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Tuesday, November 11, 2008

GM Stock Rated Worthless by Analyst

DETROIT — General Motors stock tanked precipitously by 30 percent on Monday on news that Deutsche Bank analysts called the stock worthless — and predicted the company could be out of cash as soon as December. GM stock is at its lowest level in six decades, hitting a new low of $3.08 on Tuesday morning.

Meanwhile, President-elect Barack Obama and outgoing President Bush talked face to face on Monday about help for the U.S. automakers. Obama's aides told the Associated Press that Obama suggested that the government "immediately help" the automakers but also said the discussion was not limited to any one auto company but focused on "the broad health of the industry." Obama has said that helping the U.S. auto industry will be a high priority in his administration.

Congressional leaders asked the Bush administration last weekend to consider an expansion of the financial industry bailout to include automakers. The president's spokeswoman, Dana Perino, was quoted by the AP as saying it's possible President Bush will consider ideas from Congress if "they decide to try to do something more" to help the auto industry between now and January 20.

Inside Line says: This drama is going to come to a dénouement pretty soon, and it looks as though the government will be an important switch puller one way or the other.