Friday, August 1, 2008

The Great Disconnect of 2008: Oil Profits Soar While Car Companies Lose

In the same week we get three pieces of information that don't seem to mesh.

First, we're told that Exxon's Second-Quarter earnings set a record. And some record it was. Not only did Exxon surpass its own previous (staggering) profits, but it was the biggest quarterly profit for a corporation in the history of the world. EVER.

Then we're told that auto sales plunged in July. Ford's sales went down a staggering 14.9%.

Finally, today, GM announces that it posted a $15.5 BILLION loss for it's second quarter.

So, riddle me this, Batman--if the car companies can't sell cars how are the oil companies making money hand over fist?

I know the answer, I'm not stupid. (Oil prices being as they are drove up profit. Not to mention that just because people aren't buying new cars doesn't mean they aren't driving.) But it just seems somewhat ironic that the news comes out in the same day. Oil profits soar while domestic car companies are swirling around the S pipe at the bottom of the toilet.

I used to think the oil companies and the car companies were in cahoots. Now I just think the oil companies have everyone by the proverbial scrotum. Or in this case, aptly-put, over a barrel.



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