Poor Gina Proia. Not only does she have a last name that she can never leave for the order takers at Panera, but she also has to defend GM. AND look herself in the mirror in the morning. But plucky lass that she is, Gina (may I call you Gina?) is doing her best to fend off media enquiries about the debt-for-equity swap at troubled (as in death rattling) lender GMAC. The company needed to convert 75 percent of its $38b of issued debt into preferred stock to raise $30 billion in capital to become a bank. The deadline for the swap– upon which GMAC’s transformation into a bailout-rescued bank depends (no matter what Gina says)– expired Friday at 11:59pm. Since then, not a peep from the participants. Especially Gina. On Sunday, she played the inscrutability card: she’d let us know in the “near term.” Today, she told Bloomberg “Once the results are finalized, we will disclose that information.” Is she asking us to believe GMAC doesn’t know if it lives or dies or gets Uncle Sugar to change the rules? This could be much ado about nothing. Or it might be time for GM CEO Rick Wagoner to bone-up on his King Lear. So to speak.
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I’ll steal the thoughts of an earlier poster on an earlier thread, but I’ve got to believe that there are FURIOUS negotiations taking place behind the scenes and the truth will emerge (TADA!) after a deal has been struck. My guess on the timeline is December 31 after most folks have gone home for New Year’s. Look for our government to move the goal line again so that Detroit can score some more of our tax dollars.
“GMAC doesn’t know if it lives or dies or gets Uncle Sugar to change the rules”
Actually I suspect this may be more likely than you imagine. My guess is that they did not make the original deadline and are continuing negotiations with debt holders while simultaneously negotiating with the government about a rule change in case the swap does in fact fail. GMAC’s survival is integral to the viability of the first tranche of the bailout/gift (not that the words GM and viability should be used in the same sentence). Either way the US taxpayers will pick up this check.
Happy Holidays from Iceland,
-Kristjan
Kristjan,
Happy holidays to you as well. I hope you are holding up relatively well. Iceland is at the bleeding edge of mass insolvency, and your input is appreciated.
As long as the rules are being rewritten, I think it’s time to stiff the cynical assholes that put us in this position. Fired, no severance, and probationary promotion of lower tier execs. Then audits and consequences.
I sincerely hope that all who profited from running major corporations into the ground, while simultaneously overcompensating themselves, spend the rest of their lives explaining themselves, while embroiled in civil lawsuits.
Justice would be a Gitmo for these clowns.
Hi eh,
Things here are interesting although your characterization that “Iceland is at the bleeding edge of mass insolvency” is incorrect, Iceland is totally insolvent, it is just not yet widely realized that this is so.
We probably are however the car repo capital of the universe. Many here took out loans to buy autos with foreign currency loans, now that the krona is persona non grate as a sovereign currency obviously all these loans are in default.
Off topic, but Iceland’s financial system has already completely collapsed, and managed to take a goodly number of European banking customers for a surprising crash as well thanks to Iceland’s banks buying up European ones. A massive banking empire was built upon the narrow base of 300,000 citizens sharing their own personal currency. Even after years of shrinkage, the city of Detroit still has over three times that many people. Laissez-faire capitalism strikes again.
If you have a subscription, the WSJ has a summary article on what happened: http://online.wsj.com/article/SB123032660060735767.html
OK I give up… please explain the Franco references?
Google is your friend!
As said before, they’ll just bend, -and then break, -and then break some more, the rules for GMAC.
The last week or so, esp. the past 4 days is Feinberg of Cerberus calling up Paulson and Bernanke and saying, “Let’s Make A Deal!”