Yet another reason to avoid American automakers

As if their overall strategy, quality and labor hassles weren't enough to deter investors, GM now admits that the SEC is investigating the firm's use of financial hedging tools, as well as possible restatements of earnings derived from GM's former banking arm.

Previously, I blogged about what I felt was unfair criticism towards GM. Although I certainly didn't recommend the stock, I suggested that it might be a viable option in the future and was unfairly linked to the slumping Ford and Chrysler. Despite these recent allegations, I still believe GM is in better overall shape then Ford, who is now saddled with some $167 Billion in debt. GM's $46 B certainly isn't a good number, but it comes at one third of the amount Ford has, making it a much more attractive stock for private equity and investment firms.

Judging from the recent news though, I would continue to keep clear of US automakers until Detroit proves it can maintain profitability over a 2-quarter period.

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Both Japanese carmakers recently experienced undeserved price declines over the past few months and possess appealing valutaions