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  • U.S. Financial Institutions: Does the Collective Balance Sheet Add Up?  [View article]
    Most useful article today. Thank you
    Nov 16 20:48 pm |Rating: 0 0 |Link to Comment
  • The Stress Test's Biggest Loser: GMAC [View article]
    Serge,

    Nope. Has been a separate company since maybe 2002 and GM sold 51% in '06. At that time, ResCap and GMAC Auto were walled off from each other, to protect ResCap from the "riskier" part of the business, auto loans.

    GMAC could pull the plug on ResCap and instantly need half the capital the stress test said they need.

    Go to the GMAC investor relations site and read their 5/5 presentation, it will provide you with some clarity on the structure.


    On May 11 11:26 AM Serge Birbrair wrote:

    > Alex, I thought GMAC is GM's subsidiary, no?
    May 11 12:29 pm |Rating: 0 0 |Link to Comment
  • The Stress Test's Biggest Loser: GMAC [View article]
    Hey Serge,

    You realize they are different companies, don't you?

    One of the biggest problems with analyzing and investing in distressed debt is the misinformation that is being put out by people who have no idea what is going on or are emotional about the situation.

    GMAC bonds will be money good. ResCap I'm not so sure about.

    Alex


    On May 10 02:01 PM Serge Birbrair wrote:

    > How will the GM bankruptcy affect GMAC bondholders?
    > news.yahoo.com/s/ap/20...
    May 10 19:20 pm |Rating: +1 0 |Link to Comment
  • The Stress Test's Biggest Loser: GMAC [View article]
    Tom,

    ResCap is walled off. I believe they will be cut loose. The "other" you speak of is car loans and dealer loans.


    On May 07 06:15 PM Tom Armistead wrote:

    > About that 4 billion "other." MBIA is suing ResCap, part of GMAC,
    > for warranties and representations liablity on ResCap mortgages wrapped
    > by MBIA. The mortgages allegedly were not in compliance with contract
    > terms, and need to be replaced with mortgages of better quality.
    > That obligation could be part of the "other."
    >
    > Some publicly traded companies have carried substantial warranties
    > and representations reserves, one of them was Countrywide, also being
    > sued by MBIA.
    May 07 20:33 pm |Rating: +2 0 |Link to Comment
  • The Stress Test's Biggest Loser: GMAC [View article]
    More than half the worst case losses reside in ResCap, a walled off sub of GMAC. This "walling off" was done when GM sold half of GMAC, and was done to protect ResCap from less desirable auto loans. Who knew that this would eventually save the auto loan business of GMAC and their bondholders.

    Converting the Govt’s pfd’s and cutting ResCap loose is all they need to do to comply with the capital requirements.

    I also believe that there will be a healthy helping of TARP funds to see the "anointed" lender of first choice to the auto industry.
    May 07 20:31 pm |Rating: +1 0 |Link to Comment
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