I think many people do not understand the daisy chain that is the automotive industry - there are countless suppliers of various size. They have been in a "right sizing" for a decade now, decimating the ranks (we've lost about half of them as we offshore) but there are still literally thousands out there. Lost in the "headline news" of the week (green shoots mind you) was the bankruptcy of Visteon (yes last week) - which was spun off of Ford much like Delphi (in bankruptcy since 2005) was spun off of General Motors. Metaldyne is another supplier that went bankrupt last week (a smaller supplier) and I expect a bevy more to go this summer and fall. So while I expect (government reported) unemployment to level off and even improve from the dramatic (twice in a lifetime) levels we have seen, we have a slew of folk that will be joining the ranks from this industry and I think it is being understated. But now we'll see some good sized firms go....
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. 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.
