GMAC: "It's not a money pit"

Just for fun, let’s take another look at the twisted thinking of the Federal Government and GMAC officials regarding their reasons for a THIRD bailout of the auto lender. The information is from the NY Times. The comments in italics are mine.

• It would deal a devastating blow to the auto industry, its suppliers and employees. Apparently there are no other financial institutions available to loan money for the few people who might be interested in buying an American made car (actually, it’s pretty likely that a US Automaker vehicle is made mostly in other countries).
• GMAC borrowed $2.9 billion in the bond market yesterday. So, a company with a dreadful credit history was allowed to borrow billions yesterday and will still (I’ll be shocked if it doesn’t happen) be receiving as much as $5+ billion more from our pockets.You should know that no other financial institution has gone begging to the government three times.
• “We are in too deep for us to sensibly back out now,” said Douglas Elliott, a former investment banker… “We will probably lose less money by putting in more now.” That makes me feel so much better knowing that by doing this I have the opportunity to possibly “lose less” money. I’m not certain if I should laugh or cry at that logic.
• GMAC is racing to shore up its finances before a crucial Nov. 9 deadline, when federal regulators will evaluate its financial health. Let’s see if I have this straight.
  • GMAC is in another financial mess which is public knowledge.
  • GMAC is seeking “borrowed” money so their books look good on November 9th.
  • The people they will receive money from are the very people who will look at their books on November 9th. Apparently, on November 9th, the Federal Government will forget where the billions of dollars on the books came from and just think that GMAC is a strong, productive financial institution and give them a gold star for their excellent business practices.

OK, I’ve decided to cry.

OneMom