The New York Times reports that the “troubled finance company” known as GMAC is hitting-up Uncle Sam for more, as-yet-unspecified billions. The Gray Lady tells us it’s not a question of “if”, it’s a question of how GMAC and the Treasury can sleaze the deal, so that taxpayers don’t end up owning the company. ‘Cause that would “reignite” the “debate” over the bailouts that have already been given. “GMAC and Treasury Department officials have been locked in negotiations over how to structure the third bailout as it approaches a crucial deadline in early November for shoring up its finances [as a $5.6 billion payment comes due]. The government has injected $12.5 billion into the company and already owns about a 35 percent stake from a broader restructuring of General Motors, its onetime parent.”
The Times seems to forgets the salient fact that the GMAC bailout arrived via an eleventh-hour, Christmas Eve FDIC exemption from banking laws, which allowed GMAC to attach itself to the taxpayer teat. Well, they kinda mention it.
GMAC was one of several firms that sought an emergency conversion into a bank holding company last fall, which qualified it for a host of federal aid programs, including government guarantees of its debt.
To be fair, the paper does point out that GMAC lost $3.9 billion in the last financial quarter. Hey, does anyone remember why GMAC went from GM’s cash cow to a bailout-craving zombie lender and a-rose-by-any-other-name bank called Ally? Something about being up-to-their-eyeballs in the sub-prime meltdown mishegos, methinks. Never mind.
Just for S&Gs, here’s the corporate genesis 411 from formerly GMAC Finance now Ally’s website [sorry, can’t resist]:
We are Ally Bank, built on the foundation of GMAC Financial Services. And with that experience we’ve learned that these times demand change and a new way of doing business. So we’re taking banking in a new direction.
That means talking straight, doing right and being obviously better for our customers.
We’re a bank that values integrity as much as deposits. A bank that will always be open, accountable, and honest. Yes, honest. We won’t deal in half-truths, kindatruths, or truths only buried in fine print. That’s because we don’t have anything to hide. We’re always going to give it to you straight.
Profits they may not have (or may, as they’re using YOUR money to compete), but chutzpah? LOADS. One more factoid: GMAC’s outgoing CEO Alvaro de Molina walked away with $11.6 million. As they sow, so shall they reap. Or is that rape? [thanks to all for the links]