GM...

...is 'friar tucked'. Hooray!!!

I tracked the GM share price for a while in 2005 and could never work out why anyone would want to invest in the auto maker as there was so much going against the business. If I shorted stocks (I don't) this would have been constantly in my top 10 shorters for the last 5 years.

GM is a microcosm of many of the problems faced by many economies at present. It operates on the never-never and urgently needs radical reform. The sooner it gets some harsh medicine, the better. It's 10 years overdue. Don't get me wrong, there are some good bits to GM, but they are dragged down (and drastically outnumbered) by the bad bits.

One to keep an eye on. I'm hoping Fiat takes GM Europe and wields the axe big time. That gives the business a fighting chance of succeeding.

Would the real Barclays please stand up?

I don't really like commenting on day-to-day news as I subscribe to the view that most of it is noise that distracts from what is really going on. Why bother wasting your time and effort when it doesn't really matter?

For example, who cares if the FTSE goes up 1% one day due to 'reason x' only to fall 2% the next due to 'reason y'. All that matters is what happens in the long term. So why bother trying to understand 'reason x' when it is just the opinion of some random journalist?

But the story of Barclay's profits is an interesting example of the current economic situation. Robert Peston did a piece on it in his blog yesterday. The numbers are totally barmy!

It is clear as mud what is going on with Barclays. They haven't taken any bailout money (yet!) but have probably secured some of the assets with the BoE, but that's not really clear either at present.

They announced £6.1bn of profits yesterday at a time when most of the competition are suffering either heavy losses or total collapse. Impressive - you'd have to make 3,050,000,000 ironing boards to generate that much profit. The equivalent of 50 ironing boards for every person in the UK!

But the profits suggest Barclays should be valued at 5-10 times their current share price (the price earnings ratio is something like 1.3 compared with an average around 10). But they're not, suggesting the market has doubts about how 'real' their earnings really are. So something doesn't stack up. 'No smoke without fire' springs to mind...

But what really confuses me are the assets held by Barclays. They've gone up from £1,227bn to £2,053bn in the last year. So they hold the equivalent of 205 billion ironing boards of stock - that's a BIG warehouse! Or the equivalent of 3,400 ironing boards per UK person. That's a big number...

But this is at a time when assets have generally lost value - but the profits suggest their value has gone up. What are these magical assets? I realise they have been boosted by the aquisition of some of (collapsed) Lehman Brothers, but it still does not make sense. There just is no transparency...

It's mad. But we'll have to wait for the history books to be written to know how this story finishes...