Guess the Federal Bailout, Win Money - Today's Sector: Auto Supplier Lear (LEA) +50% and Dana (DAN) +20%

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)

But no matter what shape the companies are in today, as Sequenom (SQNM) yesterday all that matters is a technical intraday breakout, and away we go... daytraders pile in. Today's winners are Lear (LEA) +50% 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 ketp top secret so those with connections won't be able to alert their trading desks.

Look at those volume spikes the past 2 days! Yowsers

Enjoy

• U.S. auto-parts companies plan to ask the Obama administration for as much as $10 billion in new aid as General Motors Corp. and Chrysler LLC bankruptcies deepen the suppliers' troubles. The Treasury earlier this year put in place a $5 billion program to guarantee GM and Chrysler payments to suppliers, but supply groups said the program falls short of what they need.
• Trade groups will meet Wednesday with President Barack Obama's auto task force at the Treasury Department and warn that hundreds of parts companies could collapse without the aid.
• The parts companies account for more than three-quarters of auto-sector employment in the U.S., according to a Chicago Federal Reserve study, with employment of about 600,000 -- roughly five times as many workers as are expected to be employed by GM and Chrysler's domestic operations once their government-subsidized restructurings are done.
• A Treasury Department spokeswoman said administration officials "will continue to work with the companies and monitor the auto supply base going forward."
• The supplier groups also plan to meet with members of Congress on Thursday to press for alternatives, including legislation, if the administration declines to provide further aid