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GMAC Motors Toward Third TARP Trip

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October 27, 2009 – Comments (9)

Enough already.

Today’s Wall St. Journal has a report titled “GMAC Asks for a Fresh Lifeline” by Dan Fitzpatrick and Damian Paletta that states, “The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008…”  This would be in addition to the previous Treasury funds poured into GMAC in Dec 2008 and May 2009.

How many chances are they supposed to get?  Treasury has opted to let CIT fend for themselves, GMAC is poised to get another lifeline.  Where is the consistency from the government? 

If GMAC’s business operations are viable with some restructuring, they’ll be bought or reorganized in bankruptcy.  If they aren’t viable, why on earth should the US Treasury throw good money (that we don’t have) after bad?

This post is a slight edit of what I just sent to my Senators and Congressman.  Those included, " I urge you to apply whatever pressure you can to the Treasury Secretary to stop this outright waste of public money spent propping up a failed business."  Feel free to lift from it if you want to do the same.

9 Comments – Post Your Own

#1) On October 27, 2009 at 10:02 PM, hendrixtrader (< 20) wrote:

The government cant let them fail now, not after the two previous bailouts. If the government lets them fail, then they failed. But if they keep bailing them out and in 5 years GM is back on top, then it was a success, no matter how much money they loaned to them.

 

I blogged about this earlier, there wasnt a lesson learned by the banks or auto industry. All they know now, is that if they f up, the goverment will bail them out. 

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#2) On October 27, 2009 at 10:29 PM, russiangambit (29.49) wrote:

I thought the same when i read it today, -enough already. Do a prepackaged bankruptcy or whatever they do with bankrupt companies these days. CIT has been bankrupt for 2-3 months now and still they haven't filed, but at leat they are not getting anymore of TARP money.

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#3) On October 27, 2009 at 10:38 PM, fmahnke (95.32) wrote:

RD80,

Cudos. on your appeal to Congress.  I wish you the best but fear that BHO will be sure to give them our money if the UAW wants it.

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#4) On October 27, 2009 at 10:41 PM, RVAspeculator (31.13) wrote:

A billion a day keeps the bankruptcy away!

I thought they changed their name to "Ally Bank"

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#5) On October 27, 2009 at 10:50 PM, wolfhounds (28.89) wrote:

In case no one recalls, a week or two ago there was a story that Chrysler Credit would be allowed to go under by 2011. If Gmac business is so bad, why should they be treated differently. GM could become profitable and GMAC may still not be viable if it can't repay Tarp funds. At that point the government owns it or folds it. The cards are stacked in this game against the taxpayer, and we all deserve an explanation.

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#6) On October 27, 2009 at 11:42 PM, rd80 (98.66) wrote:

The comments on the article at WSJ are better than the article.  The only one even close to favorable is from a guy who won a bet on GMAC going back for more TARP.

RVASpeculator is correct - GMAC is Ally bank.  If they get more TARP, Joe Biden can make a speech taking credit for the advertising jobs saved by keeping those commercials running.

wolfhounds - I had forgotten about that.  GMAC/Ally must have better friends than Chrysler Credit.

Thanks for all the comments. 

PS  I should have noted in the blog entry that the authors' source for this is "people familiar with the matter"

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#7) On October 28, 2009 at 12:41 AM, dustybull (< 20) wrote:

Please cut the BS. The headline is misleading......there is no money going towards auto here. I would bet the the drum to beat here will go like this:

1. Fund www.rescapholdingsllc.com, Ally bank and all GMAC Mortgage related LLC's.

2. Continue the unrelenting foreclosure drive and plead assistance to homeowners on the news, but not in reality.

3. Attend foreclosure auctions and buy tracks of inventory properties with government bail out funds at pennies on the dollar.

4. Sit and wait with a fresh new set of books (thak to valuations adjustments), a new look and feel and with a fresh new valuation at rock bottom inventory that over a few years paper profits are going to look astronomical.

 Capitalism......the old boy network style.....got to love it -not!

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#8) On October 28, 2009 at 4:43 AM, KamranatUCLA (29.20) wrote:

f***K This!!!!

Enough is enough!!!! they make crappy cars that are gas guzzlers. Japanese companies employ more American workers than these "American" companies. 90% of their stuff is made in damn Mexico and Canada.

They should have been bankrupt years and years ago but stupid investors let them survive...now the stupid government. You can't teach and old dog new tricks and you can't pump money in a dead company.

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#9) On October 28, 2009 at 8:49 AM, dbjella (< 20) wrote:

I will never buy another new or used GM vehicle ever.   I pulled my money from their bank.  I know GM is really "scared" of me, but I am sure there are many out there like me.

I am voting "no" to bailouts with my only option left my wallet. 

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