You know it was a weird day when Michael Jackson’s stock rose while nearly everyone else’s fell. His lawyers put a 22-year-old on the witness stand who swore Jackson had not molested him as a child. You read that right. This was one of five witnesses the prosecutor had identified as a victim of Jackson; but if not, yesterday may have been the former pop star’s  best day in court in a long while. Even so, it would take quite a few more days like it to salvage a big chunk of Jackon’s net worth reportedly tied up in rights to most of the Beatles’ hits and to his own catalog of musical blockbusters. A huge loan financed the deal, but it was sold by B of A to a hedge fund that could take over the portfolio at distress prices if Jackson defaults.

While the erstwhile moon walker’s defense was enjoying a rebound in the courtroom, Tony Blair’s Labour majority was getting whacked in British elections; Blockbuster was barreling down the road to ruin, Carl Icahn in tow;  and the debt of GM and Ford was getting downgraded to instant junk status by Standard & Poor’s. S&P’s action triggered a rule requiring that all of the automakers’ bonds be removed from the market for a month while they are re-evaluated by other rating agencies. At the end of this period the bonds must be sold, so there is going to be a huge flood of corporate paper at that time. Because GM and Ford are 30 times the size of Enron, this will cause more than mere ripples in the world of stocks and bonds. It is also likely to be bullish for Treasurys, since they constitute the only market liquid enough to absorb the kind of money that will be flowing from GM and Ford paper into something else. Something to look forward to, we hope.