GMAC to get another $3.5B in federal aid

[cal04]

Source: Associated Press

GMAC Financial Services is expected to receive $3.5 billion more in federal aid to further stabilize the automotive lender, The Wall Street Journal reported Tuesday.

The announcement is expected within days and would coincide with GMAC taking more steps to absorb losses related to its mortgage operations, the newspaper reported, citing people familiar with the situation.

GMAC, which is based in Detroit, has received $12.5 billion in taxpayer money and is 35 percent owned by the federal government. Results of the federal government's "stress tests" earlier this year demanded that GMAC raise an $11.5 billion capital cushion to help it weather further economic decline. GMAC was unable to raise the funds privately.

GMAC spokeswoman Gina Proia declined comment on the newspaper report but said the company "has been conducting a strategic review of its business and evaluating options to address the challenges in its mortgage operation."

Read more: http://news.yahoo.com/s/ap/20091230/ap_on_bi_ge/us_gmac_treasury_1

[Robbien]

1. The government would rather the taxpayer pick up the tab

than let Rescap go into bankruptcy and have the rich folks over at vulture fund Cerberus Capital share in the grief

Its not as if Cerberus loaded the company down with enormous debt and stripped it of all valuable assets. /end sarcasm

[onehandle]

2. This is a terrible company and should have been left to fail.

They will not last. This is flushing money down the toilet.

Trust me.

[girl gone mad]

3. True, but it's pennies compared to the tens of billions we gave AIG. n/t

[Journeyman]

4. Great. This is the company that gave my 2-year-old daughter a credit card. . .

She's had a credit card since she was 18 months old (a dual-card, with myself as co-signer), but GM was the first to send her an offer that didn't require her to be 18 years old, so I could legally apply for it for her. I didn't mislead them, either. I was totally honest. Put her down as 24 months old -- spelled it out. Under "Occupation," told 'em she was an "independent entertainer." Had they contacted me about it, I'd have quickly testified that she was very independent, very entertaining, same as I told the first dual-card issuer. But GM never questioned it, nor did they investigate when we asked for an increase on her limit the next year, to $10,000.

Craziest thing? Two years later, they gave her baby sister a card when she was 6 months old, with a $15,000 limit.

Both girls are in their twenties now, each with an unblemished credit rating going back more than 20 years. I can still see the surprise on the face of the guy at the car lot when my daughter bought her first used car, at 18 years old, and proved to have a credit rating that easily qualified her for the loan without me as co-signer.

All this worked well for my kids. I'm a responsible parent who detests credit issuers and wanted to humiliate them, even if only in the privacy of my own mind. But if GM is so incompetent as to issue credit cards to children, what other boneheaded corporate decisions do they engage in? And now they're getting all our money to continue their profligate ways. . .

[IrishBuckeye]

5. GM doesn't own GMAC

at one time they did, but no more.