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Junk bonds are more about reading tea leaves than a science but sometimes, especially with extremely undervalued or overvalued entities, it goes from "tea leaves" to ludicrously silly. Like today. CNBC's reporting "bond gurus" as pricing GM bonds in such a way that Iraqi national bonds are rated higher. That means pricing's occurring on the belief that "Iraq has about the same chance of going bankrupt as General Motors." The mid-day show on the network most well known for letting me on to talk about the auto industry also had another Ray talking about what seems to be a very bubble-tastic bond market. This ray of light on the issue was Raymond Kennedy of PIMCO, who would "definitely take GM bonds over Iraq," mostly because...

..."GM's got some great new product lines that are starting to gain traction in the marketplace." We'd also have to believe that it's because insurgents aren't ringing GM assembly plants with IED's. But, hey union negotiations are coming up soon, so you never know. Of course, now that we think about it, that earnings restatement's kinda like losing that cargo plane of money everyone's talking about. Maybe there are some similarities here...nah, not really.

Junk Bond Bubble? [CNBC]

Breaking! GM To Restate Prior Results, Delay 2006 Year-End And Fourth Quarter Numbers [internal]