GM earnings far short of forecasts on subprime mortgage woes (CNN)

Detroit Can't get a break, can't get a break, can't get a break....

Look at this:

GM recognized a net loss of $115 million associated with its 49 percent ownership of GMAC, the finance arm that it sold a 51 percent stake in late last year. GMAC announced Wednesday afternoon that it saw a net loss of $910 million in its mortgage business in the quarter, versus net income of $495 million a year earlier.

So GM loses money for two reasons because of the subprime housing crisis - a) people are nto taking money out of their house to buy cars, because there's no house money or it's already out, and b) they own a huge stake in a major housing lender that is now suffering from making apparently stupid loans.

The funny thing here is that when GM sold 49% of GMAC last year, everyone said "OKthey'll get cash now but lose the revenue stream." It turns out that they were actually smart to have taken the money, or they would have multiplied this loss - they actually come out looking smart! They should have sold off the whole thing.