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The Bottom Rung

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23

March 10, 2009 – Comments (4) | RELATED TICKERS: MCO

 

Wow, the markets are on fire right now.  Who would have thought that we'd see such a rally?  Oh yeah, I did when I said "I would not be surprised in the least if we put together some sort of nice, sustained rally in the near future here." last Wednesday (link: Here's a chart that you don't want to miss).  Before I break my arm patting myself on the back, a lot of people were looking for a rally and I wasn't short anything or buying any common stock in real life (just buying more bonds) so my prediction didn't mean much to me financially.

When I saw that the major averages were up 6% to 7% a few minutes ago, I thought to myself "Man I can't remember a 5%+ up day in the markets.  I must have been ages since we've had one."  Apparently not.  According to Bespoke Investment Group, this is actually the eighth single-day 5%+ bear market rally that we have seen since the S&P 500 hit its peak in October '07 (link).  Interesting.

It goes to show just how much the beating that the markets have been taking lately ingrains itself in your mind.  It would be nice to carry some of this momentum over until tomorrow.  We haven't had two consecutive up days since the first week of February.  I wouldn't be surprised if this one stuck around for a little while, but in the end I personally am treating this as another short leg up in the middle of one huge leg down.  As the Boss would say, "One Step Up and Two Steps Back."

Anyhow, enough about things that you probably already know and on to something slightly more obscure.  It's going to take me a while to type the rest of this post, because I'm only using one hand.  I'm using the other one to hold my nose because I despise the company that I'm about to mention.  What company is that you ask?  Moody's (MCO).  The irresponsible, idiotic, crooked ratings agencies disgust me because they played a big part in getting us into this whole mess and they haven't been held accountable for their actions (other than a deserved crushing of the stock prices of the public ones).

Today Moody's published a list called “The Bottom Rung.” (link, free subscription required).  This list consists of the names of the 283 U.S. companies that companies that Moody's believes are the most likely to default on their debt.  If a group of people as stupid as the ones at Moody's think that a company is in big trouble, there's a good chance that it is seriously messed up.  Perhaps these companies forgot to make their payoffs to Moody's.  Even if they aren't going to go bankrupt in the near future, at the very least it is going to be pretty darn tough for these companies to borrow money in today's environment.  Needless to say, I personally would stay far away from them as an investor.

The list contains some interesting names including chip maker AMD, Palm, just about every airline (again...when are people going to learn not to invest in them), Arby's (mmmm, roast beef), Sbarro, Krispy Kreme, Harry & David, OSI Restaurant Partners (Outback Steakhouse), Barneys New York, Jacuzzi, Blockbuster (there's a shocker), Bon-Ton Stores, Brookstone (ready to join its fellow gadget-hawker Sharper Image), Eastman Kodak, Stillwater Mining, Rite Aid, Chiquita, Dole, Chrysler (I told you so), OK all the U.S. automakers and most of their suppliers suppliers, Reader's Digest, OK 46 companies in the media industry, Value Creation Partners (now that's a misnomer), you get the idea...I'll post the rest of the list below. 

The point of this post is that even though Moody's is a bunch of shady idiots, there are a lot of companies that are in big trouble out there.  When companies go broke, people get laid off.  I expect the unemployment rate to rise to over 10% before this whole mess is said and done, possibly before the end of the year.  I would be shocked if we've seen the absolute bottom in the major indicies.  Even when things do bottom I suspect that we'll sit there for a while.

Here's the list.  Enjoy, I guess.

Deej

Accellent Inc.

Accuride Corporation

ACIH, Inc.

Advanced Micro Devices, Inc.

Advanstar Communications, Inc.

Affinity Group Holding, Inc.

AGS, LLC

AirTran Holdings, Inc

Alion Science and Technology Corp

Allbritton Communications Company

Allison Transmission, Inc.

Alon USA Energy, Inc.

American Achievement Group Holding Corp.

American Axle & Manufacturing Holdings, Inc.

American Media Operations, Inc.

Ames True Temper, Inc.

AMH Holdings, Inc.

AMR Corporation

Arby's Restaurant Group, Inc.

Arinc Incorporated

Atlantic Express Transportation Corp.

Autocam Corporation

Aventine Renewable Energy Holdings, Inc.

Baker & Taylor Acquisitions Corp.

Barneys New York, Inc.

Barrington Broadcasting Group

BCBG Max Azria Group, Inc.

Beverages & More, Inc.

Blockbuster Inc.

Bluegreen Corporation

Bonten Media Group, Inc.

Bon-Ton Stores Inc.

Bowater Incorporated

Brigham Exploration Company

Broder Bros., Co.

Brookstone Company, Inc.

Buffalo Thunder Development Authority

Builders FirstSource, Inc.

Building Materials Corporation of America

Building Materials Holding Corporation

Burlington Coat Factory Warehouse Corp

Cambium Learning, Inc.

Canon Communications, LLC

Caraustar Industries, Inc.

Carmike Cinemas, Inc.

CavTel Holdings

CCM Merger, Inc.

CCS Medical Inc

Centaur, LLC

Center Cut Hospitality, Inc.

Champion Enterprises, Inc.

Chaparral Energy, Inc.

Charter Communications Inc.

Chem Rx Corporation

Chemtura Corporation

Chiquita Brands International, Inc.

Chrysler LLC

Circus and Eldorado Joint Venture

Citadel Broadcasting Corporation

Claire's Stores, Inc.

Clearwire Communications LLC

Cleveland Unlimited, Inc.

CMP Susquehanna Corp

Coach America Holdings, Inc.

Cohr Holdings, Inc.

Coinmach Service Corp.

Commercial Vehicle Group, Inc.

Conexant Systems Inc.

Continental Alloys & Services, Inc.

Cooper Standard Automotive Inc.

Cooper Tire & Rubber Company

Culligan International Company

Cumulus Media Inc.

DAE Aviation Holdings, Inc.

Dana Holding Corporation

Dayton Superior Corporation

DeCrane Aerospace, Inc.

DEI Holdings, Inc.

Delta Petroleum Corporation

Destination Maternity Corporation

Diagnostic Imaging Group, LLC

Dole Food Company, Inc.

Dollar Thrifty Automotive Group, Inc.

Downstream Development Authority

Duane Reade, Inc.

Dune Energy, Inc.

Eastman Kodak Company

Easton-Bell Sports, Inc.

Eddie Bauer, Inc.

El Pollo Loco, Inc.

Electrical Components International, Inc.

Emmis Communications Corporation

Endurance Business Media, Inc.

Energy Partners, Ltd.

Energy XXI Gulf Coast, Inc.

EnviroSolutions Holdings, Inc.

Euramax International, Inc.

Eurofresh Inc.

Evergreen International Aviation, Inc.

Evergreen Tank Solutions, Inc.

Finlay Fine Jewelry Corporation

Fleetwood Enterprises Inc.

Fontainebleau Las Vegas Holdings, LLC

Ford Motor Company

FoxCO Acquisition Sub L.L.C.

Freedom Communications, Inc.

Freescale Semiconductor, Inc.

French Lick Resorts & Casino, LLC

Frontier Drilling

Gastar Exploration USA, Inc.

GateHouse Media Operating, Inc.

GenCorp Inc.

General Motors Corporation

Georgia Gulf Corporation

Global Crossing Ltd.

Gold Toe Moretz Holdings Corp.

Golden Nugget, Inc.

Grande Communications Holdings, Inc.

Gray Television, Inc.

Green Valley Ranch Gaming, LLC

Guitar Center Holdings, Inc.

Haights Cross Communications, Inc.

Hanley Wood LLC

Harrah's Entertainment, Inc.

Harry & David

Hawker Beechcraft Acquisition Company LLC

Hilite International, Inc.

HLI Operating Company Inc.

Hollywood Theaters, Inc.

Hovnanian Enterprises, Inc.

Human Touch LLCIdearc, Inc.

Indalex Holding Corp.

Indianapolis Downs, LLC

Inn of the Mountain Gods Resort and Casino

Instant Web, Inc.

Intcomex,

IncIntegra Telecom, Inc.

Intelsat, Ltd.

InterDent Service Corporation

International Coal Group, Inc.

ION Media Networks, Inc.

IPS Corporation

Jacuzzi Brands Corp.

James River Coal Company

JetBlue Airways Corp.

JHCI Acquisition, Inc.

Jobson Medical Information LLC

Keystone Automotive Operations, Inc.

Krispy Kreme Doughnut Corporation

Landmark FBO, LLC

Lazy Days' R.V. Center, Inc.

Lear Corporation

Level 3 Communications, Inc.

Libbey Glass Inc.

LifeCare Holdings, Inc.

Little Traverse Bay Bands of Odawa Indians

Local TV Finance, LLC

Lodgenet Interactive Corporation

Loehmann's Capital Corporation

MACTEC, Inc.

MAPCO Express, Inc.

Mark IV Industries, Inc.

Mattress Holdings Corp.

MediaNews Group, Inc.

Metaldyne Corporation

MetoKote Corporation

MGM MIRAGE

Michaels Stores, Inc.

Milacron Inc.

Millennium New Jersey Holdco, LLC

Morris Publishing Group, LLC

Motorsport Aftermarket Group, Inc.

MSX International, Inc.

MXenergy Holdings Inc.

NBC Acquisition Corp.

Neenah Foundry Company

Neff Corp.

NES Rentals Holdings, Inc.

Newark Group, Inc.

Newport Television Holdings LLC

Nexstar Finance Holdings, Inc.

NextMedia Operating, Inc.

Novamerican Steel Finco Inc.

November 2005 Land Investors, LLC

NTK Holdings, Inc.

NV Broadcasting, LLC

Open Solutions, Inc.

Orbitz Worldwide, Inc.

Oriental Trading Company, Inc.

OSI Restaurant Partners, Inc.

Palm, Inc.

Panavision Inc.

Panolam Industries International, Inc.

Parallel Petroleum Corp

Pegasus Solutions, Inc.

Penhall Holding Company

Penton Business Media Holdings, Inc.

Perkins & Marie Callender's Inc.

Ply-Gem Industries, Inc.

Primus Telecommunications Group, Incorporated

Quality Distribution, LLC

Quality Home Brands Holdings LLC

Quantum Corporation

Questex Media Group, Inc.

Quiksilver, Inc.R.H.

Donnelley Corporation

Radio One, Inc.

Rafaella Apparel Group, Inc.

Rare Restaurant Group, LLC

RathGibson, Inc.

Reader's Digest Association, Inc.

Real Mex Restaurants, Inc.

Realogy Corporation

Regent Broadcasting LLC

Renfro Corporation

Revere Industries, LLCR

hodes Companies, LLC

Rite Aid Corporation

Riviera Holdings Corporation

Rotech Healthcare, Inc.

Roundy's Supermarkets, Inc.

Sagittarius Restaurants LLC

Salem Communications Holding Corporation

Sbarro, Inc.

Securus Technologies, Inc.

Sirius XM Radio Inc.

Sitel LLCSix Flags Inc.

Snoqualmie Entertainment Authority

Source Interlink Companies Inc.

Spanish Broadcasting System, Inc.

St. John Knits International, Incorporated

Standard Motor Products, Inc.

Standard Steel, LLC

Stanley-Martin Communities, LLC

Station Casinos, Inc.

Sterigenics International, Inc.

Stillwater Mining Company

Sunstate Equipment Co., LLC

Swift Transportation Co., Inc.

Synagro Technologies, Inc.

Synchronous Aerospace Group

Targus Group International, Inc.

TCO Funding Corporation

Tegrant Corporation

Telcordia Technologies Inc.

Tenneco Inc.

Thermadyne Holdings Corporation

Trailer Bridge, Inc.

Tropicana, LLC

True Temper Sports, Inc.

Truvo Subsidiary Corp

TSA Stores, Inc.

UAL Corporation

UCI Holdco, Inc.

Unifi, Inc.

Unisys Corporation

United Site Services, Inc.

United Subcontractors Inc.

Univision Communications, Inc.

US Airways Group, Inc.

US Xpress Enterprises Inc.

USEC Inc.

Value Creation Partners - Best Brands

Veyance Technologies Inc.

Viskase Companies, Inc.

Visteon Corporation

WasteQuip, Inc.

Waterford Gaming LLC

Western Refining, Inc.

White Birch Paper Company

WII Components, Inc.

William Lyon Homes

Wilton Products Inc.

Wise Metals Group LLC

Wm. Bolthouse Farms, Inc.

Wolverine Tube, Inc.

Workflow Management, Inc.

WP Evenflo Holdings, Inc.

Xerium Technologies, Inc.

X-Rite Incorporated

YRC Worldwide Inc.

4 Comments – Post Your Own

#1) On March 10, 2009 at 6:12 PM, rofgile (99.29) wrote:

TMFDeej,

 

 SiriusXM is ok for all of 2009.  However, starting in 2010, 2011 they will have to make regular payments on the principal of the loans from Liberty Group.  Contrary to all the media reports in the last three weeks (and sadly some MF articles), they are not at bankruptcy risk for this year.  If they can't make the payments which will be regular starting in 2010, they will be at the place they were at just a couple of weeks ago.  

 Right now, they are guaranteed to last through the year.  If the company report which comes out in 8 days doesn't look absolutely terrible - this stock might actually start to ... gasp.. go up again. 

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#2) On March 11, 2009 at 1:41 AM, Option1307 (29.65) wrote:

New Caps profile anyone? Anyone?

Just for the heck of it, to see how these predictions turn out. I would, but I'm far to lazy...

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#3) On March 11, 2009 at 11:52 AM, cmoney85 (20.53) wrote:

TMFDeej,

What bonds or bond funds do you own/reccommend??

 

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#4) On March 12, 2009 at 3:02 PM, OleDrippy (34.93) wrote:

I see a lot of casino companies in that list.. Sad

 Marie Callender's, Sbarro, and Krispy Creme? Where am I going to get my frozen entree, pizza, and danish? Oh no!!

 Thanks for the list! I would be interesting to see how a short profile on all these turns out over the next year or two.

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