The Last Bailout Of 2009: US Takes Majority Ownership Of GMAC

Tyler Durden's picture

From WaPo

The federal government said Wednesday it will take majority control of
the troubled auto lender GMAC, providing another $3.8 billion in aid to
the company, which has been unable to raise from private investors the
money it needs to staunch its losses.

GMAC, which already has
taken $12.5 billion in direct federal aid along with other forms of
government support, is the largest lender to General Motors and
Chrysler dealerships and to their auto-buying customers.

Prepare for "no cash until 2099" offers at a GM dealer near you. Free rear spoiler stickers of Marx, Engels and Lenin included with every purchase of a CTS-V.

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bugs_'s picture

Lost another one to dietech.

Lets not be too hasty - still another 24 hours

to go.

Harbourcity's picture

Unable to raise from private investors...

[when given a choice.] 


Anonymous's picture

I vote this the best call of 2009!

By a whisker!

digalert's picture

Barney Frank and friends in the neighborhood have guaranteed future bailouts:

Rainman's picture

A $ 4 trillion bailout kicker fund for the bankrupt banks should fix everything. This is the window to the nightmare scenario we will see in 2010.......blank checks to banks  and revolution of the masses.

Andrei Vyshinsky's picture

"... blank checks to banks and revolution of the masses..."

Arec we to understand this to be the time for which we've all been waiting? :-)

jbc77's picture

The stroll into Twilight Zone continues. Wonder how long they can hold these markets together with bailing wire and chewing gum.....

Cindy_Dies_In_The_End's picture

Buy, buy buy!!!


(Its all ball bearings these days!!)


(Fletchism of the day).

The Rock's picture

ball bearings.  it's all about ball bearings...



Anonymous's picture

I can finally get that Sedan DeVille I've had my eye on.

Anonymouse's picture

Well that depends.  Don't you know that pricing on cars will now be means-tested?  Just bring a copy of your 1040 to the dealer and we will let you know the price you will pay

Louise1's picture

Tyler, I have not seen you report on this

Taxpayers Help Goldman Reach Height of Profit in New Skyscraper

Dec. 21 (Bloomberg) -- In the first six months of 2010, about 6,000 employees of Goldman Sachs Group Inc. will take a break from their spreadsheets and move across the southern tip of Manhattan to a new 43-story, steel-and-glass skyscraper.

The building was a bargain -- and not just because the final cost is expected to be $200 million less than the $2.3 billion price the company had estimated when construction began in November 2005. Goldman Sachs also benefited from the government’s determination to avoid losing jobs in lower Manhattan after the Sept. 11, 2001, terrorist attacks.

Anonymous's picture

Is there any deal that involves government preference that these bozos can't get in on?

johngaltfla's picture

Just park this lemon next to the other ones. I guess failure is not an option. Print you whores, print.

duckweed's picture

make mine a "Che Guevara" bumber sticker... Viva le resistance!

Segestan's picture

Now lets get some tariffs on foreign manufacturing and GM and it's finance unit will be fine.

docj's picture

Care to guess how many Americans - as in, in the US - work for "foreign" manufacturers like Toyota and Honda?

So your plan is to punish them for, I suppose, a poor choice of employer while rewarding the systematic manufacture of crappy cars over the coarse of decades by the UAW and craptacular management at GM?

Yeah, that'll show 'em.

Anonymous's picture

Stupid ignorant asshole. How many of those new foreign plants were and are funded by state tax dollars. How many American pensioners are kept alive by the big 3. How many Korean and Japanese auto designers vacation or spend a dime here in the US. We are all part of the virtuous cycle wheel of consumer capatism. One way trade with Japan, Mexico and now china has broken enough spokes on the wheel that it is now warped and careening out of control ... We are under the illusion of motion as we collapse. You are part of it docj !. There are plenty of great American cars you fuck. Youvthink youvare immune from the collapse of the big 3 ?... Howz a fucking $15 hour factory job for millions affect your business...

Nikki says buy American made whenever u can. Support your neighbor, not a foreigner.

wackyquacker's picture

make a better cost competitive car an I'll buy it. Bottom line, dawg.

Abu Morpheus's picture

Forgive me, but I'm not sure if your post is meant to be sarcasm.  If so, well done.  If not, wow, I'm not sure where to begin.

The defeat of the Big 3 (or rather 2 of the 3, since Ford is still fighting) is the result of years of poor decisions by the automakers, their unions, and the US Federal Government.  The automakers and the unions cheer on the government for protection from competition, the government provides the aid, and it either fails or backfires.  If you doubt it please analyze the results of the import quotas imposed during the Reagan Administration, which directly resulted in a huge improvement in the quality of imports from Asia that US automakers were unable to match for many years, and also directly led to the creation of Lexus and Infinity, two of the more successful brands in the US.

The oft-heard assertion that there are many great American cars on the market now is largely irrelevant.  The only measure of greatness that matters is the desire of American consumers to purchase these models at prevailing prices.  Quite simply, if GM and Chrysler want to succeed, then they must produce a better product, as judged by the consumer, sell it at a cheaper price, and do this at a lower cost than their competition.  It really is just that easy.

Anonymous's picture

When the industry you work in gets undercut by a foreign company with none of the burdens the big 3 have (pensions, unions) and support from not only the foreign taxpayers (medical care, currency manipulation) but from the taxpayers of Alabama, Tenessee etc... let's see just how cost competitive your products are... The $1300 in an American big 3 car that is union health care and pension costs would make for a better car.... No doubt. How would that deletion ripple through the medical industry I wonder ??.. Oh, right. I don't give a shit about anyone but myself. As long as I can get my cheap Chinese made shit, why should I care about 30 million unemployed. They don't cost me anything to support...

Get a clue people. Price and cost have deeper meanings than what is printed on a sticker...

T-888's picture

so, when did you get laid off?

docj's picture

Again, where to start...

the burdens the big 3 have (pensions, unions)

And who's fault is that?

support from not only the foreign taxpayers (medical care, currency manipulation)

Really?  So foreign taxpayers are footing the bill for medical coverage for US employees?  Wow, those are some seriously brass anonymous stones you have claiming that I'm ignorant.

but from the taxpayers of Alabama, Tenessee etc

Oh, and GM and Chrysler didn't get those breaks over the decades?  Really?

How would that deletion ripple through the medical industry I wonder ??

Oh don't worry.  Healthcare is a "right" remember.  Lord Barack will take care of that problem and make everyone equally noncompetitive.

As long as I can get my cheap Chinese made shit

I'm sure the people I know all over the south and midwest who are making great products at solid wages would take exception to that characterization - but hey, why break up a good talking point, eh Internet Tough Guy?

Get a clue people.

Kettle?  Meet pot.

Price and cost have deeper meanings than what is printed on a sticker..

Tell that to the UAW and their craptacular management.

Yeah, and PS - I actually did pretty much ignore your previous fact-free rant as you were already taken to the woodshead over it and I didn't want to get flagged 15-yards for piling on.

wackyquacker's picture

quality stinks, period. The $1300 would go for a better made car? The damage is done- critical mass has been reached; many people aren't going to risk what hard-earned pennies they have for $20K+ worth of junk. Fool me once......


What, and the "junk 3" don't source components from the Sino's?

Anonymous's picture

The new bumper sticker

"Honk if I'm paying off YOUR debt!"

The Rock's picture

"Quick! Look over there!"

(remove GM from the Dow)

"OK, everything is fine people, please disperse!"

Rainman's picture

These slippery creepy bastards are jamming it to the sugarplummed sheeple during the Holly Jolly Holidays. Blank check to FNM/FRE on Xmas eve. Then another $3.8B to GMAC for some New Year kicker laughs.

You'd think after a whole year of government-induced fiscal insanity, they'd at least give us a week off before next year's round of insanity commences.

ToNYC's picture

He's just doing the job they put him there to do. He's the master of magic/misdirection. His speeches say one thing while he loads the boat to bail out the double bubble crowd. When there's no more there there, he'll be found out to be just the economically-illiterate community organizer that he so blessedly is, beholden to likes of Geithner and the studied Professor from Princeton. Of course by then we'll be up that creek without the paddle we just threw overboard to the bankers to beat their hasty escape, when we could have spent each dollar carefully to see if it grew job one, like incentivize small business where it all comes from and exporting Quality to the developing world. We had prosperity after WWII until JFK. Vietnam sent us through 1966-82, when the beloved saint of Wall Street started the Grand Sham of outsourcing America down the planned obsolescence road sold to you by Ron Reagan's favorite sponsor GE and the other Generals..ran aground in 87-89 with S&Ls first taste of phony paper and then the liquidity taste of LTCM in 98 , pushed up by Y2K and internet pet.coms until the final of the double bubble of the housing piggy bank...There is no Triple Bubble...Start over. Try selling Quality this time; it still works.

It's either that or serving our Chinese masters who hold our debt or worse for all if we don't man up and pay for this continuing fiasco.


ozziindaus's picture

How about tapping into Shanghai GM (SGM) for some bailout of Domestic GM?

Haywood Jablowme's picture
If you are one of the lucky first of 5000 buyers to take advantage of these great terms, GM will not only throw in a couple of Karl Marx bumper stickers but 5 BRAND SPANKIN' NEW SHAMWOWS to help you with that next auto detailing so you can show off that new GM ride of yours at the next car show held at the local Walmart parking lot on that hot August night!



Anonymous's picture

Join the consumer movement that is SWEEPING THE NATION right now!!

---MOVE YOUR MONEY!!!!!!!!!!!!!!!!!

MOVE your money away from the criminal banking cartels and to the ethical and unleveraged community banks that have actually EARNED your business!

STOP the banking Oligarch's and their lobbyist army from stealing YOUR money and robbing our children's futures!!!

This is BRILLIANT and has been headlines for the last day on Huff Po and other site--- A must see----

Share it with everyone you know and care about!!

Anonymous's picture

Hey! ZH and all on this list, GATA is asking for publicity on their lawsuit against the Fed about the Fed's manipulation of the gold price, suppression scheme and complicity of the CB's, Govs, et al.


Go get'em!

Ned Zeppelin's picture

And we saved GM. . . why?

monopoly's picture

you guys want to see how idiotic some portfolio managers on the are. Check this out. Makes me want to spit.

Don Dion Obama Is Long GMAC 12/30/2009 5:16 PM EST

To Poilin, The news that our president will take majority control of GMAC is very important to the many surviving family-owned GM and Chrysler dealerships in cities and towns across America. These businesses rely on GMAC for their inventory financing and end financing. Many times, GMAC is their only source. The auto industry is recovering but still needs our help. I continue to favor Ford (F) as the best play on the automotive industry recovery.

Segestan's picture

Wow... America has sent billions and billions in aid and knowhow to worthless third world dirt bags , no one cries commie then, but let the American government attempt to save one of its prime industrial firms and everyone cries like a hungry child.

ozziindaus's picture

I know the auto industry well and I have no sympathy for it. IMO, it was a deliberate self inflicted wound.


Anonymous's picture

this is, not maybe you should look to the latter to find a more sympathetic audience to your communist rhetoric. unless you haven't noticed, people around here are more of the "common sense" type as opposed to the "ignorant bliss utopian print more money" type.

Clampit's picture

"...worthless third world dirt bags..."

That's no way to talk about GS! And dear god if GM represents our "prime industrial firms"... 

SteveNYC's picture

While I conceptually agree with your comment, many of us on this board also likely send money, personally, every month to said "third world dirt bags". I feel for my fellow man, especially those less fortunate than I.

I think the human race is on a backward track until we start to look after our own. Crikey, animals are capable of it, are not we?

KevinB's picture

If a substantial fraction of the money we sent to African countries actually went to help the people, I'd agree. But how much of it goes to buy friggin' air forces and jeeps with .50 cals mounted on them, so that warlords and power hungry generals can slaughter their opposition - often including women and children? Rwanda, Darfur, Congo - need I go one? Or, of course, those same dollars end up in numbered Swiss accounts.

The continued donation of aid to Africa in the belief it's helping the children is the triumph of hope over experience.

SteveNYC's picture

Some truth in that, but that is purely dependent on who your money goes to and how it gets there. When you have seen evidence of the money actually getting there and actually having an impact on lives, the outlook is not so pessimistic.

But yes, there are many cases of what you mention (go back to the Mobutus and Mugabes of the world, of course).

trav777's picture

this is the entire problem.

You can't solve problems by throwing money at them.  Africa periodically starves because they lack the ability to feed themselves.  Now, many are TOTALLY dependent upon food aid and have no incentive whatsoever to actually try to grow their own.

I watched a docu on TV the other day about this S. African school and they were complaining about how they have to walk 3 mi for water.  I appear to be the only one who can say "build a fucking pipe, then."

The reason the west is the way it is is because our people who go to schools saw water miles away and said shit how can we get this water over here so we don't have to walk all day with buckets on our heads.  And then they solved the problems.

White farms in Rhodesia did not magically bestow their wealth upon the farmers, who showed up on the continent with next to nothing.  There was not some secret spell or incantation that the white man knew that he concealed by trickery from the natives.  It wasn't a conjob to buy the land from locals anymore than the injuns should complain about the price they sold Manhattan for.  Nobody should be surprised that once the land is reapportioned to the natives by a racist government that its worth goes back to what it was when the natives occupied it - zero.

delacroix's picture

prime industrial firms?  GM has been a stinking turd for years. my 2006 truck, has a pushrod engine, that was designed in the early 80's. why innovate, when we can masturbate?

Anonymous's picture

I'd like to take you to task on that. Newer is not always better. Any guitarist and most bass players know this well.
Nothing can touch the sound of good old TUBES in an amplifier, and while you'd shun tubes in a not-so flat screen tv mounted on your wall, you'd not want a guitar amp without them. The pushrod engine makes a flat wide torque curve across the rpm range that a new fangled overhead cam 4 valve per cylinder just cannot do. Extensive computer modeling has revealed many secrets about this process, but the long and short of it is that if you want a nice torque response in your engine you go with pushrods. If you want wide open top end screaming power you go with 4 overhead cams and 4 valves per cylinder.

You think there's something better but you don't understand what you got. Your 2006 truck _should_ have a pushrod engine or it'll drive like a honky little manual civic with a funky 'torque peak' at 2600 rpm that'll drive you nuts.


trav777's picture

The valve control system does not affect torque.  Torque is determined by the engine tuning.  Pushrods operate the overhead valves by use of cam lobes, just like OHC engines do.

OHC engines are now superior in every respect given the variable timing systems currently in place.

Valve overlap, timing, duration, and lift are what dictate the torque curve of an engine.  The reason OHC came into use was because it enabled a higher power output for a given size engine.  But, prior to VTEC, there was no way to adjust timing, lift, or duration, so those engines were tuned to produce more torque at a higher RPM via increasing valve overlap, lift, and advancing timing...but the configuration that produces more torque at high RPMs is the opposite of what produces more torque at low RPMs.  At high RPM, you want high valve overlap, long duration, and high lift.  At low RPM, the opposite.

OHC is a lighter valvetrain, which can support higher RPMs than a rod system due to lower inertia.

Your 2006 truck should have a fully variable timing system...this will enable it to maximize torque at any RPM.  The very latest systems can instantaneously decrease valve overlap to increase torque response at low end, and can vary all of the other parameters in real time in response to what optimizes torque at any given RPM.

ToNYC's picture

So Mob got rich by shorting Honda and Toyota, and long GM and Chrysler? The solvent millionaire next door drives a Honda. The whiner's got an Escalade.