BMEWS
 
Sarah Palin is the other whom Yoda spoke about.

calendar   Thursday - December 31, 2009

Nasty Deal for GMAC

This doesn’t seem to be much of a news item, but the federal government just injected another pile of cash into GMAC, and then took it over. So the feds own yet another bank/lending institution now.

GMAC to Get Another $3.5B in Aid From Treasury

A GMAC spokeswoman declined to comment on any potential government action but said, “GMAC has been conducting a strategic review of its business and evaluating options to address the challenges in its mortgage operation.” The spokeswoman said GMAC wants to prepare itself to repay the U.S. government.

The willingness by the U.S. Treasury to deepen taxpayer exposure to GMAC reflects the troubled company’s importance to the revival of the auto industry. The company was told to raise additional capital as part of government-led stress tests of large banks conducted earlier this year. The tests were to determine whether firms would need more capital to continue lending if the economy deteriorated in 2009 and 2010.

GMAC has only filled a portion of its capital hole and, unlike other banks that participated in the stress tests, has been unable to attract much capital from private investors. The Treasury said earlier this year that it would make as much money available to GMAC as needed to fill its capital hole and projected the firm would need another government infusion of as much as $5.6 billion.

GMAC’s capital needs have turned out to be somewhat less than originally envisioned, in part because impact from the bankruptcies of General Motors Corp. and Chrysler Corp. was not as severe as federal regulators originally projected.



Ok, here’s the part that I don’t get, the part that rather looks like arm twisting thuggery to me. But what do I know, right? Before this latest cash infusion, Uncle Sugar had fattened up GMAC’s coffers to the tune of 12.5 billion. For this gift of our money, the feds took 35% ownership. Basic math: $12.5B / 35% = $357,142,857.14 for every percent ownership. Now the feds are going to drop in another lump sum, a relatively “piddling” little $5.6 billion, and then they’ll own 56%? Less than half as much infusion but way more than half as much new ownership?  Only $266,666,666.67 per percent? Huh? That doesn’t seem right. It’s not like the feds bought up most of the outstanding stock shares that had fallen in value, is it? This doesn’t seem right to me. But then, the federal government owning both the means of production and the banking industry doesn’t seem right either. I’m just one of those simple minded Conservatives.

Auto finance company GMAC got a new majority owner late Wednesday when the federal government announced it was assuming a 56 percent stake in the company with $3.8 billion in aid.

It was the third bailout for GMAC, which had previously received $12.5 billion in direct federal aid and other support. The government already had a 35 percent stake in the company. GMAC had requested an additional $5.6 billion in federal aid in November.

The Treasury Department announced that it also would hold about $14 billion in loans the bank may eventually have to replay. The government will appoint four of GMAC’s nine directors.

GMAC is the primary lender for dealers of General Motors and Chrysler vehicles. It converted to a bank holding company last year to qualify for federal bailout funds.


avatar

Posted by Drew458   United States  on 12/31/2009 at 03:14 PM   
Filed Under: • Finance and InvestingGovernment •  
Comments (2) Trackbacks(0)  Permalink •  
Page 1 of 1 pages

Five Most Recent Trackbacks:

The Brownshirts: Partie Deux; These aare the Muscle We've Been Waiting For
(2 total trackbacks)
Tracked at 香港特首曾荫权和部分高管分别用步行或搭乘公共交通工具的方式上班
西安电加热油温机 香港盛吹“环保风” 专家指市民已从被动变主动 中新网9月29日 淮安导热油电加热炉 电 据香港中通社报道,9月29日晚由香港某环保团体举行的“无冷气夜”,吸引了5万名市民及超过60间企业承诺参加。这是香港最近环保活动不断升温过程中的大型活动之一。 进入九月,香港各界环保活动渐入高潮,层出不穷。特首高官与各界市民齐齐参与,是其中一个最大特色。…
On: 03/21/18 12:12

meaningless marching orders for a thousand travellers ... strife ahead ..
(1 total trackbacks)
Tracked at Casual Blog
[...] RTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPL [...]
On: 07/17/17 04:28

a small explanation
(1 total trackbacks)
Tracked at yerba mate gourd
Find here top quality how to prepare yerba mate without a gourd that's available in addition at the best price. Get it now!
On: 07/09/17 03:07

The Real Stuff
(2 total trackbacks)
Tracked at Candy Blog
[...] LAWS OF THE UNITED STATES OF AMERICA AND ALL PARTIES IRREVOCABLY SUBMIT TO THE J [...]
On: 06/11/17 06:40

when rape isn't rape but only sexual assault
(1 total trackbacks)
Tracked at Trouser Blog
[...] took another century of Inquisition and repression to completely eradicate the [...]
On: 06/06/17 11:37



DISCLAIMER
Allanspacer

THE SERVICES AND MATERIALS ON THIS WEBSITE ARE PROVIDED "AS IS" AND THE HOSTS OF THIS SITE EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, TO THE EXTENT PERMITTED BY LAW INCLUDING BUT NOT LIMITED TO WARRANTIES OF SATISFACTORY QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE SERVICE OR ANY MATERIALS.

Not that very many people ever read this far down, but this blog was the creation of Allan Kelly and his friend Vilmar. Vilmar moved on to his own blog some time ago, and Allan ran this place alone until his sudden and unexpected death partway through 2006. We all miss him. A lot. Even though he is gone this site will always still be more than a little bit his. We who are left to carry on the BMEWS tradition owe him a great debt of gratitude, and we hope to be able to pay that back by following his last advice to us all:
  1. Keep a firm grasp of Right and Wrong
  2. Stay involved with government on every level and don't let those bastards get away with a thing
  3. Use every legal means to defend yourself in the event of real internal trouble, and, most importantly:
  4. Keep talking to each other, whether here or elsewhere
It's been a long strange trip without you Skipper, but thanks for pointing us in the right direction and giving us a swift kick in the behind to get us going. Keep lookin' down on us, will ya? Thanks.

THE INFORMATION AND OTHER CONTENTS OF THIS WEBSITE ARE DESIGNED TO COMPLY WITH THE LAWS OF THE UNITED STATES OF AMERICA. THIS WEBSITE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA AND ALL PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE AMERICAN COURTS. IF ANYTHING ON THIS WEBSITE IS CONSTRUED AS BEING CONTRARY TO THE LAWS APPLICABLE IN ANY OTHER COUNTRY, THEN THIS WEBSITE IS NOT INTENDED TO BE ACCESSED BY PERSONS FROM THAT COUNTRY AND ANY PERSONS WHO ARE SUBJECT TO SUCH LAWS SHALL NOT BE ENTITLED TO USE OUR SERVICES UNLESS THEY CAN SATISFY US THAT SUCH USE WOULD BE LAWFUL.


Copyright © 2004-2015 Domain Owner



GNU Terry Pratchett


Oh, and here's some kind of visitor flag counter thingy. Hey, all the cool blogs have one, so I should too. The Visitors Online thingy up at the top doesn't count anything, but it looks neat. It had better, since I paid actual money for it.
free counters