On the eve of its centennial year, General Motors is making history anew. Just not the kind of history it's hoping for. GM's Hummer-size $39 billion loss in the third quarter is the largest ever in the auto industry and the second-largest overall in corporate America. (Time Warner's $45.5 billion write-down in 2002 still holds the prize for profitlessness.)

But even before GM issued what one Wall Street analyst described as "very ugly" financial results Wednesday, the automaker's top brass were spinning in high gear. The bulk of that loss—$37.4 billion—is only on paper, they said; it's simply an arcane accounting entry that we wouldn't understand. "You'd have to have a Ph.D. in accounting to fully understand it," GM Chairman Rick Wagoner (once the automaker's CFO) assured radio host Paul W. Smith, during Detroit's popular morning drive-time show on WJR-AM. "As far as cash flow, future outlook, ability to invest, it doesn't have any impact at all." Moments later, on CNBC Wagoner went even further: "I wouldn't read anything into it as to the prospects for the company."

Wagoner had better hope his new models gain more traction than his spin control. GM's historic losses led to a massive sell-off on Wall Street, as analysts downgraded its shares and its stock price plunged 6.1 percent. But this was not just panic selling. There's reason to worry about GM's slow turning. For starters, that massive accounting charge is based, in part, on the belief that profits aren't probable in the near future at GM. The automaker has lost so much money in the last three years—in excess of $10 billion—that it had built up huge tax credits it could eventually use to offset taxes on profits.

But if losses are expected to continue to pile up for the foreseeable future, accounting rules require a company to write off those tax credits. What's more, once you strip away the accounting charge, GM's operations—the manufacturing, financing and car-selling stuff— actually lost $1.6 billion. That's about eight times worse than Wall Street expected. So despite Wagoner's best efforts to write off the write-off, the Street viewed it as an ominous sign. "They basically said, 'We're not expecting to be profitable anytime in the near future'," said auto analyst Brad Rubin of BNP Paribas in New York. "That's a troubling statement."

So when will GM start making money? Wagoner and his execs won't say. But they did reveal that GM burned through another $2.5 billion in cash in the third quarter, as its three-year slog through the financial wilderness grinds on. "We ran in the red," GM CFO Fritz Henderson told analysts Wednesday. "The results are just not acceptable." And the road ahead is bleak. Overall American auto sales are stalling thanks to the housing slump (pickup truck sales ride shotgun with home sales), the credit crisis and near-$100 barrel oil, which is driving gas prices back above $3 a gallon. This year U.S. auto sales are expected to fall to near a 10-year low. Next year is expected to be even worse. And GM, like the rest of Detroit, remains dependent on big rigs like pickups and SUVs that will bear the brunt of the downturn.

Talk about a buzz kill. It seems like just yesterday that GM was finally beginning to roll. It cut a four-year deal with the United Auto Workers union last month that will eventually save it billions. New models like the redesigned Cadillac CTS and Chevy Malibu are getting raves. Even Buick—grandpa's car line—has a hot seller among a slightly younger crowd with the stylish Enclave crossover utility vehicle. GM's good mojo seemed to hit cruising gear when it wrested back the global sales crown from Toyota last month. (It's neck and neck: GM leads with 7.06 million vehicles sold worldwide so far this year to Toyota's 7.05 million.)