One more unimaginable thing is happening. GM may file for bankruptcy if the bailout fails. GM’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan. GM revealed the concerns in a filing to SEC.

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,” auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

More details are here. I hope that union workers understand the severity of the issue and work with the management to save the company.

S&P 500 index is down by 8.57% this month. That’s very bad news for the people like me that believe in January barometer theory. The theory goes like this — if stock market goes down in January, it will likely go down for the entire year. It’s not a superstition. It’s a documented fact. This theory was wrong only in few years like 2003 where the stock market was down 2.7% in January but still ended the year with 26.4% gain.

I hope that this year may prove the theory wrong. But, I don’t want to bet on it. There are so many unknowns at this point. Everyone is expecting some kind of miracle from the fed. However, with the speed our politicians are moving to solve the current crisis, I am not sure whether we can see the light at the end of the tunnel. State governments don’t have enough funds to give it to unemployed. Even rental car companies are asking for bailout. I don’t know where all these would end. January barometer would be proved wrong only if the government is able to get the $700 billion bailout (and $819 billion bailout) quickly and generate lot of jobs as Obama promised.

Related Link: January drop is not a welcome sign for 2009

Forget the banks, now even rental car companies seek bailout from Fed. Bizarre, isn’t it? As usual, these companies have their own weird logic to seek the taxpayers’ money.

Last month, the chief executives of Enterprise, Avis, Hertz and Dollar Thrifty sent a letter to House leaders pressing them to help the industry. “The impact of the declining economy on our business has already resulted in significant cost reductions, staff cutbacks and facility closures,” they wrote. “In addition, our industry faces significant near term financing challenges…We therefore believe that government action is necessary to help restore access to capital.”

Ok, here is my letter to the congress. “”The impact of the declining economy on my job has already resulted in job loss, declining stock portfolio value and foreclosures. In addition, the banking industry I specialized in faces significant near term financing challenges… It appears that I would not get another job for next 12 months. I therefore believe that government action is necessary to help me to have access to capital.”

These guys have no shame at all. There is no difference between these executives and the street beggar in San Francisco downtown.

Related Link: Rental car firms seek bailout

Man protesting outside New York stock exchange. Where is my bailout?