Martin Weiss on stock market speculator complacency:

Look. Ford is forecasting a pre-tax loss of nearly $6 billion in its manufacturing operations this year. And when you include its restructuring costs, the total projected loss could reach a whopping $9 billion.On top of that, don’t forget GM’s $10.5 billion loss last year and its $3.4 billion loss in the second quarter of this year. Heck, even with an overdose of Ambien, it would be tough to miss the fact that Detroit is drowning in a sea of red ink.

Standard & Poors rates the credit of both Ford and General Motors a single B, four steps below S&P’s highest junk bond rating of BB+. Moody’s rates Ford B3, five steps down from its highest junk bond grade. And Moody’s rates General Motors Caa1, buried six steps under top-rated junk. According to Moody’s, that means General Motors offers “very poor financial security” with “present elements of danger with regard to financial capacity.”Plus, even these extremely low ratings may be understating the likelihood of bankruptcy because ...

S&P’s and Moody’s Credit Ratings Can Be Biased in Favor of the Companies They Rate!

Please note that I have taken the liberty of properly formatting his quote for purposes of space; he writes in these bizarre one-sentence paragraphs, which I find to be flawed. But his analysis is superb. He notes GM, Ford, and Chrysler stock prices, from peak to trough, have garnered "investors" a whopping $170 billion loss. Though I disagree that GM's stock is currently being bid up; rather, it is being manipulated upward. He also notes the non-objective purposes of ratings companies, the ridiculous concept of "buy" or "hold" ratings for failed companies; and the inadequacy of America's auditing firms to stay on top of the big issues, as they were giving unqualified audit opinions to "93.9% of public companies that were subsequently involved in accounting problems."

The complacency piece is people - so-called investors - not learning from the not-so-distant past as they happily absorb mainstream investment advice from non-objective sources and run with it. The stupidity part is them hanging the dartboard on the wall, turning their head the other way, and tossing that dart. We all remember the studies that showed monkees picking higher-performing funds than many fund managers, right? Or remember the experiment that had the child sitting at the computer choosing portfolio pieces, and picking a higher performing portfolio than the day trader?