December 30, 2008
— Ace Gabe sends a post by email -- damn his job.
The New York Times reports "the Treasury Department has agreed to take a stake of $5 billion in GMAC, the auto lending company, and agreed to lend $1 billion to General Motors to help GMAC reorganize itself as a bank holding company."
The Detroit Free Press adds "the money for the injection would come from the $700 billion financial industry bailout, and that GMAC would have to meet restrictions on executive pay as part of the deal."
And finally, the Wall Street Journal chimes in:
The move represents the second tranche of government aid that redounds to the benefit of giant private-equity firm Cerberus Capital Management, which owns Chrysler and, until these recent moves, a majority stake in GMAC. John Snow, a top player at Cerberus, was the Bush Administration's Treasury secretary before Henry Paulson.
In bailing out GMAC, Treasury officials aren't just stabilizing an auto-finance company but a major player in the housing market's boom and bust. GMAC played a big role in purchasing riskier adjustable-rate mortgages.
Posted by: tachyonshuggy at December 30, 2008 09:16 AM (TXp3z)
I've noticed a turn in the reporting on the economy today. CNBC did a year-end review of the crises and basically called it over, everything's okay now and we can all get back in the pool. This is just in time for Obama's ascent into the heavens.
Oh joy, but how will they keep reporting sunshine and roses when the economy continues to tank?
"This is no recession and there will be no recovery"-anon
Posted by: Mighty Mick at December 30, 2008 09:19 AM (kOQDM)
Posted by: eman at December 30, 2008 09:21 AM (A0fZ7)
Posted by: SalvucciFumbles at December 30, 2008 09:25 AM (KCs9s)
Posted by: jcp at December 30, 2008 09:28 AM (DHNp4)
It's not just the lenders and originators to blame.
Posted by: JorgXMcKie at December 30, 2008 09:35 AM (iMgQD)
Posted by: Rocks at December 30, 2008 09:39 AM (Q1lie)
Posted by: DavidX at December 30, 2008 09:39 AM (OMV1G)
I'm surprised you little republicans are mad.
Can we can blame poor people?
Posted by: joe the plumber at December 30, 2008 09:40 AM (5ERBK)
Posted by: eman at December 30, 2008 09:40 AM (A0fZ7)
Posted by: Rocks at December 30, 2008 09:41 AM (Q1lie)
According to an article on MSNBC:
In response, GMAC said Tuesday that it will resume offering automotive financing to customers with credit scores as low as 621, eliminating restrictions put in place two months ago that mandated a minimum score of 700.
So now that they have free money they can start the process of lowering standards for loans more and more until they get right back into the hole they dug before. Great.
Posted by: markytom at December 30, 2008 09:43 AM (PQq/V)
As a genetically incorruptible republican you were supposed to reject any bailout. But then you discovered, as any thinking hominid would, that without intervention to replace a collapse in private investment (market failure!), the whole shithouse economy would collapse.
And now! Well, these contradictions are confusing. What can a fat, inane conservative do?
Blame poor people!
Posted by: joe the plumber at December 30, 2008 09:44 AM (5ERBK)
Posted by: joe the douchebag at December 30, 2008 09:47 AM (Do9Q1)
Posted by: Derak at December 30, 2008 09:47 AM (9/9tb)
I think we should start a boycott of all bailed out companies.
People already subconciously boycotted them for designing shitty products and making bad business decisions. That is why the government is bailing them out in the first place.
These companies need to be allowed to die. If there is still a need for the products they produce, more competitive companies will survive. If there is no need for these products, these companies needed to die anyway. Survival of the fittest.
If we applied this bailout ideology 100 years ago, we would still be subsidizing the production of carriages, and horse whips.
Are we all going to get free cars out of this deal?
Posted by: Lemmiwinks at December 30, 2008 09:49 AM (CiVat)
Posted by: A. Weasel at December 30, 2008 09:53 AM (bqcfE)
Posted by: joe the drive-by troll at December 30, 2008 09:57 AM (Do9Q1)
Posted by: toby928 at December 30, 2008 09:59 AM (PD1tk)
Posted by: joe the plumber at December 30, 2008 10:12 AM (kIjlp)
Maybe this is why the US government is giving away so much free money these days - Paulson scared Congress into it:
International Monetary Fund Managing Director Dominique Strauss-Kahn warned Wednesday of economy-related riots and unrest in various global markets if the financial crisis is not addressed and lower-income households are hurt by credit constraints and rising unemployment.
U.S. Sen. James Inhofe, R-Okla., and U.S. Rep. Brad Sherman, D-Calif., both said U.S. Treasury Secretary Henry Paulson brought up a worst-case scenario as he pushed for the Wall Street bailout in September. Paulson, former Goldman Sachs CEO, said that might even require a declaration of martial law, the two noted.
Posted by: markytom at December 30, 2008 10:15 AM (PQq/V)
Posted by: Alana at December 30, 2008 10:43 AM (JE2zV)
Posted by: DavidX at December 30, 2008 11:02 AM (OMV1G)
Just like the homeowner rescue program: 50% of the defaulters rescued are defaulting again only 6 months later. Let's loan them more money!
Posted by: PJ at December 30, 2008 11:12 AM (fyFnu)
And you know, maybe they should buy a car too! Make it a high priced low mileage SUV, because we all know gas prices are going to stay low forever.
Posted by: shibumi at December 30, 2008 11:38 AM (tZB/c)
Posted by: PJ at December 30, 2008 02:20 PM (fyFnu)
Posted by: The People at December 30, 2008 03:50 PM (ZSEm1)
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