GM reports $39 Billion loss

[02ultraZ]

Heard it on the news last night. What do you think caused this? I know they quit making oldsmobiles all together, and sales are down otherwise. But $39 billion? holy shit.

[02ultraZ]

http://money.cnn.com/2007/11/07/news...ion=2007110709

[theGeneral]

the news and everyone else will only see the negative. the 39 bill "loss" was for accounting purposes (i.e. TAXES).
look at the keys of the announcement:

• Record third-quarter automotive revenue of $43.1 billion
• Improved automotive operations on continued strength in emerging markets
• Ongoing challenges in U.S. mortgage market adversely impact GM income from GMAC
• $39 billion reported loss driven by $39 billion valuation allowance on deferred tax assets
• Improved liquidity position of $30 billion
  

The company is headed in the right direction and in the long term ( I believe) will be ok.

[02ultraZ]

I hope so. I didn't think they were going out of business or anything, and i think selling half of GMAC was a mistake. They have a lot of great new cars out now, and there are some more good ones coming out. They'll rebound but it's just depressing seeing shit like that happen.

[gwballin]

As has already beet stated, this is an accounting loss not an economic loss. No big deal.

[02ultraZ]

then how come most of the top financial investors switched their rating for GM's stock from hold to sell?

[94z28l]

then how come most of the top financial investors switched their rating for GM's stock from hold to sell?

maybe they wanna buy it cheap

[third_shift|studios]

some day, i'll be able to report a loss of that $39billion...as a donation to charity...b/c i'll be that god damn filthy rich

[theGeneral]

then how come most of the top financial investors switched their rating for GM's stock from hold to sell?

I've heard that a lot actually switched it from sell to hold and also one HUGE critic switched it to buy.

[gwballin]

then how come most of the top financial investors switched their rating for GM's stock from hold to sell?

Deferred tax assets and liabilities arise from timing differences due to the different rules between GAAP (generally accepted accounting principles aka book accounting) and tax accounting.

For example, when you recognize an expense for book proposes that you can not yet take for tax purposes you create a deferred tax asset. Put another way, due to the differences in rules, the current year tax liability is higher relative to book income but in the future the amount will be reversed (so it is an asset going forward).

The reason I would imagine that the rating switched is because there is now a question as to whether GM will actually be profitable enough in the future to recognize the benefit of the assets due to the tax credits. Put another way, you can't reduce income if you don't have income.

[0rion]

I never realized we had this many nerds on the site.
My buddy managed a loan office for GMAC. He saw that coming a long time ago when they didn't renew their lease on the building and left.

[02ultraZ]

Cool thanks for the info guys.

[Frankthetank]

GM is the biggest automotive seller for this year they should be alright...
Toyota i think was first last year

[TMF]

It doesn't take a college degree to see what GM is producing compared to what proffitable car co's are making. I've been looking at new cars and there's nothing from GM I'm remotely interested in...........It's sad

[02ultraZ]

GM is the biggest automotive seller for this year they should be alright...
Toyota i think was first last year

I don't think toyota has placed first yet...

[02ultraZ]

It doesn't take a college degree to see what GM is producing compared to what proffitable car co's are making. I've been looking at new cars and there's nothing from GM I'm remotely interested in...........It's sad

Wow I like a lot of the new cadillacs, the vettes, some of the pontiacs are ok. I like the trucks and SUV's and the new malibu's aren't bad looking. They are supposed to compete with the camry and i would take a malibu over a camry any day. I can't beleive you have no interest in any of those vehicles. What about the Trail Blazer SS?

[theGeneral]

the saturn aura beat the camry out as Motor Trend Car of the Year.

Also, to address the "statement" made a couple posts up: Toyota has not come in 1st yet. They have beat ford out and are currently #2. It's a tight race right now, but GM should be #1 for the remainder of the year. I can tell you though that GM's focus is now on quality and not quantity (new cts, new aura, new malibu, new G8 [which I want!!], new enclave, new acadia. etc, etc, etc)

[TMF]

Wow I like a lot of the new cadillacs, the vettes, some of the pontiacs are ok. I like the trucks and SUV's and the new malibu's aren't bad looking. They are supposed to compete with the camry and i would take a malibu over a camry any day. I can't beleive you have no interest in any of those vehicles. What about the Trail Blazer SS?

Dude, have you looked at Lexus? their interiors blow away anything

[02ultraZ]

I don't shop for cars for the interiors.

[gwballin]

I don't shop for cars for the interiors.

that is were we disagree.