Bailout Watch 579: GMAC To Score $3.5b More

Edward Niedermeyer
by Edward Niedermeyer

The underlying cause of GMAC’s failure was no different than so many other American financial institutions: giant bets on risky mortgages at the height of a real estate bubble. And though that error alone would have qualified GMAC for a bailout rescue along with the other failed banks, The WSJ reports that the ongoing support for GMAC is “reflects the troubled company’s importance to the revival of the auto industry.” And man, it had better be important. The GMAC bailout has been one of our least-favorite of the season, rewarding poor practices in auto and mortgage lending, and exposing taxpayers to inordinate risk. But, as TTAC warned back in the pre-bailout days, once the camel gets a nose into the tent, good luck getting it out. And so, GMAC will be receiving another $3.8b in TARP support, on top of the $12.5b it has already received. As a result, the US taxpayer’s stake in GMAC is expected to rise above the current 35 percent stake, just in time for more write-downs planned for the next week. The cash injection is said to prime GMAC for a profitable Q1 2010, erasing some giant losses in the bank’s ResCap mortgage unit. And of course the move will help GMAC continue to underwrite the leases that Chrysler and GM so desperately need, but can’t afford due to plummeting resales. GMAC’s bailout often doesn’t get marked up in the auto industry bailout tally, but at over $16b so far, it’s one of the crucial pieces keeping the zombie automakers shambling along. Now, about repayment…

Edward Niedermeyer
Edward Niedermeyer

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  • Accs Accs on Dec 31, 2009

    HMmmmm, GM blames their thousands of issues.... on ANYTHING other than their own fault. When gas was high.. and their sales tanked... oh its the customer who's fault it is that they didnt buy their cars. Heck, every problem theyve had has been blamed on the customer... going back 30yrs... never mind the shitty interiors... or the execs who havent checked out a recent car since the Olds Cutless Supreme. As for as Toyota goes... They know how to make top selling cars. They know how to use platforms to benefit multiple vehicles of various sizes for any market on the globe. They also know how to use their factories to produce multiple vehicles.. i.e flezxible factories. They have whole books produced about their system for making cars... and mgt. They also as recently ... produce boring as shit cars, with a man lineup consisting of SuVS / CUVS. They have also hidden issues.. Pushed the Prius as the hybrid holy gral .. Their marketing dept.. has t be sme of the best paid fuckers.... PERIOD. But even the are running into some STIFF issues with: the Camry (and the sludge), the Tundra (with the gate, frame and build issues related to new San Antonio plant), they also have issues with the control boxes and pedals on everything on the Camry platform... All is not shiny and roses for Toyota... but Id still prefer them over GM. But... that dosnt mean Id buy a Toyota.. They too.. have falen behind for what I want.... in a vehicle, besies all of the corporate issues..

  • Robert.Walter Robert.Walter on Dec 31, 2009

    GM should, post-haste, find out what lobbying organizations GMAC has, and put these on their payroll! (Oops, I'm almost sorry to make this joke because I think the zomboids at GM would actually take this seriously ...) Happy new year everybody!

  • DangerousDave DangerousDave on Dec 31, 2009

    On the Ally website their moto is "Its your money, not ours." Damn Right! and I want it back!

  • Micanichi Micanichi on Jan 01, 2010

    But I didn't know I could have a real pony...

    • John Fritz John Fritz on Jan 02, 2010

      If I see that commercial one more fucking time, I will Elvis my television. Given the opportunity, I would bitch slap that Alec Baldwin-looking motherfucker back into the Bronze Age.