The Freep reports that Fitch is eying another credit downgrade for Chrysler LLC. Why? Where to begin? Chrysler CEO Bob Nardelli could have been too forthcoming in his House Financial Services Committee testimony. You know, the parts about being in “a very fragile position,” having only $6b, and having already drawn up bankruptcy plans. Or maybe it’s the JP Morgan report released yesterday that says “Proposed Chrysler assistance is slightly outsized in relation to its market position. It was suggested these amounts could compensate for the automakers’ likely FY2009 cash burns.” Or maybe it’s just based on the generally negative reaction to Detroit’s jet-by testimony. In any case, Fitch says that without “material federal assistance in the short term” the agency would review the current rating for potential downgrading to CC — which “indicates that default is probable” — from its current CCC rating. Oh yeah, and there’s also this little knife-twisting sentence: “the provision of federal assistance may not preclude a downgrade.” In fact, Fitch thinks some form of assistance is “probable.” After all, “Chrysler is dependent on the financial capacity and willingness of its suppliers to continue extending trade credit, as the company does not have sufficient resources to finance ongoing operations in the event that trade credit is curtailed.” Ouch.