By on October 28, 2009

What's it all about Alfie? (courtesy caradvice.com.au).

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]

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15 Comments on “Bailout Watch 560: Feds Set to Bail Out, Nationalize GMAC...”


  • avatar
    GS650G

    Did they run that parting gift by Feinburg before Molina sailed away on his yacht? I thought no more big paydays for TARPed companies.

    Since we all have seen how great the Feds are at running financial institutions like Fannie and Freddie we The Workers have total confidence of the glorious days ahead. Besides, what’s a few more billion run off the presses anyway?

  • avatar
    autonut

    Sickening. you can’t even lift 11 mils in $100 bills it is so heavy.

  • avatar
    jthorner

    I suppose they could just merge it into AIG. You know, keep all the trash in one dumpster.

  • avatar
    NickR

    The pit is bottomless.

  • avatar
    mtypex

    Cerberus owns GMAC, right? More bailouts for the connected private equity people.

  • avatar
    jschaef481

    How much more evidence is required to demonstrate that the concentration of wealth and power is bad for a free society? The unholy alliance of Big Business and Big Gummint that exists in DC these days will be ruinous to our republic.

  • avatar

    Wow!
    I saw the commercials and thought, “What a good idea!”.
    But had No idea Ally was actually GMAC.

    What a freaking shame!

  • avatar
    BigFire

    So that’s who Ally Bank were… I remember seeing a couple of commercial and quit a few spam e-mail from them.

  • avatar
    segfault

    I wonder if GMAC’s failing to attract additional investors, after the stress test, might have had something to do with Cerberus’ “it’s a private company, we don’t have to disclose anything to you, Mr. Prospective Investor” attitude.

  • avatar
    jkross22

    Looks like GMAC is in the paper shredder business. They’re doing a bang up job shredding every dollar the tax payer is GIVING them.

    Well, I guess Timmy G. needs to do a few more things before getting a job with Goldman Sachs. We all know the Tim type. He’s the guy that throws everyone else’s towels in the pool.

  • avatar
    essen

    Remind me, why aren’t we letting this go CH11? It’s not because of manufacturing jobs.

  • avatar
    Mark

    Ally Bank has started advertising heavily in Canada offering extremely high deposit rates because they are obviously desperate for funds.

    I know they are related to GMAC, but the average person in Canada wouldn’t because Ally’s website only indicates in the fine print they are a product of the ResMor Trust Company and it’s only once you dig deep through the ResMor website that you find out that ResMor Trust Company is actually a subsidiary of GMAC

    That makes this line from their website even funnier – “At Ally, we don’t believe in hiding behind fine print, sneaky disclaimers or annoying asterisks. We’ll give it to you straight”

    Yeah right – straight into bankruptcy!

  • avatar
    stuki

    And the twin pillars of Wall Street welfare queens and unionized labor holding up our current sad excuse for a country, continue to make sure we pay them the tribute they feel they are due. Bloody shame we’re clear out of planets those of us somewhat higher up the moral and intellectual ladders could bolt to, leaving this riffraff to starve to death on their own bailing each other out.

  • avatar
    tpandw

    essen: According to the WSJ article on this mess, the government’s decision to bail out (for the third time!) GMAC ‘reflects the troubled company’s importance to the revival of the auto industry.’ So in a way it is about manufacturing jobs. That’s why this whole bailout thing (and this isn’t a political comment–the bailouts began with Bush) was such a slippery slope. Once the feds started bailing out failing auto companies and those companies which support them it became nearly impossible to quit. The only hope is that eventually the market will recover enough for them at least to break even, but I’m afraid that until then the bailouts will continue.

  • avatar
    essen

    tpandw, I hear what you’re saying but money is fungible. Let a responsible lender step in.


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