jsc173

Treasury Directs GM to Get Ready for Bankruptcy

You highlighted the key real problems and the key political problems.

"Old" GM and "old" UAW are dead. The only question is whether anyone other than a bankruptcy trustee has the fortitude to bury them. I tend to doubt it. The Obama adminstration can't and GM management won't, so it's the courts and Chapter 11 as the only rational player in this theater of the absurd.

A Fed About-Face on GMAC?

This is the epitome of non-sensical government intervention.

Tens of billions have been doled out to large banks, in theory to stimulate granting credit, yet the iceberg hasn't thawed. Few of those banks (Chase excepted) did much in the way of supporting the auto industry. Why? Because the maufacturing arms always subsidized the financing arms. How many banks would make 0% loans? Or provide floor plan financing at low rates?

So why is Treasury creating an opportunity for GMAC to do more insane financing?

Better yet, since GMAC was amongst the more aggressive mortgage lenders, why are they being favored when a couple hundred savings and loans (who didn't do stupid mortgage lending) are still waiting for TARP money?