Market gapping down

Perhaps a little sense is creeping back into the market as we gap lower today. Most Asian and European markets were down sharply overnight, and the dollar is up sharply over the Euro.

Looks like GM and Chrysler are stepping up bankruptcy preparations. I must admit that I never thought Obama would let them go into bankruptcy. Although this is necessary if they are to ever recover, it will be extremely painful for many people in the midwest. If GM closes down most of its brands and is left with Chevy and Cadilac, how many dealers accross the country will be forced to close shop. Everyone who sells the other brands can't just start selling Chevy's or you would have unsustainable competition.

In M&A news DISK and Nyx (not nyse) have agreed to ammended merger terms. (Full disclosure) I have taken a position in DISK this morning as I beleive this deal will be done. It shows good faith that Nyx is adding $1 million in working capital in the interim. This sum represents close to 3% of the total purchase price and is non recourse. (These statements are all my interpretation of the facts and are not intended as investment reccomendations).

I know that Meridith Whitney's comments yesterday goosed the market at the close, but I don't beleive she has really changed her stance. Not wanting to initiate shorts at this level does not mean she thinks they are worth buying. Companies and consumers are defaulting at an increased rate, and this trend is likely to continue. I am not short any banks, but I don't think Dick Bove was correct in saying BAC would return to highs. At least not in the next decade, in my opinion.