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The Last Bailout Of 2009: US Takes Majority Ownership Of GMAC
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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Lost another one to dietech.
Lets not be too hasty - still another 24 hours
to go.
[when given a choice.]
+1
Hahahhaaaa!
I vote this the best call of 2009!
By a whisker!
Barney Frank and friends in the neighborhood have guaranteed future bailouts:
http://www.bloomberg.com/apps/news?pid=20601039&sid=a48c8UpUMxKQ
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.
"... 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? :-)
The stroll into Twilight Zone continues. Wonder how long they can hold these markets together with bailing wire and chewing gum.....
Buy, buy buy!!!
(Its all ball bearings these days!!)
(Fletchism of the day).
ball bearings. it's all about ball bearings...
LOL
I can finally get that Sedan DeVille I've had my eye on.
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
Tyler, I have not seen you report on this
http://www.bloomberg.com/apps/news?pid=20601208&sid=aaLwI2SKYQJg
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.
Is there any deal that involves government preference that these bozos can't get in on?
Just park this lemon next to the other ones. I guess failure is not an option. Print you whores, print.
make mine a "Che Guevara" bumber sticker... Viva le resistance!
Now lets get some tariffs on foreign manufacturing and GM and it's finance unit will be fine.
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.
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.
make a better cost competitive car an I'll buy it. Bottom line, dawg.
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.
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...
so, when did you get laid off?
+1
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.
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?
The new bumper sticker
"Honk if I'm paying off YOUR debt!"
Nice! Beep Beep
"Quick! Look over there!"
(remove GM from the Dow)
"OK, everything is fine people, please disperse!"
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.
+ 100
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.
How about tapping into Shanghai GM (SGM) for some bailout of Domestic GM?
http://chinabystander.wordpress.com/2009/12/05/shanghai-automotive-embra...
omfg...
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!!
http://www.youtube.com/watch?v=L61HG_P-hq0
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.
Details
http://www.gata.org/node/8192
Go get'em!
And we saved GM. . . why?
you guys want to see how idiotic some portfolio managers on the Street.com 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.
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.
I know the auto industry well and I have no sympathy for it. IMO, it was a deliberate self inflicted wound.
#177827
this is zerohedge.com, not huffingtonpost.com. 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.
"...worthless third world dirt bags..."
That's no way to talk about GS! And dear god if GM represents our "prime industrial firms"...
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?
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.
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).
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.
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?
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.
-MobBarley
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.
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.
+100
Since consumer spending makes up 70% of the American economy, I presume by the line of argument you put forth here that you have no problem with the bank bailouts, then.
I hear that GM will be giving out a free toaster with every car purchase as a sign of their appreciation.... which is more than what the banks give.
the third world dirt bags will own our sorry asses soon if the hysteria continues!!
I'm waiting for Harley Davidson to go on the public dole before I call the top/bottom/end whatever.
I want the Ultra Classic Electra Glide CVO (Custom Vehicle Operations) with the Screaming Eagle engine modifications and the sweet heart loan, to be paid back over 20 years at 0% interest, zero down and a $5,000 credit for "accessories".
http://www.harley-davidson.com/wcm/Content/Pages/2009_Motorcycles/2009_Motorcycles.jsp?test=true&locale=en_US&bmLocale=en_US#/model/flhtcuse
It's only a matter of time before H-D's corporate survival is considered a national security issue and the first blank check is issued. It's only a matter of time.
Oh, and a two month (super hot) rental babe for the back seat, so I can make my annual trek to the Daytona biker fest starting Feb 26th.
http://www.officialbikeweek.com/
Does this officially make us the United American Socialist States (U-ASS)?
I don't think so. Just regular capitalism, with a little government intervention. Not abnormal thing in the last 400 years of capitalism...
"Free rear spoiler stickers of Marx, Engels and Lenin included with every purchase of a CTS-V."
Cool... I want Lenin, please!
You only get Lenin if you've first tried Jean Jaures or Eduard Bernstein and they pealed off too easily.
Having spent ( wasted now? ) 25 years of my life at the dealership level with Cadillac, which i turned my back on, ( as well as GM especially ) in 2001, you should know that the dealers are funded directly through GMAC..
No GMAC = no GM. GM is GMAC, not the other way around.
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.
Our missionWe'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.
Put simply, we want to find the pain points of traditional banking and improve them. Consider our 24/7 customer service. We think it's reasonable that a customer should be able to reach us and talk to a person anytime they want.
Doing rightThat means no monthly fees, no minimum deposits, and no minimum balances. It means developing new products that give you more options, like our No Penalty CD that lets you withdraw your money if you need to. And it means having rates that are always among the most competitive in the country.
We want your money to work hard for you. So we'll send you Sleeping Money alerts when we think you could be earning more. And we offer daily compounded interest on all Ally accounts to grow your money faster. It's just the right thing to do.
From the financial sector I do not follow GMAC generally. But, in general conversations with those that do, it seem that GMAC, has been sliced and diced since the first TARP infusions, like Ally bank for example. So, I am not really sure what is left of GMAC.
We know GMAC still provides auto loans, which should be secured debt. But, what I heard from Treasury was the infusion was to offset losses in their real estate loan book. The point being, to find out what is really going on would require a lot of digging and phone calls to NY and DC. What if the infusion is being used to offset Auto loan losses. Now this would be interesting.
Perhaps someone who works for GMAC can comment?
Mark Beck
I'm worried that this one just might give Karl Denninger the big coronary.
Karl: I do respect and admire your work greatly. Please do not let this give you a heart attack. It's going to be an even longer battle.
If the GMAC deal doesn't do Karl in, the horrific $ 4 trillion bank bailout tucked away in Bwaney's 1200 page financial reform legislation will. GMAC is a pimple on a rat's ass compared to what Bwaney's been up to.
From Associated Press:
"SAN CLEMENTE, Calif. – A man savagely killed a dog, ran naked through a tennis club and poured hot coffee on his head before he was finally arrested early Wednesday, Orange County sheriff's deputies said."
Rumor has it the man is a Ford dealer.
It sounds like what an Australian aborigine hears when he is told what the Shrub/Obama treasury team did to our economy.
Rear spoilers are the accoutrements of the proliteriat!
Henceforth all rear spoilers are to be removed in solidarity with the revolution!
Trabant or death!
Life, Trabant, Death!
Can I upgrade that to the Deluxe Lil' Joe Stalin spinners?
What really is the big deal, the zero-cash deals are small subsidies compared to the $60b bonuses paid by god's favorite Wall Street firm. It is not even a small fraction of the $8k subsidiy to first time house buyers. Add a zero to your children's tax bills, that will do it folks. Get ready for election year Stim 2 and QE 1.x, have not seen any ZH news on those, but it will be here soon cuz we got to pay Wall Street bonuses next year, right?
I was watching cnbc, I know, I know...I promise I don't do it that often. However, the headline for this in the late afternoon was: good news from GMAC.
My comment on the press release:
GMAC is saving US taxpayers money! Yeah! GMAC is filing for 30% less than what was originally expected. When reports first came out two days ago, it was said that GMAC would need about $3.5 billion. Now, after more consideration, GMAC will only need $3.5 billion. Yes, that is the same number—so where’s the savings? That’s what the media is trying to sell us on—a savings?
Market Watch is reporting 3.79 billion.
Now that the taxpayers are majority owners, it must be time to throw it into bankrupcy.
PS: Forget the spoilers, I want a solar car!
I'm so shocked! Their business model seems so bulletproof...
Borrow money from US Treasury,paying 9% dividend,
Loan money to car buyer @ 0% interest for years and years,
Sit back and watch profits roll in!
And to think it only took another $3.8 billion for USG to gain total control of this money-making enterprise! Aren't all of you M&A types green with envy.....
/sarc
And $300 million cash for appliance clunkers appear to be in the works for early next year ...
Possible bumper stickers...I brake for Obama...Bailouts on Board...I bailed out GM and all i got was this lousy hyper-inflationary depression...GM-Got Money?....GM-Good Marxist...GMAC-GOOD MARXIST ACCEPT CAPITAL...the new GM model for 2010-The GM Pillager,The Chevy Cavalier(about taking your tax dollars and pissing them away),The New GMC truck for those economic collapse food riots with carrying capacity for your food stores ammo and whats left of your belongings,with new moltov cocktail resistent paint.
Pig in a Python
this one is easy the thwart: don't buy american cars.
I prefer the don't buy any car. Hell don't buy anything!
So when does the Amtrak-GM merger take place?
IMWTK
Ally/GMAC must be doing a good job: they are paying depositors some of the best rates around.
So now we have the new and improved GMAC. The next generation of GSE joining the ranks of Fannie and Freddie, existing on permanent life support compliments of the U.S. taxpayer generosity.
Hey TD,
Isn't GMAC one your sponsors via Ally Bank? I believe having seen their banner here...
Not for long....
GMAC is the finance arm, guys, not the car company.
The finance arm can't earn money lending at losses (surprise), so the gov is going to step in to MAKE SURE that car prices stayed fluffed up by easy credit.
People keep asking how the inflation will get into the economy - this is how they intend to do it.
GMAC will write knowingly bad loans just as FNM/FRE are gobbling up the same type of mortgage paper.
The delusional idiots WILL NOT ACCEPT that their stupid FIRE economy was a complete piece of shit.
Everything Bama does is intended to try to get us BACK to a system that was inherently unsustainable. The taxpayer will lose money on these loans and the Fed will buy the bonds needed for the gov to source debt to cover them.
Dont worry. These are tactics gleaned from the Harvard bizness collegium. You learn a lot at Harvard and you bloggers dont seem to understand how finance works. This is Harvard economics 201. I recall once the Harvard Business Professor told us that if you create a financial instrument , then take the 3rd derivative, swap it for a CDO basket yielding the LIBOR, and it loses money, then call one of your classmates in Washington DC for a loan to make you whole. Your classmate will then take a hammer and beat the money out of the taxpayor. Folks, you just cant learn these high concepts at a regular school. This knowledge costs 60k/year. And we learned lots lots more strategies...
Drive your new GMAC machine into your FNM-FRE house. Now there's Capitalism and the natural order of Schumpeter's Creative Destruction NOT at work. "NOT" being the new ETF symbol that tracks the equity evaporation of these nouveau phony GSEs. This is a perfect recipe for the FASCISM solution that Dodd and Frank have cooked up so we can stay on meds while we get benefited up. Since Deng ZhouPing China is a FASCIST state not Communist as well. I think the definition of Fascism would be more practically the illusion of Capitalism run by the State directing Corporations or otherwise State entities while being able to change the rules of engagement at State discretion with lobbyist engineering, eliminating individual freedoms of course. We have HSA, TSA to get you all in the mood..terror and all that as necessary. Why a little terror changed the focus from the healthcare insurance company home run, didn't it?....
The only solution is to export Quality Intellectual Property.... Engineering like was done after WWII..build things that put the maker out of the business of planned obsolescence which always feeds back to a planned obsolescent society. The reverse is also true. When you opt to put yourself out of a business you have efficientized, then you find two other businesses to do the same. The tougher the battle, the sweeter the victory.
Well, they now OWN two of the BIG 3.(play on words,from the past).
And, they own the Homes of 80% of America.............
They are just moving into taking over the Health Care Industry, 1/6th of the Economy.
And next up............
Cap & Crap....................
If this isn't Fascism, tell me what it is.
Sure as Hades is not anything heretofore seen on US Shores, and designated as legal, or our form of Governance.