It appears we are back to 2008 type trading; guess what the government is going to bailout next, and place your bets. The only irony in watching these stocks soar is knowing people in the supplier industry and these companies themselves and realizing what shape they are in, while their stocks surge. As we said last week, (Jun 4, 2009: Detroit's Woes Wound an Army of Suppliers) there will be a lot of fallout in the multi thousand supplier base but as with banks, it appears the government will protect the largest. And this is exactly the type of information having a bevy of friends from Goldman Sachs within government provides - you know exactly where to place your chips. Not that this type of thing ever happens. And we wonder how Goldman had only 8 losing days on their trading desk in all of first quarter 2009. (talent of course, not information flow) If you want some bemusement feel free to check out this piece on Huffington Post on how to properly sleep with the government (Government Sachs - Goldman's Close Ties to Washington Arouse Envy, Raise Questions) The "relationship" map within that story, not to mention the literal list of all the names intermixed in government.... is staggering.

But I digress! No matter what shape the companies are in today, as with Sequenom (SQNM) yesterday all that matters is a technical intraday breakout or a huge volume spike, and away we go... daytraders pile in. Today's winners are Lear (LEA) +50%, American Axle (AXL) +30% and Dana (DAN) +20%. The speculative fervor in low price stocks continues on. This is the sideshow, the real money will be made when the government picks the winners of its next round of largess, and the information is kept "top secret" (no leaks) so those with connections won't be able to alert their trading desks.

Anyhow back to the resurgent* auto supplier business. Look at those volume spikes the past 2 days! Yowsers - one point about "American" Axle (AXL) - last I read in the local paper a few weeks ago "American" Axle is in the process of closing all its American plants and moving operations to Mexico. Just wanted to let your grandkids know where their money is going as we unleash more bailouts :) Oh don't worry - the salaries still stay with the CEO, CFO and the top staff and a few white collar folk in the good ole USA, so your bailouts are helping out.