Connect the Dots: Oil Price Soars, GM Stock Plummets

What is it with Friday? Every time I think I've crossed the finish line, the bad news arrives like an uninvited guest. Of course, it's not all about me. It's about an entire industry facing cataclysmic change. Bloomberg reports: "Oil rose $11.33 to an all-time high $139.12 a barrel during trading. Crude oil surged more than $10 a barrel to a record as the dollar weakened after the U.S. unemployment rate grew the most in two decades and Morgan Stanley said prices may reach $150 within a month." As far as GM's concerned, causation don't 't make no never mind. The bottom line: the automaker's stock price ended the day at $16.22, a 33-year low. Automotive News [sub] attempts to put a brave face on it, spinning the loss as part of the larger stock market drop. No matter how you parse it, GM's still a high-cost, cash-burning, truck-heavy manufacturer leaking red ink from every pore of its North American ops, with no escape plan (although its CEO and top brass are well-protected). As this blog from the Wall Street Journal indicates, the Street is waking up to GM's death spiral, and it ain't that pretty at all. "By contrast, GM — which seemed to have covered itself well by selling assets before the buyout markets skidded to a halt last year — could end up with less than $1 billion by 2010, thanks to a combination of cash-draining losses and debt repayments, according to Lehman Brothers Holdings. Even if it tapped bank credit lines, it would by then have less on hand than the $10 billion or so analysts reckon it needs to support its everyday business."