Wednesday, December 31, 2008

GMAC: Got Mine?

General Motors has received a late Christmas present from The Treasury Department in the form of $5 billion in cash to GMAC Financial Services. You and I, as owners of our illustrious Government, are now enjoying (?) a senior preferred equity stake in GMAC.
Merry stinking Christmas.

This is like what happened to my daughter one year at Christmas. She'd been a little sassier than usual, and I threatened that Santy Claus was going to bring her a bag of switches.

True to my word, The Fat Man clambered down the chimney that year with a bag of Radio Shack dip switches for her stocking that year. She was not amused. In fact, she didn't even get the joke, but she was only 12, so there you have it.
This year, if you misbehave, the Government's going to give you stock in a failing automobile manufacturer.
Yes, Virginia, Santa is insane.

Don't worry about GM ever going bankrupt now: With all this Federal aid to GMAC, our government is so financially entangled in the GM complex that a Chapter 7 liquidation is not very likely.

Have the money lenders learned their lesson?

GMAC returned the government's goodwill gesture by announcing relaxed lending standards, now that it's on "firmer financial footing."

Instead of restricting loans to buyers with a FICO score of 700 or higher, the lender will now consider you a credible mark with a score of 621 or better. And GM reopened its box of dime-bags with another round of financial crack to lure you into the show room: zero-percent financing offers on selected models in an attempt to lure in these credit-worthy customers.

Well, it's easy come, easy go. The money didn't cost GMAC anything, so they're giving it away to you. Loan prices so low, we've got to read them off the floor, ladies and gentlemen!

Not good enough. I want my car loan modified, don’t you?
The dang rattle trap's just not worth what it was when I drove it off the car lot, and I’d like the lender to adjust the principal amount downward to reflect the corresponding loss of value.
Hey what’s good for the goose is good for the gander…or in this case mortgage bankers and automobile financiers taking government money.

Prediction for 2009: The new slogan on our money replacing “In God We Trust” will be “Where’s Mine?”

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