, and F CDS today and three days later their positions are significantly in the money. I have heard so many boastful know-it-all portfolio traders talk about their trades. I used to laugh earlier but I have now stopped laughing at their stupidity. The sector is not going anywhere! Not with $20 billion plus in cash on the OEMs' balance sheets. Must keep writing my memoirs so I can look at them 6 months down the road and laugh.