I would like to thank the analysts at JP Morgan today for coming up with a very timely downgrade of Delta Airlines today. I fail to see how that downgrade could possibly have been more timely.

Here is the downgrade on September 13 at 9:04 AM.

Here is a more complete report.

JP Morgan airline analyst Jamie Baker estimated in a research note that Atlanta-based Delta will reduce capacity by 15 percent from current levels, similar to the shrinkage of the two other major airlines in bankruptcy, United and US Airways.

Baker said the bankruptcy filing would come as no surprise for Delta, which has racked up nearly $10 billion in losses since January 2001. In downgrading his rating on Delta to underweight from overweight, Baker said he believes Delta will continue to retire, sell or swap certain aircraft types as it simplifies its fleet.

Delta shares fell 7 cents, or 8.2 percent, to close at 78 cents in trading Tuesday on the New York Stock Exchange. Here is a weekly chart of Delta Air Lines:

By the way I also want to congratulate Moody's for being on the ball as well.

Besides the JP Morgan downgrade, Moody's Investors Service late Monday lowered certain debt ratings that apply to Delta. The bond rating agency cited as a reason the increasing likelihood that Delta will need to reorganize its obligations, either in or out of bankruptcy, because of its difficult operating environment.

Meanwhile, Delta is seeking a new round of concessions from its pilots. The pilots union said in a memo to its members that at a meeting with management Monday, the company presented the union with a "comprehensive, deeply concessionary contract proposal." The memo did not put a dollar amount on the concessions that Delta is seeking. A union spokeswoman said Tuesday that the union's executive committee will discuss the proposal at meetings starting Monday.

Sarcasm aside, let's see if I have my facts straight.

• JP Morgan airline analyst Jamie Baker said the bankruptcy filing would come as "no surprise" for Delta.

• Delta's stock has fallen for 9 consecutive weeks, and was as high as $7.50 per share back in January

• Up until 9:04AM on September 13, Jamie Baker maintained an overweight rating on Delta

• At the time of Jamie Baker's "timely" downgrade, Delta stock was trading approximately 85 cents.

Jamie Baker could you please answer a few simple questions for me?

1. If the bankruptcy filing was "no surprise" exactly why did you maintain an "overweight" rating on Delta while it plunged 89% in less than a year?

2. By any chance does JP Morgan have any kind of business relationship or loans to Delta?

3. By any chance is JP Morgan involved in credit swaps, derivatives, or any other type of investment that just might want JP Morgan to hold off downgrades and/or desire that a Delta bankruptcy be held off for as long as possible?

4. Is the word "sell" in your vocabulary?

Mish note: I do not know the answers to above the questions, but if anyone does know something that they can substantiate or if Jamie Baker would care to reply I would be glad to post it.

At any rate, I do have a problem with this whole smelly mess if for no other reason than it just plain looks bad. As I mentioned in Are You Missing the Real Estate Boom? (Part 2), it just does not seem right for Moody's and the big three rating agencies to maintain relationships or have investments in the companies that they rate. Should that apply to banks and brokerage houses as well?