GMAC… again… Tax payer now majority stake holder


The infusion will bolster lending at GMAC as it absorbs $3.8 billion in new pretax charges and decides what to do with its loss-plagued home mortgage unit, according to statements from the agency and the company yesterday. The aid comes on top of about $13.5 billion previously earmarked for GMAC, which regulators have said is crucial to the U.S. auto industry. […] The U.S. stake will rise to 56.3 percent from 35.4 percent. The U.S. also controls General Motors, GMAC’s former parent, whose stake shrinks to 6.7 percent.

The following are quotes that should likely elicit a “what the fuck!” from you if you understand the irony:

GMAC was the only company of 19 that underwent stress tests that wasn’t able to raise capital in the private sector, Williams said. Still, the Treasury said the aid was less than originally planned because restructurings at GM and Chrysler caused less disruption at GMAC than regulators expected. Tim Price, a partner at Cerberus, didn’t return a call for comment. […] There will be individual asset sales in the near future but whether some larger concept evolves is a matter of time,” Carpenter said. “We think ResCap and the mortgage business is stable and that we don’t have to do anything crazy. We have no urgency.

So aid was less than originally planned? A cynic would say that GMAC is not done asking for capital as they have just done. As far as having no urgency to do something “crazy” is concerned: of course you have no urgency, the government is shoveling public funds your way.

Here is the moral of the story.

Billionaire investors, astute funds managers, competent hedge fund managers and lowly retail investors are all saying they are not interested in buying GMAC stock. They look at the company, they don’t like what they see and they don’t buy the company stock.

So, apparently, Obama thinks that his administration is smarter than all the more competent investors in the market place and decrees that your money will be given to GMAC whether you like it or not.

The government is now majority owner in GMAC as it is majority owner in GM which was the original owner of GMAC and all this with your money. The money you and me and everyone else thought would be employed in infrastructure improvement, education or financial reform is now being given to a failing finance company that was created in order to sustain GM but that turned out to be one of the largest lenders to the real estate bubble and that is today creaking under the weight of its failed bets.

Obama thinks GMAC will turn out ok and against taxpayers’ wishes is giving them just under $4Billion Dollars on top of the $13Billion that had already been given a few months ago.

Can we yet call this corporatism? Can we call it Fascism?

War is dialed in latest by 2015 but, likely, by 2013


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