I just can't let this one go.
Surprise, surprise, surprise, GMAC, the troubled former credit arm of General Motors, which has already sucked down 12.5 Billion in taxpayer dollars is back asking for more. GMAC is critical to the ongoing operations of Government Motors comprising the former GM and Chrysler. (GM And Chrysler bailout money not included)
The companies former commercial real estate unit, Capmark filed for bankruptcy protection on Sunday. Meanwhile, the losses continue.
"Yet another argument against those who say we “made money” on TARP because Goldman, AmEx and a few others bought back their warrants at a small premium. All the profits from those warrants wouldn’t add up to the amount we’ve already poured into GMAC, never mind this latest infusion. There’s also the small matter of $100 billion+ we’re never getting back from AIG….
Readers may recall that FDIC was rather peeved at GMAC for previously offering high rates on deposits. This is the ultimate moral hazard of deposit insurance. Depositors aren’t willing to impose discipline on the bank — taking their money out — because they know it’s guaranteed. GMAC knew this and, through its subsidiary GMAC Ally Bank, offered the highest deposit rates in the nation for a time.
In order to sell more government backed debt under TLGP program, FDIC struck a deal by which GMAC will “keep its [deposit] rates at certain amounts,” according to WSJ.
One would think a change of management might be in order. Well, it’s not gonna happen. CEO Alvaro de Molina — formerly CFO at Bank of America — will stay on."
Don't worry your deposits are protected say's Sheila Bair. The assets and future earnings of all successful or potentially successful employer or person in the country has been placed on the block. Wisely, many are shutting down.
Where will it end?