countrybanker

GMAC: Too Much Is Never Enough

My guess, whether the fools who ran GMAC make the decision, or the fools running our govt make the decision, GMAC will finance each of those cars at original MSRP, ie 200% of value and create more losses. Incompetence!


On Dec 30 02:48 PM JAMES CARLINI wrote:

> It will be interesting to see if GMAC will the primary financier
> on car loans for all the Pontiac and Saturn inventories. With inventories
> supposedly rolling out at a 46% discount, what will the financing
> be on these models? 0%?

The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

jepittman:

I have made many loans to consumers for autos, those consumers being both low income, middle income and wealthy.

Here is what you are missing:

1. "Federal Reserve has decided" is your first bad analysis. It is wrong for the Fed to do this. Do your research on the unprecedented acts of the Fed. Not Good. We will all pay for their lunacy. Second, Fed just allowed them to be a BHC, it was the Treasury(taxpayer)who pumped in the money.

2. Noone posted that poor or low income people do not deserve credit! of course they do, but you then use word "subprime". Regardless of how you wish to label things, only extensions of credit that will be repaid should be made, should be pooled and securitized. Its the uncollectible bad credit and the volume of the same, along with the lack of disclosure and transparency which created the credit crisis. Putting bad credit on the books serves noone, the debtor, creditor, GM or the citizenry. Just the opposite is true.

3.Most low income people have great/excellent credit, this is not about class warfare. Stay away from there.

4.Why would you cite GMAC as a company capable of managing credit. They are effectively bankrupt. Thats why there is a bailout of GMAC as well as GM. GMAC cannot sell its paper in the capital markets; the market has spoken. GMAC is not creditworthy itself.

5. Finally, your last paragraph is true, because you now say "reasonable credit", which is good for the economy, GM,its employees, etc.

However, bad credit has the opposite long term effect. GMAC practices have to be questioned because they just went broke, they just made huge credit mistakes, they were just forced to beg you and me for a bailout, and 10 minutes after receiving it, they announce looser credit standards. Why would we taxpayers trust them.

As a new point, was the bailout fair to Ford? Ford Credit? All the credit unions, S&L's and commercial banks accross the country? Of course not. If this bailout shifts sales to GM from Ford and Ford closes a plant due to less sales, was it fair to that laidoff Ford factory worker?

I suppose I am now a Ford employee to. ? By the way, do you work for a failed company named GMAC?




On Jan 02 08:31 PM jepittman wrote:

> It sounds to me like you have been in competition with GMAC for car
> loans.

The Lending Lunacy Continues as GMAC Gives Out More Bad Loans

The Treasury again picking winners and losers. The GMAC bailout was a gift to Cerebus and GM.

1.There is plenty of money in America to make car loans. Every community bank, large bank, credit union, etc. has funds available to do so, and at very attractive rates.

2.Banks will make the loans, but that is not want GM and/or the Treasury wants. GM wants "loose credit". They need inprudent lending from inprudent lender(GMAC) to inprudent car buyer/consumer/Borrowe... Then , they can kick the can down the road a little longer, until these loans default.

3.Sales of cars on credit to non credit worthy borrowers are simply not "sales" in the firstplace.

4.Why would the FDIC allow GMAC into the deposit insurance system with their record? Why wold the FDIC issue TLGP guaranties of GMAC debt with their track record? If FDIC reserves prove inadequate, will anyone be surprised?

5.The financial system, financial institutions and the credit markets will not return to normal until there is TRANSPARENCY and until the market is convinced that debt is collectible, prudent and real. Thus, the Fed and Treasury are adding to the problem by subsidizing this zombie named GMAC.

6.Is there anyone at the Fed or Treasury that was shocked or concerned with the announcement by GMAC, ten minutes after receiving the govt handout/bailout, that GMAC was dropping its prudent lending standard? How long were those standards in opertion, about 60 days?

7.Is GM's only hope for sales based on GMAC and its "subprime" car loans?

Where and when does the nonsense end?