Think about this for a minute.......it is fucking amazing........GM has a line on their balance sheet called Deferred Long Term Asset Charges. The latest number as of June 30, 2007 was $32,337,000,000. The WSJ reports
General Motors Corp. will take a $39 billion, noncash charge to write down deferred-tax credits, a signal that it expects to continue to struggle financially despite significant restructuring and cost cutting in the past two years. A balance sheet is supposed to list assets on one side and liabilities on the other. An untroubled company has twice as many assets as liabilities. The difference is shareholders equity. In the case of GM as of June 30, 2007, assets were less than liabilities by about $3 1/2 Billion. Unless, I failed accounting, the writeoff of this asset, takes shareholders equity into the hole by $37 1/2 Billion. (GM will partially offset the charge with a gain of more than $5 billion related to the sale of its Allison Transmission unit.) The numbers are so huge that they are frightening.
In the financial sector word is getting around that financial institutions have $1 Trillion of bad loans to write off. I just shake my head. A lot of people made a lot of money doing something that most of us don't understand. Maybe they didn't either.
General Motors Corp. will take a $39 billion, noncash charge to write down deferred-tax credits, a signal that it expects to continue to struggle financially despite significant restructuring and cost cutting in the past two years. A balance sheet is supposed to list assets on one side and liabilities on the other. An untroubled company has twice as many assets as liabilities. The difference is shareholders equity. In the case of GM as of June 30, 2007, assets were less than liabilities by about $3 1/2 Billion. Unless, I failed accounting, the writeoff of this asset, takes shareholders equity into the hole by $37 1/2 Billion. (GM will partially offset the charge with a gain of more than $5 billion related to the sale of its Allison Transmission unit.) The numbers are so huge that they are frightening.
In the financial sector word is getting around that financial institutions have $1 Trillion of bad loans to write off. I just shake my head. A lot of people made a lot of money doing something that most of us don't understand. Maybe they didn't either.
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