GM's Loss: Not A Record But Hardly Trivial

We have had triple digit moves every day of the week: down 240 Monday, up 266 Tuesday, up 186 Wednesday, down 205 yesterday? What's it all mean? Nothing--Dow is unchanged for the week!

Futures moved up a couple points as the nonfarm payroll came in with losses slightly less than expected.

GMlost $15.5 billion, $27.33 a share(ADJUSTED LOSS WAS $11.21 A SHARE, analyst estimate was a loss of $2.62--think analyst estimates have any meaning when it comes to autos and financials? I don't). Significant losses in GM North America, the strike at American Axle, and continued losses at GMAC Financial were just a few of the problems. They say they have access to $26 billion in liquidity, and insist that they have enough liquidity to last through 2009.

This is not a trivial loss: the total earnings for the S&P 500 in the second quarter is now down 19.4 percent; a hit of this magnitude will bring that number down significantly.

Bad as it sounds, it is not a record: the biggest single quarterly loss of all time was AOL Time Warner's loss of $44.9 billion, in the fourth quarter of 2002. In fact, it's not even the worst for GM: it was worse in the third quarter of 2007, when they lost $39 billion ($68.85 a share).

1) What an ugly week for Irish drug maker Elan. It's down 40 percent as they revealed two new brain disease cases in patients taking their Tysabri multiple sclerosis drug. Its U.S. partner Biogen Idecalso down as well. Earlier in the week Elan got hit hard on disappointing data on an experimental Alzheimer's drug.

2) Specialty equipment maker Oshkosh down 6 percent, beat on the topline, but guidance for current quarter is well below estimates, citing weak residential and non-residential construction in North America AND "certain areas of Western Europe." This is the second time they have cut their guidance.

3) Boydeliminated their dividend, and delayed the Echelon Place project in Las Vegas due to "capital markets and the challenging economic conditions." Sound bad? Stock is up 25 percent because the Street is happy the project was delayed because it reduces the near-term funding demands on the company. They also authorized a $100 million share repurchase.

Questions? Comments?