The dire straits of GM’s record $39 billion loss caused it to stock trading on the world’s financial markets this morning. When it resumed, it was down more than 13%.

The $39 billion third quarter by GM is the second-worst quarterly net loss in U.S. corporate history under generally accepted accounting principles, GM attributed most of the third-quarter loss to a $38.6 billion non cash charge related to accumulated deferred tax credits in the U.S., Canada and Germany.   Accounting rules require companies to write down the value of such credits if they have scant prospects for a return to profitability in the near term.

The problems don’t stop there.

According to GM executives, they have only enough cash on-hand to get them through the end of the year - that is only 1 1/2 months.  The seriousness of this situation is that over 2,000 car dealerships, across the country could be forced to close. In addition, GM employees may be asked to made sacrifices just to keep their jobs. One idea is to cut wages or even 401 contributions from the company.

Things are so bad, that the GM executives are in discussions with Pelosi and Congress for emergency help. It is rumored that GM is looking for a 25 billion bridge loan to get through this crisis.  GM had already asked, and been approved for an emergency cash injection by the government, but the money has yet to be received.

It is not a very good day for the U.S economy.  Besides the GM news, the jobs market reports was devastating.  More than 250,000 Americans lost their job in October alone. That is more than 1.2 million for the year. The unemployment rate is at a 14 year high - at 6.5%. In September, that percentage was 6.1%.

However, the stock market (Dow Jones Industrials) is actually up 100 points this morning - go figure!

Is there any way to stop the hemorrhaging? If the government does not step in and help GM, the resulting domino effect could put the United States in it’s worst economical position ever!

Financial experts are expecting the economic downturn to continue into 2009  -  panic could start anyday!