Deconstructing the Downgrades

Lots of big downgrades today. The General Motors (GM - commentary - Cramer's Take) downgrade by Deutsche Bank confused me because they keep Ford (F - commentary - Cramer's Take) as a buy, although the key new negative here is Delphi -- and the need to put more money into that. We really don't know how the ResMed (GMAC-Ditech) relationship with Cerebrus will strain the 49% that GM (GM - commentary - Cramer's Take) has to deal with. I am not buying this one and continue to recommend the GM preferreds.

UBS' downgrade of Peabody (BTU - commentary - Cramer's Take) intrigues if only because at the same time that it downgrades the darn thing, it raises the price target. Huh?

But that's because the next nine months will be awesome, and UBS doesn't want you to miss that before you sell it. Still, confusing, and I am not sure about this one.

But Deutsche Bank's new sell rating for New York Times (NYT - commentary - Cramer's Take) makes a ton of sense. This one has been bid up by a hedge fund that is hopeful that it can affect the family ownership of the company. It is possible that the company will react by firing a huge percentage of the newsroom, but I regard that as unlikely.

What's likely is a cut in the dividend, which is really keeping the stock in the teens -- besides the buying by the Harbinger fund. Now, here's the real issue here: The unified nature of the family that owns it is so different from the diffuse group that owned The Wall Street Journal that I continue to believe that trying to buy the NYT is like trying to buy Yale.

It isn't in the cards. Also, I agree with the slew of downgrades of Fannie Mae (FNM - commentary - Cramer's Take) and Freddie Mac (FRE - commentary - Cramer's Take). Those two have become the dumping ground for all the housing woes, and they need to take big charges and build capital again.

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