Ace of Spades HQ

December 30, 2008

The Endless Bailout
— 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: Ace at 09:07 AM | Comments (34)
Post contains 185 words, total size 1 kb.

1 Remember when GMAC was the profitable, sensible component of GM? That was only like 18 months ago.

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)

3 WAF

Posted by: eman at December 30, 2008 09:21 AM (A0fZ7)

4 I am drafting a letter to Citibank that basically says, "You can consider my wife's student loan paid in full."

Posted by: SalvucciFumbles at December 30, 2008 09:25 AM (KCs9s)

5 I think we should start a boycott of all bailed out companies.

Posted by: jcp at December 30, 2008 09:28 AM (DHNp4)

6 A friend of mine got an 80/20 wraparound mortgage from GMAC back in about 2004. She was getting tenured and her payments (combined) were well within her means. She's already paid off the 10-year 20% wrap-around. So, it worked for her. Of course, at that time they were still properly processing loans. She had to jump through all the hoops she would have in 1985 except for the 80/20 part. Also, she bought a house adequate to the needs (then and in the future) for herself and her daughter and within her means.

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)

8 Hey Ace weren't you a big supporter of the bailout in the first place? It's cunts like you that have enabled this clusterfuck to exist in the first place.

Posted by: DavidX at December 30, 2008 09:39 AM (OMV1G)

9 The bailout is first and foremost a way to stuff the pockets of the super-rich.

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)

10 Sheesh! Man, I could have bought ten houses and flipped them back in the nineties. I could have become a slumlord. Could have been somebody!

Posted by: eman at December 30, 2008 09:40 AM (A0fZ7)

11 The whole bailout situation seems like Bugs Bunny in "Racketeer Rabbit" where he keeps popping up around the table going "How 'bout me Boss?" and taking all of Edward G Robinson's loot.

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)

13 Poor ace.

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)

14 Der derrr duh derr duh! Derrrr!

Posted by: joe the douchebag at December 30, 2008 09:47 AM (Do9Q1)

15 I second that, jcp. Start with the banks. That's easy. Just did it myself. Went to the tiny weeny "We'll be goddamned if we'll allow ourselves to be nationalized" bank. They we're oh so happy to see my money. Big Boys never blinked an eye after I closed the account and told 'em why.

Ingrates.

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)

17 Blame poor people!

OK...

Posted by: A. Weasel at December 30, 2008 09:53 AM (bqcfE)

18 I love cock!

Posted by: joe the drive-by troll at December 30, 2008 09:57 AM (Do9Q1)

19 Our trolls are broken

Posted by: toby928 at December 30, 2008 09:59 AM (PD1tk)

20 Don't feel to sad for me. While I am the accidental result of sperm on a toilet seat, I have found purpose in life. My little outbursts here have given my life meaning. This spastic stupidity that I drop here like so much angry diarrhea is my way of keeping it together and avoiding suicide by humping the third rail at the subway station.

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.

http://tinyurl.com/3v9rfa

Posted by: markytom at December 30, 2008 10:15 AM (PQq/V)

22 When does the New York Times become a bank holding company?

Posted by: Alana at December 30, 2008 10:43 AM (JE2zV)

23 Ace you fuckwit. I'd like to take this opportunity to introduce your chickens to their roost.

Posted by: DavidX at December 30, 2008 11:02 AM (OMV1G)

24 "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."

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)

25 Just like the homeowner rescue program: 50% of the defaulters rescued are defaulting again only 6 months later. Let's loan them more money!

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)

26 They deserve a car...no, two cars!

Posted by: PJ at December 30, 2008 02:20 PM (fyFnu)

27 The tone of this report is problematic, comrade. Perhaps you should edit it for clarity. Just sayin'.

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