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.

One-Uping America

GM Announced yesterday that it's electric hybrid car, the Volt, will be in production in 2010 with a on-the-road target date for November 2010. Such a car would significantly cut down on emissions. Of course, you have to plug it in which causes a problem insofar as coal consumption is then necessarily higher.

Then Honda came over and basically threw sand in GM's face by announcing they were putting a hydrogen car , the FCX Clarity, on the market in the US next year. It's only emission--good ol' H2O.

Basically, Honda just put GM on blast. And they won that round.

It makes it that much harder to buy American when they're so far behind.

There Goes the Neighborhood

UAW strikes GM.

And the excitement has begun!