Before I go further, let me say that I have not opined on the GM stock price recently. I called it a "speculation" that I would avoid. I don't do wildcat oil drilling in Texas either, for much the same reason.

That's not to say that the price or short-term success would not go higher; it's just that I won't be around. What comes to mind is the TV commercial for a financial services company that mocks the lottery system as being the retirement plan of too many people.

I trade in instruments I understand, and I don't have the time or patience needed to get into the rest. There are maybe 50,000 instruments in the world worthy of trading " to some people. To me, I have time (some days) to watch a basket of 100. If I get an assistant, I'll bump that number up to 250, but not 2,500 or 25,000.

Traders need to focus on what they feel the can succeed at. If your reach is further than your grasp, you'll fail. I call it the ‘man swimming with gold bricks in both hands' syndrome. In shark infested waters nonetheless.

In any event, Prof. Morici has this to say about GM:

"Today, GM reported a second quarter loss of $3.179 billion dollar, or $5.62 per share.

Deducting expenses for restructuring, GM scored an operating profit $1.153 billion or 2.04 per share. GM's North American operations continued to lose money but those loses were cut to $85 million form $1.1 billion a year ago.

While the profit on ordinary operations is good news that will please investors, GM's situation remains worrisome.

During the first half of 2006, GM sold fewer cars than in 2005; these sales were at better prices and closer to those commanded by Toyota, significantly improving GM's net.

However, GM made more cars this year than last year, and faces the tough task of clearing out a lot of inventory.

..........................Jan - June 2006..............Jan - June 2005
Production...............2,347,312.......................2,296,518
Sales.......................2,037,136.......................2,321,696
Difference..................310,176..........................(25,176)

GM will likely have to cut prices, through incentives, and mark down the value of its inventory. Marking down inventory for clearance sales could well throw GM into the red in the third or fourth quarters.

This illustrates GM's rock and hard place. If GM makes only what it can sell at prices approaching those charged by Toyota, GM's vehicle development costs are spread across too few vehicles and it loses money. If it makes enough cars to cover its vehicle development costs, it must lower prices too much to sell what it makes, and it loses money anyway.

With a $40 dollar an hour labor cost disadvantage vis-a-vis its Japanese rivals producing in North America, GM remains a troubled company. Only by cutting its labor costs can GM make and sell a volume of cars that permit it to cover both its production and vehicle development costs.

Any merger or joint venture that fails to address the labor cost issue will not make this company viable.

The failure of Rick Wagoner and the GM Board to clearly articulate that challenge indicates a crisis in management and corporate governance."

Rick Wagoner seems to be a good guy. The fact he holds a degree in Economics and a Harvard MBA does not impress me. Some time ago I suggested that if these degrees were in engineering or psychology from a school in or near Tokyo, I might take note.

I only care about a company's financial structure, earnings and revenue growth, operating margins, and so forth. General Motors has been having its lunch eaten for many years. Maybe Wagoner is an effective turnaround manager, and maybe he's not.

For the GM worker's sake, I hope he is. GM offers good jobs. Maybe the cost of those jobs is too high in today's world.

But isn't that a problem in America today: shaft the worker; the appetite of private equity is an endless pit. GM is to them just a place for fees and charges to be made. To these bloodsuckers, preying on the GM's and Ford's is just part of the industrial death and renewal cycle that has gone on since well before the time of buggy whips.

Mom & Pop should just stay away. Life's too short to worry over the problems of others. Yes, it can be entertaining -- even a good MBA school case study -- to muse over issues such as GM presents. I'm not looking to the market to do anything more than trade in prices I can get my head around.