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Old 10-28-2009, 08:35 AM   #1
AVANTI R5
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Default GMAC in talks with Treasury for another cash infusion

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WASHINGTON (Reuters) -- The U.S. Treasury Department is in talks with GMAC Financial Services Inc. about a possible additional cash infusion to the company, an Obama administration official confirmed on Tuesday night.

The official declined to say how much additional money was under discussion for GMAC, which already has received $12.5 billion of taxpayer funds.

GMAC is the traditional lender to General Motors Co and is taking over the auto loan business of Chrysler.

The Wall Street Journal reported earlier Tuesday that the government is "likely" to inject $2.8 billion to $5.6 billion into the Detroit-based financier.
http://www.autonews.com/article/2009...910279985/1142
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Old 10-28-2009, 08:48 AM   #2
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Why!?
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Old 10-28-2009, 11:21 AM   #3
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Who owns GMAC now anyway? GM sold out the majority stake ages ago.
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GMAC is the only one of the 19 banks that underwent the stress test that could not raise additional capital from private investors. Ten of the 19 large banks were deemed healthy enough to need little or no additional money; the eight remaining banks were able to raise enough capital from issuing stock, selling businesses, and strong quarterly earnings.
So basically half of the major banks failed, but private individuals chose to invest and shore them up leaving GMAC alone (which was probably a good idea since cerebus capital has become a bad word practically).

edit:
http://finance.yahoo.com/q/ks?s=GJM

I still don't know who actually owns GMAC. Though if we bail them out the US taxpayer will own the majority.

Last edited by sxotty; 10-28-2009 at 11:28 AM.
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Old 10-28-2009, 11:36 AM   #4
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That's a bit frightening as they've recently(?) entered the Canadian savings-account market under the Ally brand. I would be wary to put money into a "bank" that is in financial difficulties.
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Old 10-28-2009, 11:57 AM   #5
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Originally Posted by sxotty View Post
Though if we bail them out the US taxpayer will own the majority.
isn't 'US taxpayer' a bit of a nebulous term? i mean, i don't see any shares in my portfolio...
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Old 10-28-2009, 12:05 PM   #6
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Wow.........I might be losing my job (working as a social worker with abused/neglected children) because of lack of funding and this crap continues to happen............I am so F*******sick of this country right now..........
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Old 10-28-2009, 12:13 PM   #7
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Wow.........I might be losing my job (working as a social worker with abused/neglected children) because of lack of funding and this crap continues to happen............I am so F*******sick of this country right now..........

Tell me about it. We get to pay to bail out companies run into the ground by executives who walked away with millions in salaries, but money for kids that have done nothing wrong in life except to be born into the wrong family/circumstances is in short supply.

While I'm not a social worker, I'm constantly suprised by how little you guys get paid compared to the terrible things you have to see and deal with. I know 4 social workers (close friends) and the stories that they tell me are so sad and depressing.

But yeah, lets bail out poorly run businesses who have no one to blame but themselves.

[/rant]
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Old 10-28-2009, 12:28 PM   #8
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Its the golden rule. Capitalism can be a great thing and a terrible thing all at once.
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Old 10-28-2009, 12:56 PM   #9
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Government bailouts are not "capitalism."

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Its the golden rule
"He who has the gold, makes the rules."
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Old 10-28-2009, 03:06 PM   #10
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isn't 'US taxpayer' a bit of a nebulous term? i mean, i don't see any shares in my portfolio...
Well that is b/c you don't understand your portfolio

The government has done this kind of thing before in prior decades. They sell the shares later and that means you can pay less taxes or the deficit is reduced, or spending can be increased to gobble up the excess creating more services better roads etc... Whatever way the money goes though it is still effectively as though it is a trust fund for taxpayers. We have little say, but can kick the board out at least.
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Old 10-28-2009, 04:11 PM   #11
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This is exactly why i will never buy anything that will carry a GM badge or will be even remotely associated with this bastard child.
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Old 10-28-2009, 04:34 PM   #12
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Amen to that...GM will never get a dime from me or anybody I know.
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Old 10-28-2009, 04:45 PM   #13
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Originally Posted by sxotty View Post
The government has done this kind of thing before in prior decades. They sell the shares later and that means you can pay less taxes or the deficit is reduced, or spending can be increased to gobble up the excess creating more services better roads etc... Whatever way the money goes though it is still effectively as though it is a trust fund for taxpayers. We have little say, but can kick the board out at least.
surely you jest. pay less in taxes? reduce the deficit? improved services? trust fund for tax payers? i just had to double check because each of those ideas are good in theory, but never quite come to fruition.

i think it may be more realistic to say, the government is doing what it does because it can. basically, f*** you, taxpayer. don't like me? vote me out, and my brother Tomax in.

oh yeah, no shares of GM in the portfolio still. maybe if i drink more of the Kool Aid they will appear...
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Old 10-28-2009, 04:51 PM   #14
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Government bailouts are not "capitalism."



"He who has the gold, makes the rules."
As in the rich not really suffering like other's. As in CEO's making a ****load and getting bonuses or golden parachutes even if they run a company into the ground and destroy regular people's lives in the process.

So here we are regular Joes are footing the bill for mistakes made by people who own Bentleys and Lambo's. Because while a Capitalist society can generate wonderful inventions and provides great motivation it also won't work for the greater good of all.

Insurance companies who routinely try to avoid claims because it's better for the bottom line, auto companies who wonít make a recall until the average out of court settlement gets to the point where making a recall is the cheaper option, where drug companies put more money into erectile dysfunction pills than new antibiotics.

This is the game, very few companies I doubt any large ones have any moral sense. They wouldnít knowingly do something that is better for society if they could do something else that made more profit. If they do they do it for PR, tax break or whatever, it surely isnít from the kindness of their heart.
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Old 10-28-2009, 04:57 PM   #15
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I think at this point it is very safe to say that the American Taxpayers will never see a return on their investment. By the time these companies turn around and make enough profit to satisfy their greed and come back to pay the citizens who supported them, the people would have forgotten all about it and the Government will have excused these companies actions and everyone will have moved on with their lives.

As for funding Government programs like Social Work in opposition to funding the private business, well that is just socialist talk. Let those children fend for themselves.
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Old 10-28-2009, 07:56 PM   #16
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Once again people fail to understand basic economics.

If the companies ever turn it around we will get paid back. If they don't we will lose our investment. It is simple. The government owns a part of the companies. That will only disappear if the companies do. This has happened before it isn't a mystery despite people's confusion.


If the government earns more on it than we pay on treasuries then it is a good investment. Otherwise it is a bad investment from the perspective of taxpayers. Still simply spending the same as we tax would be much better, but the republicans and democrats have both shown complete incompetence with managing a budget.
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Old 10-28-2009, 08:45 PM   #17
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Originally Posted by design1stcode2nd View Post
As in the rich not really suffering like other's. As in CEO's making a ****load and getting bonuses or golden parachutes even if they run a company into the ground and destroy regular people's lives in the process.

So here we are regular Joes are footing the bill for mistakes made by people who own Bentleys and Lambo's. Because while a Capitalist society can generate wonderful inventions and provides great motivation it also won't work for the greater good of all.

Insurance companies who routinely try to avoid claims because it's better for the bottom line, auto companies who wonít make a recall until the average out of court settlement gets to the point where making a recall is the cheaper option, where drug companies put more money into erectile dysfunction pills than new antibiotics.

This is the game, very few companies I doubt any large ones have any moral sense. They wouldnít knowingly do something that is better for society if they could do something else that made more profit. If they do they do it for PR, tax break or whatever, it surely isnít from the kindness of their heart.
+1.

And GMAC is stupid to be operating under that tainted name if General Motors doesn't control them anymore. Stupid banks will keep doing the same thing if they keep getting bailed out.
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Old 10-29-2009, 06:50 AM   #18
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GM hasn't controlled them for years.
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Old 10-29-2009, 07:35 AM   #19
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Quote:
Originally Posted by design1stcode2nd View Post
As in the rich not really suffering like other's. As in CEO's making a ****load and getting bonuses or golden parachutes even if they run a company into the ground and destroy regular people's lives in the process.

So here we are regular Joes are footing the bill for mistakes made by people who own Bentleys and Lambo's. Because while a Capitalist society can generate wonderful inventions and provides great motivation it also won't work for the greater good of all.

Insurance companies who routinely try to avoid claims because it's better for the bottom line, auto companies who wonít make a recall until the average out of court settlement gets to the point where making a recall is the cheaper option, where drug companies put more money into erectile dysfunction pills than new antibiotics.

This is the game, very few companies I doubt any large ones have any moral sense. They wouldnít knowingly do something that is better for society if they could do something else that made more profit. If they do they do it for PR, tax break or whatever, it surely isnít from the kindness of their heart.
The only thing I disagree with here is that the capitalist society will not work for the general public. THere are many examples of it working wonderfully. MOst of the products you buy are cheaper because of the capitalist free market system. Competition forces competitors to drop the prices.

Now GM is not capitalism at work. Failing banks and car companies should have been let fail. Regardless of the consequences. The recession that would have ensued would have been a strong lesson to other companies to straighten up. People and companies learn and get better through adversity. They innovate, they improve and find ways to make it. When you instituted the bail out, you have removed the consequences of running a car company, bank, insurance etc into the ground through bad business decisions. No consequences NO LESSON LEARNED. A child that was handed everything and never punished in life ends up a spoiled brat unable to make it off the parents trust fund. We are supporting spoiled brat companies that will only milk us more and more and never learn to grow up.

I do not know advanced economics (just the basic stuff from college), but I know people, and whether its a bratty kit or a bratty CEO, people are people. We have created a monster, and all we have to show for it is double the national debt.
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Old 10-29-2009, 10:55 AM   #20
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I agree the banks and other companies should have been allowed to fail. The best lessons we have learned in our lives have come through trying something and succeeding or failing. If the failure is hard enough you learn your lesson and don’t do it again.

A capitalist system usually works very well when tempered with some governmental control. Competition is normally very good for the consumer but isn’t always good for a society. I.E. Walmart and the vast exportation of jobs to third world nations with a lower cost of living. Great for the consumer as you get cheaper goods but you lose something as well.
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