Ford and GM Are Sucker's Bets, But...

Do you play GM (GM - commentary - Cramer's Take) stock? How about Ford (F - commentary - Cramer's Take)? These are two questions I am asked everywhere. By everyone. Airplane pilots. Kids. Parents along the sidelines. People watching ballgames.

Off course, the rigorous answer is NO. There is probably no value whatsoever to these common stocks. They are not even in the pecking order of anything that could be positive for these guys, including a pre-packaged bankruptcy with debtor-in-possession financing.

There are three scenarios. First is the most likely: bankruptcy. Common rarely if ever survives in a bankruptcy. Auto bankruptcies will not be liquidations where the common vanishes. It will, instead, be dragged out and perhaps you get something down the road, some warrants in NewGM, say, but there are so many pieces of debt out there that could be ahead of you that it is ridiculous to presume that you could get anything.

A second way is a Fannie (FNM - commentary - Cramer's Take) and Freddie (FRE - commentary - Cramer's Take) way where whatever is left might give you something. This is extremely optimistic because that's a receivership, and I don't envision any way that the government takes these over.

Finally there is the AIG (AIG - commentary - Cramer's Take) scenario, which is the best -- a huge amount of common stock is given to the government. That's a way to get some value for the common and is a possibility.

It is because of that AIG possibility that I am unwilling to say that you can't trade the common stock. In other words, the common stock is worthless because both Ford and GM are running out of money, but because things are so nutty it might mean you are going to have continued hope -- and therefore continued volatility to the upside every time that there looks like a bailout.

In other words, it is a sucker's play. They are both sucker's plays.

But it doesn't matter. They will trade it anyway, and if I tell you it's worthless, you'll be angered that you miss the big jump whenever a senator says something positive about the group.

At the time of publication, Cramer had no positions in the stocks mentioned.

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Know what you own: Cramer mentions automakers. Other companies in the industry include Honda (HMC - commentary - Cramer's Take) and Toyota (TM - commentary - Cramer's Take).

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