GMAC/Ally Bank Interesting turn of events for GM

[Jarhead]

I have yet see this covered on the nightly news, albeit I may have missed it one night.
However, this explains a lot about the numbers GM posted. The fact that we have heard very little if anything on this is also concerning.
In a nutshell, the government has opted to file chapter 11 for this GM lending branch so it does not have to pay back the taxpayer dollar for dollar......


Former GMAC puts mortgage unit in bankruptcy

From the USA Today article....

Ally Financial, the former GMAC, which still owes taxpayers about $12 billion $17.2 billion in loans it got as part of the General Motors and Chrysler bailouts, has nudged its home mortgage subsidiary into bankruptcy court to try end the drag of its toxic mortgage assets on Ally's profitable businesses, such as car loans and direct banking ....

and...

Taking ResCap into bankruptcy carries political implications because it's a part of the auto bailout that didn't turn out as planned. The government still owns 74% of Ally, and it's repaid only $5.5 billion of $17.2 billion it got in the bailout so it could keep offering car dealer and buyer financing for GM and Chrysler. Ally received more than twice the taxpayer help as Chrysler.

 

[bitterlyclingin]

Ally Bank was previously on the list of most precarious financial institutions and I guess its come to that already. Strange that its being allowed to go the Chapter 11 financial reorganization route rather than receiving the typical FDIC pronouncement of "Your'e insolvent! You're closed!" Anyone here remember "M Corp" and Interfirst Bank?
I guess that's what happens when you're on the unofficial, official list of Government favored businesses, in this nation of equals where some businesses are more equal than others and some voters more equal than others. Well I guess there's some precedent for that already in America: There are certain LI, NY voting districts where Hispanic voters are alloted ten votes for every vote they cast, while Caucasian whites are only allowed one vote.
I wonder what the founders would say, you know Jefferson, Franklin, Adams, if they were to return today and find that the Government stepped in to save a company that was supposedly in the business of manufacturing automobiles and for some strange reason suddenly decided that making mortgages was more lucrative than making cars and went belly up for all intents and purposes as a result. Wouldn't a happened when Henry Ford was around. Stupid gets its own special reward.
Peter Lynch, in 1987, had a phrase for companies that engaged in that kind of economic horseplay. He called it "Diworsification" If you need a definition of that look at MacDonalds. When they first appeared, they sold only a super cheap fifteen cent hamburg that was also excellent. Service was excellent as well. Today they serve apple pie, salads, while some of their hamburgs can now run you four bucks and most of their cashiers can neither speak English nor properly count out the change for a ten dollar bill.

 

[CrusaderFrank]

Well well well I thought we got paid in full?

I thought Obama saved GM?

Can you imagine how profitable most businessmen would be if they only repaid their creditors 30 cents on the dollar?

When he's done with his government gig after this November, Obama should be a hedge fund manager

 

[iamwhatiseem]

It will be allowed to go bankrupt. It has only paid about 1/3rd of what it owes the taxpayers - and here is my surprise look at this never being paid back -

As per article, Ally is still making 2/3 of all dealership loans for GM and Chrysler. As bitter points out - no way will the government allow them to fail...the embarrassment and "told you so's" would be too much.
They have a strong-strong-strong favored status.
Expect the President himself to come out and talk about how critical Ally is to the automotive industry, and allowing them to fail would be to damning in this economic environment.
never mentioning of course that the reason they keep losing money is due to risky loans...which will also remained unchanged.

 

[CrusaderFrank]

What happened to Obama saved Detroit and the loans were all repaid?

Detroit is starting to look like something from "Bladerunner"

Watch Out for Flying Bricks in Downtown Detroit –  Deadline Detroit

 

[hortysir]

Liberal-Absent thread is Obvious

 

[Jarhead]

Liberal-Absent thread is Obvious

yep....facts scare them away.

My question is this....

Why has the big 3 broadcast news media not reported on this?

They report on Prince Charles spinning some records...but not this.

They report on a 15 year old Romney playing a practical joke....but not this.

 

[WillowTree]

ask bodecker if she'll sticky this!

 

[The Infidel]

Liberal-Absent thread is Obvious

[ame=http://www.youtube.com/watch?v=K8E_zMLCRNg]Cricket Sound - YouTube[/ame]

 

[WillowTree]

[ame=http://www.youtube.com/watch?v=SbWWNrbEano]Cinco the Donkey - YouTube[/ame]

 

[CrusaderFrank]

So GM didn't repay the bailout?

 

[saveliberty]

Ally is not going bankrupt. The home lending unit has suffered the same fate as many other loan units. What is curious is, why didn't the government spin that unit off separately at the bankruptcy?

Removal of the home loans can help GM as whole be more profitable and may increase the staock value faster. That would mean a better return on the stock.

 

[DiamondDave]

I have yet see this covered on the nightly news, albeit I may have missed it one night.
However, this explains a lot about the numbers GM posted. The fact that we have heard very little if anything on this is also concerning.
In a nutshell, the government has opted to file chapter 11 for this GM lending branch so it does not have to pay back the taxpayer dollar for dollar......


Former GMAC puts mortgage unit in bankruptcy

From the USA Today article....

Ally Financial, the former GMAC, which still owes taxpayers about $12 billion $17.2 billion in loans it got as part of the General Motors and Chrysler bailouts, has nudged its home mortgage subsidiary into bankruptcy court to try end the drag of its toxic mortgage assets on Ally's profitable businesses, such as car loans and direct banking ....

and...

Taking ResCap into bankruptcy carries political implications because it's a part of the auto bailout that didn't turn out as planned. The government still owns 74% of Ally, and it's repaid only $5.5 billion of $17.2 billion it got in the bailout so it could keep offering car dealer and buyer financing for GM and Chrysler. Ally received more than twice the taxpayer help as Chrysler.

But.. but.. but.. Wrongwinger, tdm, etc SCREAM that GM paid EVERYTHING back, and as a matter of fact the govt made a PROFIT and they're doing BETTER THAN EVER

 

[Caroljo]

The libs are all out digging deep for some kind of explanation for this.....no fear...they'll show up eventually to let us know how stupid we are.. Lol!

 

[Claudette]

Guess we taxpayers are sucking hind tit again.

Sounds like Solyndra on a much grander scale.

So Glad we were able to bail out the mismanaged Union pension funds for GM and Chrysler.

We taxpayers live to serve.

 

[saveliberty]

Can you have corporate bankruptcies this close together? Individuals are restricted to once every ten years.

 

[hortysir]

The libs are all out digging deep for some kind of explanation for this.....no fear...they'll show up eventually to let us know how stupid we are.. Lol!

They're out finding some sort of connection to something Romney did 28 years ago

 

[WillowTree]

Guess we taxpayers are sucking hind tit again.

Sounds like Solyndra on a much grander scale.

So Glad we were able to bail out the mismanaged Union pension funds for GM and Chrysler.

We taxpayers live to serve.

take heart, the unions are losing ground daily.

 

[flacaltenn]

Guess I paid for that exercise of disguising GMAC as Ally. The advertising blitz for these creeps is one of the biggest in recent bank history.. What idiot would put a bundle into a bank if they KNEW it was GM in disguise?

 

[iamwhatiseem]

Can you have corporate bankruptcies this close together? Individuals are restricted to once every ten years.

WHo knows....GM essentially files bankruptcy almost every year via hundreds of subsidiaries. The full GM family of businesses is over 100 companies.