| Thursday Nov 10, 2005 Fear and Greed Issue #689 By Andrew Snyder
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http://www.agora-inc.com/reports/TRZ/WTRZFA32/ Hot off the wire… General Motors needs to send its accountants back to math class. It looks like somebody forgot to carry the one and move the decimal point over a spot. Shares of GM, already at their lowest point in over a decade, are plunging once again today after the company announced it must to restate its earnings for 2001. Because of an accounting error, GM overstated its profits for the year by as much as $400 million. Oops. The SEC already has its eye on GM because of the way the company records its credit from suppliers. Now, with millions of dollars going into the wrong column, the SEC is going to be watching GM like a fat kid watches a freshly baked cake. Both situations almost always result in a mess. As if news of an earnings restatement wasn’t bad enough, GM’s bonds fell deeper into “junk” status yesterday. The good folks over at Fitch Ratings downgraded GM’s bond rating to “single-B”. The bond experts feel GM’s debt is in “highly speculative” territory. GM’s former parts division, Delphi, is currently in the restructuring process in bankruptcy court. If things don’t go well, GM could be forced to pay as much as US$12 billion in benefits to its former Delphi employees. That would make a bad situation even worse. Currently GM is sitting on about US$20 billion in cash. It may have to part with much of it just to get out of its current dilemma. That wouldn’t leave much to build and sell cars. It’s not going to be a fun time in Detroit. Crunching the numbers… It is another big day for Econo-Data. Earlier this morning, the Commerce Department reported that this nation’s trade deficit expanded to US$66.1 billion in September. Much of that imbalance comes thanks to a record outlay of US$23.8 billion to purchase foreign oil. These are the first figures to hit the Street since Hurricanes Katrina and Rita brought oil production in the South to a halt. It is probably a good thing that President Bush is focusing on trade relations with Asia this week. This country’s deficit with China jumped by 8.9% in September to a record US$20.1 billion. That gives us an annual deficit of approximately US$200 billion. Those figures are not going to do much to bolster Bush’s support. Critics are going to be all over his trade policies once this year’s final deficit tally is calculated. As of now, it is expected to be somewhere around US$700 billion. In a separate report, the Labor Department reported that 326,000 workers filed for unemployment for the first time last week. That numbers is 2,000 claims higher than the week before. It is also higher than the 320,000 employment experts were expected to see. Making money… Top Tankers (TOPT:NASDAQ) is once again the top newsmaker today, but its share price isn’t fairing so sweet today. Before the opening bell, TOPT announced its third quarter financial results. While net income rose by more than US$1.4 million, earnings per share dropped from US$0.42 to US$0.28 thanks to a share dilution almost twice as high as last year. The earnings report revealed today was certainly very attractive, but some investors were hoping for more. They should be happy with what they got. After all, TOPT did spend a lot of money expanding its armada of tankers. So far this year, the company has added nine ships to its fleet. All of them have the potential to add a lot to TOPT’s bottom line. As I write, shares of the company are selling for US$14.08, 1.6% less than yesterday’s final price. Have a great day. Andrew Snyder  | 
