GM gets another 7.5 billion today

[Gainster]

So how does Ford stand alone against this & survive?

Analysts suggest fresh government aid, along with the merger of Chrysler's financial arm, would make GMAC a lending powerhouse that would give GM and Chrysler a huge advantage over their competitors. A U.S.-controlled GMAC would have the power to offer better loan terms to buyers of GM and Chrysler cars and trucks as a way of steering business to the troubled automakers

 

[ruffryder]

Home loans were easy and there were a few hundred options that would allow you to buy more house than you could actually afford. Clinton signed a law making Fannie may and Freddie mac buy up the toxic loans so there was no down side to banks making the loans.
Then Fannie may and freddie mac went BOOM.
Now there was no one to buy the toxic loans and the major lenders were stuck with em. They stopped loaning money and went into survival mode.
This shut down the home loan industry and crashed the market.

You forgot to put in how Bush unregulated the securities market, allowing investment groups to make billions by selling people securities that few even knew what was in them...

 

[Ollie]

You forgot to put in how Bush unregulated the securities market, allowing investment groups to make billions by selling people securities that few even knew what was in them...

You would be correct.
There were a LOT of little things going on behind the scenes.
Just ask Bernie Maydoff.

One thing people have got to come to grips with.
This whole mess isn't a Dem problem.
It's not a republican problem.
It's a political climate problem.
If you spend it, you can tax your way out.

Will be interesting to see if California can re-adjust their budjet or if we get to bail them out also.

 

[Gainster]

http://www.thebigmoney.com/features/todays-business-press/2009/05/21/new-threat-thrifty-americans

GMAC poised for bailout billions? It looks that way. The New York Times and WSJ report this morning that the Treasury Department will inject as much as $7.5 million into General Motors' (GM) former financing arm, GMAC. "The deal is expected to close on Thursday and comes two weeks after federal regulators concluded from a stress test on GMAC that it needed an additional $11.5 billion in capital to weather a severe downturn in the economy," the NYT writes. The WSJ calculates that when it's all done, GMAC may need to collect $14 billion. "As a result of the move, the government within months could end up owning both GMAC and General Motors," the newspaper writes. Staying in the auto sector, Chrysler named C. Robert Kidder its new chairman for when it emerges from bankruptcy proceedings. The Detroit Free Press describes Kidder as something of a "Renaissance man." "He's led chemical and manufacturing firms, consulted with Ford Motor Co. and even managed a winery in California’s Santa Ynez Valley," the newspaper writes. There is fresh opposition to Chrysler's government-brokered reconstruction plan. Indiana-based senior debt holders object to the plan, which would see "unsecured creditors ranking below them—namely the United Auto Workers union ... recover more," the WSJ reports.

 

[Gainster]

You would be correct.

Will be interesting to see if California can re-adjust their budjet or if we get to bail them out also.

http://www.realclearpolitics.com/articles/2009/05/21/californias_dependency_culture_96597.html

 

[U81I812]

Some thoughts on Ford.

Like someone said earlier..... before things got really bad Ford went out and got some big a$$ loans, essentially putting the whole company up as collateral. Ford must pay these loans back, GM & Chrysler did not get more loans.

Currently Ford has not taken obama dollars because of the earlier loans. Currently GM & Chryslers has gotten billions of free obama dollars that everyone knows will never be paid back.

Ford did morally correct thing but the missed out on free money.

Ford lost 2 Billion last quarter so they still can make money selling cars. I'm just thinking in the long run Ford may be worse off because they owe the most money.

 

[Beels]

This is exactly the BS rhetoric that will destroy the entire north american economy. IF you read the story, it's an injection of 7.5 billion to GMAC. GM doesn't own GMAC. Cerebus does. They also "own" Chrysler. Read the stuff posted and get yourself informed before you get all "I'm never buying a GM again" rant. GMAC isn't building cars. They are a bank.

I just quoted this again so people will read it before going off on some half-cocked rant about GM.

 

[Ollie]

I just quoted this again so people will read it before going off on some half-cocked rant about GM.

GM and Chrysler both deserve to go under or be taken over by another PRIVATE company.

So long as they are owned in part or in total by the government, I won't own one.
GMAC is the primary lending arm for both GM and Chrysler.
Bad buisness practice put them in the position they are in, it's not my job to bail em out.
If I lose my job do you thing GM or Chrysler will give me a free car?

 

[ruffryder]

GM and Chrysler both deserve to go under or be taken over by another PRIVATE company.

So long as they are owned in part or in total by the government, I won't own one.
GMAC is the primary lending arm for both GM and Chrysler.
Bad buisness practice put them in the position they are in, it's not my job to bail em out.
If I lose my job do you thing GM or Chrysler will give me a free car?

mmm.. .this might be semantics but aren't they a public company? I mean, you can buy stocks and the like... I thought it was private companies that don't have / sell stocks.

Usually, the securities of a public company are owned by many investors while the shares of a private company are owned by relatively few shareholders. A company with many shareholders is not necessarily a public company. In the United States, in some instances, companies with over 500 shareholders may be required to report under the Securities Exchange Act of 1934; companies that report under the 1934 Act are generally deemed public companies. The first company to issue shares is thought to be the Dutch East India Company in 1601.

 

[Ollie]

mmm.. .this might be semantics but aren't they a public company? I mean, you can buy stocks and the like... I thought it was private companies that don't have / sell stocks.

your right, it's semantics.

 

[ruffryder]

You would be correct.
There were a LOT of little things going on behind the scenes.

IMO it is one of the biggest.

You had the housing market being propped up by a lot of factors. Lack of long term investments (people took money out of stocks), a perceived reduced risk, an availability to easy credit, aggressive loans, adjustable loans.. This was the house of cards.

Now this would have been much more localized, but the deregulation of the securities / derivatives market allowed this to cross over into the investment side. This is the link that allowed the big financial firms to be taken down. The bad loans were a problem, but the fact that loans were then sold over and over again and buried into derivatives packages became the other part of the problem and the largest part that hit the financial sectors.

That is my take on the subject anyways...

You keep saying that the government should have just bought the assets. The problem with that is what price do you pay for them? Paying the rock bottom price doesn't work, as that makes everyone take the loss. Paying top dollar doesn't work, because you end up screwing the tax payer, while the owner of said toxic assets gets off clean.

What the govt did was to give out LOANS to companies. This ensures that the govt has a good ability to get the money back. The bailouts were not gifts but loans. The govt is going to make money off of all the so called bailout money.

At least this is what I gather from the situation.

 

[U81I812]

Both the government and GM/Chrysler have already stated the loans will never be paid back.

 

[Ollie]

What the govt did was to give out LOANS to companies. This ensures that the govt has a good ability to get the money back. The bailouts were not gifts but loans. The govt is going to make money off of all the so called bailout money.

At least this is what I gather from the situation.

What U81I812 (dude, get an easier name) said is correct.
All the money paid to GM and Chrysler will be forgiven as part of the bankrupcy.
You won't see more than 30% of the money we have "loaned" all these institutes ever paid back.

 

[ruffryder]

Both the government and GM/Chrysler have already stated the loans will never be paid back.

What U81I812 (dude, get an easier name) said is correct.
All the money paid to GM and Chrysler will be forgiven as part of the bankrupcy.
You won't see more than 30% of the money we have "loaned" all these institutes ever paid back.

I had moved the conversation over to the financial side (ie the banks) and OT from the auto companies. Yes, it has been stated that the govt would "forgive" the initial bailout money to GM...

Sorry for the confusion..

 

[Gainster]

Some thoughts on Ford.

Like someone said earlier..... before things got really bad Ford went out and got some big a$$ loans, essentially putting the whole company up as collateral. Ford must pay these loans back, GM & Chrysler did not get more loans.

Currently Ford has not taken obama dollars because of the earlier loans. Currently GM & Chryslers has gotten billions of free obama dollars that everyone knows will never be paid back.

Ford did morally correct thing but the missed out on free money.

Ford lost 2 Billion last quarter so they still can make money selling cars. I'm just thinking in the long run Ford may be worse off because they owe the most money.

Jac Nasser ran Ford right down the tubes & in the process it could have saved them. Ford dumped Rover & Jag while they had value to pay off some of the debt created by Nasser's lack of leadership. I remember when Nasser got the boot & thinking how screwed it was for Ford & how deep the hole was. Now is the glass half full or half empty?

I hope I am wrong but I dont see Ford keeping up against the whitehouse backed GM & Chrysler.

 

[maluchm]

I just quoted this again so people will read it before going off on some half-cocked rant about GM.

Yes, GMAC was sold off years back and are not controled by GM anymore. They are the biggest creditor to GM and Chrysler for car sales from what I understand though.

 

[UintaVentureBoys]

I have purchased GM my whole life.
The only exception being the short time I owned a Dodge Dakota.
I will only be buying Ford from now on.

Drivien GM since I was only enough to drive, my dad has, my dads dad has, and my brother does too.. Ford??? (Found On Road Dead)??? Might have to make the Switch I guess

 

[Gainster]

Drivien GM since I was only enough to drive, my dad has, my dads dad has, and my brother does too.. Ford??? (Found On Road Dead)??? Might have to make the Switch I guess

Fargin Owner Real Dumb
Wait I own a old Ford

 

[UintaVentureBoys]

Fargin Owner Real Dumb
Wait I own a old Ford

LOL No bashing on Ford. i've just been stuck in my ways
I did have a powerstroke when i worked for a wellhead company and it wasn't a bad rig at all, accept for the first 25K miles I had to take it to the dealer every 5k miles to get a computer tweak to turn the engine light off but other than that it pulled good, got descent mileage, and had enough power for me.. for a daily driver i wouldn't recomment it though. Ford = workhorse, not daily commuter

 

[Beels]

Yes, GMAC was sold off years back and are not controled by GM anymore. They are the biggest creditor to GM and Chrysler for car sales from what I understand though.

Fall of '06, they sold their controlling interest.

Now controlled by Cerebrus, which is under the same umbrella as Citigroup.
Now there's a real shocker....