GM Reports $39 Billion Loss on Deferred Tax Charge

[Sapiens]

http://www.bloomberg.com/apps/news?p...d=a7_H.c9Sn4Iw

Nov. 7 (Bloomberg) -- General Motors Corp., the world's largest automaker, reported a record $39 billion quarterly loss after three money-losing years forced the company to write down the value of future tax benefits.

The loss, excluding the tax writedown, was $2.80 a share, more than 12 times analysts' estimates. Mortgage-related losses at GM's partly owned finance unit overwhelmed auto sales that were the highest ever. GM shares fell the most in 13 months, giving the Detroit-based automaker a market value of $19.2 billion, about half the size of the third-quarter loss.

Gents... I am at a loss for words, although I expected it.

[olivegreen]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

The "I have no idea what is going on" person is here again to ask some stupifyingly stupid questions hoping against all odds one of you brilliant types will humour me...

1) What is going on?

2) Should everybody max out their credit cards and buy gold and/or euros?

3) They say the truth is somewhere in the middle and I can't find the middle when I go out there and look at "investor's" e-boards... people are either happy or horrified. Who is right?

4) Will Canada go the way of the USA?

5) My most stupifyingly stupid question of all: everybody says "sell this, sell that because the bottom is dropping out.." If this is true, who are they selling to? I can't get my feeble brain around this simple concept...

olive

[Sapiens]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

1) What is going on?

olive,

You are witnessing the consequences of the penultimate stage of an economic system based on a financial delusion as it struggles against the physical constraints of the Laws of Nature.

-Sapiens

[olivegreen]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

Sapiens, thank you kindly for your penultimate response. Let us try to be reasonable I'm thinking. (Although I'm not sure who "we" is exactly...) I'm reading things now about 1929. It's the exact same thing... the distribution of wealth, the credit problems, the meetings of the bankers to buy up large groups of shares at inflated prices of key companies to save the day.... But then... the whole damn thing called the depression was supposed to result in laws and rules to protect us all... Is this not the case? What people call the PPT (Plunge Protection Team) I gather... is this not the Fed's role and isn't it what they're supposed to be doing? I know you all know this already but this is what I was reading:

What is the Fed’s Function?: The Fed’s most important and visible function is to control inflation without triggering a recession. In addition to that, the Fed has three other less visible functions:
Supervise the nation’s banking system to protect consumers.
Maintain the stability of the financial markets and constrain potential crises. (A good example of this is the handling of the Long Term Capital Management Crisis in 1998).
Be the Central Bank for other banks, the U.S. Government, and foreign banks.

[GRG55]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

http://www.bloomberg.com/apps/news?p...d=a7_H.c9Sn4Iw



Gents... I am at a loss for words, although I expected it.

Isn't this just another step in the progression of the contraction - now it's hitting the "financials in drag" corporations? Can GE be far behind?

[c1ue]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

GRG,

I'm working on a breakout of GMAC's contribution to GE's bottom line vs. the rest of the company.

It is looking more and more like the Jack Welch miracle was primarily smoke and liar's loan (S & L) mirrors.

[c1ue]

Re: GM Reports $39 Billion Loss on Deferred Tax Charge

Sapiens, thank you kindly for your penultimate response. Let us try to be reasonable I'm thinking. (Although I'm not sure who "we" is exactly...) I'm reading things now about 1929. It's the exact same thing... the distribution of wealth, the credit problems, the meetings of the bankers to buy up large groups of shares at inflated prices of key companies to save the day.... But then... the whole damn thing called the depression was supposed to result in laws and rules to protect us all... Is this not the case?

OG,

There were laws passed to protect the people, both good and bad.

On the bad side, Smoot Hawley slapped punitive tariffs on imports which probably worsened the problem (did not cause it).

On the good side, Glass Steagall was passed to prevent conflicts of interest within a bank and prevent banking conglomerates in general - I define a conglomerate in this case as a combination of commercial and investment bank.

The Glass Steagall restrictions were repealed by Congress in 1999 with the passing of the Gramm-Leach-Bliley Act.

Thus lobby-ocracy in action.