With General Motors Corporation (NYSE: GM) begging the federal government for cash in the face of a deteriorating balance sheet and a hideous fundamental outlook, Standard & Poor's has placed the company on credit watch negative. S&P says the company has adequate liquidity for the balance of 2008, but that the outlook is murkier for 2009.

Shares of GM are currently down more than 20% but, suspiciously, had been lagging the market badly long before CNBC broke the story about the rating move.

I consider myself a big believer in contrarian investing, and I'm certainly not one of the "Sell stocks now! It's only going to get worse" crowd, but it's hard for me imagine how things will get better for General Motors. The balance sheet's a mess, the industry's in trouble, and General Motors has to battle with leaner overseas competitors. Don't even get me started on the legacy costs.

GM will probably bounce around, but it's hard to imagine that it's final destination will be anywhere other than bankruptcy.