IF AUTO SALES ARE BOOMING WHY ARE GM PROFITS PLUNGING?

7 comments

Posted on 2nd May 2013 by Administrator in Economy |Politics |Social Issues

, , , ,

Yesterday all of the automakers reported April auto sales to great fanfare. GM sales were up 11% over  last year. Their YTD unit sales are up 10%. The MSM has been touting the “strong” auto sales as proof the economy is recovering and consumers are flush with cash again from those non-existent jobs. If auto sales at GM are booming at double digit rates, why did their profit plunge by 14% in the 1st quarter? Inquiring minds want to know. Something doesn’t pass the smell test.

Here is a link to the results GM reported today:

http://media.gm.com/content/dam/Media/gmcom/investor/2013/q1/2013-Q1-Financial-Highlights.pdf

Here are my comments/questions:

  • How pitiful is it that a company with $36.3 billion in sales can only manage a $865 million profit? A 2.4% profit margin is a joke, especially after the American taxpayer ate their debt in their illegal reorganization.
  • If their reported unit sales are up 10%, how did they manage to report 3% less revenue?
  • Even though the MSM is reporting an auto recovery, GM managed to make $139 million less profit than 2012. This couldn’t be due to channel stuffing.
  • Evidently GM is selling more cars for a lot less money. So let me get this straight. GM is stuffing inventory down the throats of its dealers. It is offering massive incentives to move its trucks. It is using Ally Financial to dole out subprime auto loans to 45% of the “purchasers” of their vehicles. And this constitutes an auto recovery.
  • The good old balance sheet tells an interesting story. Even though revenue is falling, Accounts receivable surged by 20% in three months. GM wouldn’t be helping its dealers finance their bloated inventory, would they?
  • The supposedly strong GM has $34 BILLION of pension and benefit liabilities on its books and only $38 billion of equity. Yeah, that will work out just fine.

GM’s results reveals that the MSM bullshit about a strong auto market is just another tired propaganda storyline. The auto sales are being generated by bad loans to deadbeats and huge incentives by the automakers that guarantee a loss on just about every car sold. Sounds like a great business plan.

 

GM Reports First Quarter Net Income of $0.9 Billion

DETROIT – General Motors Co. (NYSE: GM) today announced first quarter net income attributable to common stockholders of $0.9 billion, or $0.58 per fully diluted share. These results include a net loss from special items that reduced net income by $0.2 billion, or $0.09 per fully diluted share.

In the first quarter of 2012, GM’s net income attributable to common stockholders was $1.0 billion, or $0.60 per fully diluted share, including a net loss from special items of $0.6 billion or $0.33 per share.

Net revenue in the first quarter of 2013 was $36.9 billion, compared to $37.8 billion in the first quarter of 2012. Earnings before interest and tax (EBIT) adjusted was $1.8 billion, compared to $2.2 billion the first quarter of 2012. First quarter EBIT-adjusted results for 2013 include the impact of $0.1 billion in restructuring costs.

“The year is off to a solid start as we increased our global share with strong new products that are attracting customers around the world,” said Dan Akerson, GM chairman and CEO. “In addition, we saw progress in Europe thanks to strong cost actions and great vehicles like the Opel Adam and Mokka.”

GM Results Overview (in billions except for per share amounts)

  Q1 2013 Q1 2012
Revenue $36.9    $37.8   
Net income attributable to common stockholders $0.9    $1.0   
Earnings per share (EPS) fully diluted $0.58  $0.60 
Impact of special items on EPS fully diluted $(0.09) $(0.33)
     
EBIT-adjusted $1.8    $2.2   
     
Automotive net cash flow from operating activities $0.5    $2.3   
Adjusted automotive free cash flow $(1.3)   $0.3   

 

Segment Results

Beginning this quarter, the company will report segment revenues and profits based on the geographic region in which a vehicle is sold. Previously, segment results included the impacts of inter-segment sales and profits. Prior year segment results have been reclassified so all information is shown on a comparable basis. Financial results for Chevrolet Europe continue to be recorded in GM International Operations. Consolidated results are unaffected by this change.

  • GM North America reported EBIT-adjusted of $1.4 billion, compared with $1.6 billion in the first quarter of 2012.
  • GM Europe reported an EBIT-adjusted of $(0.2) billion, compared with $(0.3) billion in the first quarter of 2012.
  • GM International Operations reported EBIT-adjusted of $0.5 billion, compared with $0.5 billion in the first quarter of 2012.
  • GM South America broke even on an EBIT-adjusted basis, compared with EBIT-adjusted of $0.2 billion in the first quarter of 2012.
  • GM Financial earnings before tax was $0.2 billion for the quarter, compared to $0.2 billion in the first quarter of 2012.

Cash Flow and Liquidity

For the quarter, automotive cash flow from operating activities was $0.5 billion and automotive free cash flow adjusted was $(1.3) billion. The change in year-over-year cash flow was primarily the result of lower earnings and a series of timing-related items that GM expects to reverse during the balance of the year.

ABSOLUTELY RIDICULOUS MSM HEADLINE OF THE DAY

14 comments

Posted on 30th April 2013 by Administrator in Economy |Politics |Social Issues

, , ,

The MSM mouthpieces continue to spew forth the propaganda of the ruling class. This huge headline on Marketwatch is designed to convince the average dumbass that the government has their act together. The economy is doing so well, we are able to pay down our national debt. This is the biggest load of bullshit shoveled onto the heads of the American mushrooms since Obama said that Obamacare wouldn’t add one cent to the deficit. Let’s go straight to the horse’s mouth. Here is a link to check out the national debt:

http://www.treasurydirect.gov/NP/NPGateway

Here are the facts:

National Debt on September 30, 2012 – $16.066 trillion

National Debt on April 26, 2013 – $16.757 trillion

In less than 7 months your politician leaders in Washington DC have added $691 BILLION to the national debt. We are adding $3.32 BILLION per day to the national debt and the MSM article below is attempting to convince the ignorant dumbasses in this country that the Treasury is paying down debt. They have really bought into the Adolf Hitler Big Lie theory.

By the end of this fiscal year on September 30, 2013, the national debt will have risen by $1.2 trillion. The U.S. Treasury will have issued this much new debt and the Federal Reserve will have purchased most of it because no foreign country in their right mind would purchase it.

The national debt will hit the magical $17 trillion mark sometime in August. The bullshit is so deep you need a shovel and thigh high boots just to get around these days.

 

U.S. to pay down debt for first time in six years

By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) — In another sign of an improving deficit picture, the Treasury on Monday said it expects to pay off debt in the current quarter for the first time in six years.

In a statement, Treasury said it now expects to pay off $35 billion of debt in the April-to-June quarter, compared to an earlier projection, given in February, that it would have to borrow $103 billion.

 
Treasury Secretary Jacob Lew

This will be the first quarter that Treasury has paid off debt since April-to-June period 2007.

The payoff “is emblematic of the turn in budget finances from horrible, to grim, on their way to steadily better,” said Eric Green, global head of rates and foreign-exchange research at TD Securities.

Treasurys on the longer end of the yield curve weakened slightly after the news. The 10-year note (ICAPSD:10_YEAR)  was yield was up about a half a basis point up on the day at 1.668%, while the 30-year bond yield (ICAPSD:30_YEAR)   climbed more than 1 basis point on the day to 2.876%. Read MarketWatch’s bond report.

In a statement, Treasury said the changed projection related to higher receipts and lower outlays, but gave no details. The agency also said it expects to have more cash on hand than was previously assumed.Congress allowed a payroll tax cut to expire at the beginning of the year. This tax hike and continued growth has put more money into the government’s coffers. The sequester, in effect since March, has helped cut outlays.

For the fourth fiscal quarter, which begins in July, the government expects to borrow $223 billion.

This assumes quarter-end cash balances of $75 billion on June 30 and $80 billion on September 30.

The Treasury will announce details of its quarterly refunding on Wednesday. Green said Treasury is expected to hold the refunding auction sizes steady at $32 billion three-year notes, $24 billion of ten-year notes, and $16 billion in 30-year bonds.

“But if there is a surprise, we know where it leans,” Green said.

Over the next two years, the Treasury offering of coupon securities could be $250-$325 billion lower than it has been, Green estimated.

Last week, as a result of the improved outlook for the deficit, the Bipartisan Policy Center pushed back the estimated date that the U.S. might hit its debt ceiling to far as mid-to-late September from the previous estimate of late August to mid-September.

Treasury Secretary Jacob Lew said last week he could not forecast the exact date when Congress has to raise the ceiling to avoid a default.

Republicans in Congress want to use the debt ceiling to seek spending cuts from President Barack Obama.

 

HOW DO WE GIVE $130 MILLION TO SYRIAN REBELS WHEN THE SEQUESTER IS SUPPOSEDLY FORCING US TO FIRE AIR TRAFFIC CONTROLLERS?

17 comments

Posted on 21st April 2013 by Administrator in Economy |Politics |Social Issues

, , , , ,

Inquiring minds want to know. How do we come up with hundreds of millions for Al Queda sympathizer Syrian rebels and $1 billion for new missile defense on the West Coast for the imminent attack by North Korea if the Sequester is gutting our country? By the way, since the Boston Bombing Reality Show began, have you heard a peep about the imminent threat from North Korea? Do you realize you are being played by those in control? Everything spewed at you by politicians and the mainstream media is either a lie or a propaganda message designed to control your emotions, because they know 98% of Americans are incapable of thinking critically.

US prepares $130m military aid package for Syrian rebels

Secretary of state John Kerry expected to announce plans as opposition forces and international allies meet in Istanbul

The US readied a package Saturday of up to $130m in non-lethal military aid to Syrian opposition forces while European countries consider easing an arms embargo, moves that could further pressure the government of President Bashar al-Assad.

US secretary of state John Kerry was expected to announce the plans about the defensive military supplies at a meeting Saturday that was bringing together the Syrian opposition leadership and their main international allies.

The supplies possibly could include body armor, armored vehicles, night vision goggles and advanced communications equipment.

US officials said the details and costs were to be determined at the meeting. They spoke on condition of anonymity because they were not authorized to publicly discuss Kerry’s announcement.

Kerry met with Syrian opposition leader Moaz al-Khatib before the conference began.

In the latest clashes, Syrian troops backed by pro-government gunmen battled rebels Saturday in a strategic area in Homs province near the Lebanese border, according to activists and state media in Damascus, the Syrian capital.

President Barack Obama has said he has no plans to send weapons or give lethal aid to the rebels, despite pressure from Congress and even some administration advisers.

Since February, the US has shipped food and medical supplies directly to the Free Syrian Army. The aid was expanded later to include defensive military equipment. So far, the US has provided an estimated $117m in non-lethal aid to the Syrian opposition, according to the White House.

Britain and France are leading a push to modify the European Union’s arms embargo on Syria to permit weapons transfers to the rebels by the end of next month. The embargo is to expire at the end of May unless it is extended or revised.

Those in favor of the change say there have been no decisions on whether to actually supply the rebels with arms. They argue that allowing such transfers would increase the pressure on Assad. US officials say they support testing this strategy.

Germany and the Netherlands, however, are said to be reluctant to support the step because they fear it would lead to further bloodshed.

Kerry said before leaving Washington that the conference aim was to get the opposition and all prospective donors “on the same page” with how Syria would be governed if and when Assad left power or was toppled.

With Syria’s civil war in its third year, the US and its European and Arab allies are struggling to find ways to stem the violence that, according to the United Nations, has killed more than 70,000 people. Despite international pressure, Assad has managed to retain power far longer than the Obama administration expected.

“We need to change President Assad’s calculation, that is clear,” Kerry told US senators Thursday. He said the Assad government’s survival largely depends on the continued support it gets from Iran, its proxy Hezbollah, and Russia.

“That equation somehow has to change,” Kerry said.

John McCain, one of the top Republicans on the Senate armed services committee, wants US military action, including airstrikes on government aircraft and weapons. But he does not want to send in American soldiers.

He said the steps he recommends would give moderate and secular opposition forces a better chance to succeed without having to depend on extremist groups that are supporting the rebels.

The US is not opposed to other countries arming the rebels, provided there are assurances the weapons do not get to extremist groups that have gained ground in the conflict.

Kerry said that Assad, his inner circle and supporters in Iran and Russia have yet to be persuaded to enter negotiations with the opposition and allow for a political transition.

He said he had not given up on persuading Moscow to reverse its support for Assad.

Kerry planned to meet Russian Foreign Minister Sergey Lavrov next week in Brussels on the sidelines of a Nato-Russia Council meeting.

“My hope is still that the Russians can be constructive,” he said.

UNEMPLOYMENT CLAIMS SKYROCKET – GOVERNMENT BLAMES SEASONAL ADJUSTMENTS

14 comments

Posted on 4th April 2013 by Administrator in Economy |Politics |Social Issues

, ,

The government and MSM are a joke. Every time an atrocious economic report is issued, they immediately attempt to spin it. Today it was bullshit about Easter and seasonal adjustments, blah, blah, blah. If these brilliant Wall Street economists knew about Easter and seasonal adjustments, why did they forecast that claims would fall to 350,000?

If seasonal adjustments are really skewing the numbers higher now, why didn’t the government and MSM tell the ignorant masses that they were skewing the numbers too low for the last three months? Because that didn’t fit their storyline of recovery. The propaganda machine needs you to feel positive and optimistic when reality is kicking you in the teeth.

The United States is in a recession. Companies are not hiring. Companies are firing. Thank Obama and his tax increases and healthcare plan that is sucking the life out of businesses across the land.

U.S. jobless claims climb to four-month high

WASHINGTON (MarketWatch) – The number of people who applied for new unemployment benefits jumped 28,000 to a four-month high of 385,000 in the week ended March 30, the Labor Department said Thursday, but much of the increase likely reflects seasonal quirks related to the Easter holiday and spring break. Economists surveyed by MarketWatch had predicted claims would fall to 350,000 from an unrevised 357,000 in the prior week. The raw claims numbers were virtually identical for both weeks, however, suggesting that the government’s seasonal-adjustment process exaggerated the increase. Still, the spike in claims adds to other recent reports suggesting that the pace of hiring in the U.S. has slowed. Meanwhile, the average of new claims in the last four weeks rose by 11,250 to 354,250 to mark a one-month high. Also, Labor said continuing claims decreased by 8,000 to a seasonally adjusted 3.06 million in the week ended March 23. Continuing claims reflect the number of people already receiving benefits. Initial claims from two weeks ago were unrevised at 357,000, based on more complete data collected at the state level.

EXISISTING HOME SALES HIGHEST SINCE 2009???????????

9 comments

Posted on 21st March 2013 by Administrator in Economy |Politics |Social Issues

, , ,

My friends at the NAR are out with their propaganda report this morning. I saw the headline about the tremendous surge in sales to four year highs. It prompted me to do some fact checking. Here are a few facts:

  • The annualized rate of sales in February 2010 was 5.02 million.
  • The annualized rate of sales in February 2011 was 4.88 million.
  • The annualized rate of sales in February 2012 was 4.52 million.
  • The annualized rate of sales in February 2013 is 4.98 million.

We are supposedly in the midst of a strong housing recovery, with the lowest mortgage rates in history and existing homes sales are trending below 2010 and fractionally above 2011. Does that jive with the bullshit being spewed by the MSM?

The NAR declares that SEASONALLY ADJUSTED sales are up 10.2% over last year. Here is a link to the real data:

http://www.realtor.org/sites/default/files/reports/2013/embargoes/ehs-3-21-gfsdfljkjh/ehs-02-2013-overview-2013-03-21.pdf

It seems the NON-ADJUSTED number was up only 6.3% – what a shocker. It’s amazing how those seasonally adjusted numbers are always higher.

The NAR isn’t touting the fact that the percentage of distressed sales (foreclosures and short sales) jumped from 23% in January to 25% in February. The percentage of investor purchases jumped from 28% in January to 32% in February. Both of these facts are surely a sign of a strong market driven housing recovery. Right?

Let’s look at a few more facts:

  • There were a total of 305,000 homes sold in February in the entire country. Of these sales, 76,000 were distressed sales and 98,000 were to Wall Street investors. That means there were a total of 131,000 NORMAL traditional sales between a willing homeowner and someone who wants to live in that home. Think about that. There are 115 million households in this country and about 13 million households underwater on their mortgage.
  • As a comparison, there were a total of 291,000 homes sold in January and 143,000 of those sales were non-distressed/non-investor sales. That means that REAL non-manipulated home sales DROPPED by 8% in February over January.

These are the facts folks. The housing market is being manipulated by Wall Street to drive prices artificially higher. There is no real housing recovery. Propaganda and MSM spin can’t change the facts. Would the NAR or Larry Yun ever lie to you? It’s Always the Best Time to Buy.

 

« Older Entries