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Heh. You might've thought they didn't deserve the last bail out. GMAC is 49% owned by GM and 51% owned by private equity firm Cerberus Capital Management. Congratulations, America - you just bailed out people who made unsound business decisions....and not many blinked an eyelash. Hell, the unwashed masses probably aren't even aware of what just happened. It is momentous. It's a testament to how F'd up America's values have become. Imagine Cerberus as an American in the trenches in Germany. Oh noes!!! It's cold and wet and they are shooting at me! I need a bailout!!! Oh noes!!!!
Merry Christmas, Cerberus shareholders. Your company makes mistakes and we, the American tax payers, take the ******* hit on it..
This is UNGODLY STUPID.
Picture the sky. It is bright, but there are clouds on the horizon. A slight chill begins to creep into the evening mist; every day the sun sets a bit earlier. Jack Frost begins to paint tiny curlicues on your window - a window from which you spy a young child outside selling lemonade from a home-made stand.
You go outside and notice the child has at least 10 customers standing in line. "OMG!!! WTF!!!!" you think to yourself! "IF only I had this stand! I'd polish up the business, sell it off and make brazillions!" "Hey kid! "How much for the stand?"
"7.4 billion."
"Sold!"
Now, the economy sours. Those curlicues become sheets of pancake-thick ice. The storms gather, blowing fierce winds over the sidewalk and your customer base drindles into only the most diehard lemon lovers. The kid has moved on to selling Cocoa from another stand. He's racking up brazillions, while you are bemoaning your horrible decision. "OMG!!! WTF!! WHAT DO I DO?!!" "Do I sink more of my money in this business and wait for times to get better?" "Do I switch to Cocoa, too?" "OMG!!! I got all this money tied up in lemons and sugar!! THIS SUCKS!!!" "I know! I'll ask Mom and Dad for money!" "YEAH!!!!!"
Mom and Dad, -"Ermm... son....., you've got money in your piggy bank."
Kid - "That's designated for other projects."
Mom and Dad - "What other projects?"
Kid - "Shhhh.......That's Top Secret....Can't discuss."
Mom and Dad - "Oh, well, that's just fine, son, just fine. Here's 7 billion dollars and let's go ahead and buy most of your stock in your failing business."
Kid, - "Yeah, you better, otherwise there will be no market for lemons or sugar. MUAHAHAHAHAHAAH!!!!!"
Cerberus took a calculated risk less than 2 years ago, failed to read/foresee the market and FAILED AT THEIR GAMBLE. This is NO DIFFERENT than paying for someone's gambling losses, except it's on a larger scale.
I can guarantee you that the money given to GMAC will NOT be used to finance car loans... almost all of it will be "loaned" to GM/Chrysler so that the company can survive just a little bit longer.... you can't sell a car to someone who isn't going to pay it back and nobody who can pay it back will buy a car.. so GM will still flounder and need more cash to pay workers for producing nothing... they can't get any other money... except from GMAC.. lucky them... wink, wink..
another fly in the GMAC ointment:
Merkin, who is chairman of GMAC LLC, is named in the lawsuit brought by NYU, along with his Gabriel Capital LP fund and Ariel Fund Ltd. GMAC is the finance business owned by General Motors Corp and private equity firm Cerberus Capital Management LP.
"The Funds 'feeding' money to Madoff, including Ariel, made a conscious effort to conceal Madoff's involvement from their own investors," the NYU lawsuit said. "This concealment was a requirement dictated by Madoff, which was agreed to by Merkin and other 'feeder' funds."
the plot thickens with the CEO of GMAC tied to madoff in the giant ponzi scheme.....
this month, Deutsche Bank analyst Rod Lache put a price target of $0 on all of GM, which would include the auto maker’s stake in GMAC. And the reasons behind the conversion to bank-holding company status speak to the other criteria (excluding violation of ethics or laws, of course).
GMAC was hit by three forces in the past two years: the crash in home prices that hit ResCap; the slowdown of the auto industry; and the credit crunch. It all has combined to create a nightmare that probably won’t end quickly, even with government funds. GMAC is still in the midst of a highly contested $38 billion debt exchange offer. (no word on that yet and the deadline passed on friday so not a very good sign).
GMAC had spent months bolstering ResCap, only to be told by Moody’s that ResCap would never be able to stand on its own. ResCap has been a black hole eating up GMAC’s money. GMAC helped it retire $1.6 billion of debt this year, paid down another $1.2 billion and then resorted to forgiving $683 million of ResCap debt this month just to help it avoid default.
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GMAC gets $5 billion from Treasury - Dec. 29, 2008
The government also broadened its $17.4 billion bailout of the auto industry, saying it would lend an additional $1 billion to GM so it could invest in GMAC as the financing company reorganizes. This moves helps the financing arm meet the conditions of becoming a bank holding company.
GMAC gets $5 billion from Treasury - Dec. 29, 2008
The government also broadened its $17.4 billion bailout of the auto industry, saying it would lend an additional $1 billion to GM so it could invest in GMAC as the financing company reorganizes. This moves helps the financing arm meet the conditions of becoming a bank holding company.
now congress has to ask for more of the bailout money because they have used all of the original money up. GMAC gets 5 billion (and 1 billion directly) but keep in mind that GMAC lost 7.9 billion in the last 4 quarters. GM is getting 9.4 billion by february and another 4 billion after that.
just so people understand how this money is being totally wasted it should be noted that GMAC, which had 26,700 employees as of Dec. 31, 2007, had about $161 billion of unsecured and secured debt as of Sept. 30, according to a filing last month. this is definitely throwing money down the rathole. i think every single bailout has been a disaster for this country and we still have more bailouts to come. think of how much labor goes into the 6 billion that GMAC is getting because that is your money that they are wasting!
Last edited by floridasandy; 12-30-2008 at 03:18 AM..
I think the experience of these past few years and months has solidified a definition of bankers: those seeking to control the mass resource flows for personal use while actually producing nothing.
It also reflects the perversion of "American" values.
I'll be your mirror (reflect who you are).
Nation-building and decline of civilization have come full circle in US history now.
Welcome to the back-end.
It kinda stinks, doesn't it.
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