We recently spotted this interesting quote in a financial news release: “Direct comparisons are not necessarily applicable. You can make some judgments in terms of trends …”
The quote was not from a professional politician, but from the CEO of General Motors Corp., explaining why a $1.2 billion loss last quarter was in fact “good” news for his company. If the budget deficit for 2010 is less than last year’s $1.4 trillion, we may well hear the same thing from professional politicians in the near future.
We may well hear the same type of pronouncement concerning the unemployment rate in 2010. It might be only, say, 9.1 percent instead of today’s 10.2 percent, with predictions of future favorable reductions. Now, if you have a job in 2010 and are making good money, you might favorably receive such predictions concerning unemployment. But if you still are out of work, such a position might fall on deaf ears.
Our first question for the General Motors CEO is: Why are direct comparisons not possible? If your accounting system is an “apples and oranges” system, what use is it to us? After all, since the bailout, we consider ourselves and all the other taxpayers your investors. Without the availability of direct comparisons, why then should we believe in your “judgments in terms of trends”? Let us know, Mr. CEO, when you start making money. That’s really the fundamental issue.
We also note that in the statement by the CEO, he said that the biggest contributor to profits last quarter was from pickup trucks. Hmmm? Does that sound like a wise course to plot future business for automobile manufacturers?
