“We’re likely to have to put in less capital [to GMAC] than we expected,” U.S. Treasury Secretary Tim Geithner told the House of Representatives Financial Services Committee earlier today. Which raises six major questions. First, huh? GMAC has already received not one but two direct injections of federal taxpayer assistance. Why are we arguing over amounts rather than the question of whether or not we should draw a line under the fetid financier and call it quits? Second, when did Geithner’s mob/GMAC figure out that $12.5 billion wouldn’t be enough to keep the lame-ass lender afloat? Third, why hasn’t anyone been called on to the carpet (i.e. shit-canned) for underestimating the federal teat provision needed to prop-up these sub-prime pricks? Fourth, how much taxpayer money did U.S. Treasury Secretary think GMAC would need to stay afloat—you know; before he figured out that the meshugganah money men didn’t need quite so much? Fifth, how much new capital does GMAC need anyway? And sixth, why should we believe we will ever get this money back? Which brings us back to d’oh. “The only thing we’re doing is making sure we follow through on that commitment,” Geithner testified. Or, as the Brits would say, in for a penny, what’s yours is mine.
In other news, Windows 7 has been declared “faster and more reliable, with better access to the internet.”
So let’s sum up Timothy Geithners testimony and get a handle on the US Treasury.
Pissing taxpayers money down the toilet is sane. We’re not pissing away quite as much as our original (faulty) estimates but we’re definately going to piss alot more away.
Government in a nutshell.
White fang explaining banking. No wonder I don’t get it.
Remember, someday, down the road, we the the citizens will get all of our money back. We will all look back at this and laugh and say how stupid we were not to trust the government.
Why are we arguing over amounts rather than the question of whether or not we should draw a line under the fetid financier and call it quits?
– Unlike closing plants and laying-off employees, you can’t get rid of a bunch of loans which you have no idea if/or when they’re going to default.
Second, when did Geithner’s mob/GMAC figure out that $12.5 billion wouldn’t be enough to keep the lame-ass lender afloat?
– They didn’t know just like no one else knows how many people will lose their jobs and not be able to pay their loans. It’s a snowball effect.
Third, why hasn’t anyone been called on to the carpet (i.e. shit-canned) for underestimating the federal teat provision needed to prop-up these sub-prime pricks?
– Do you want the government to supply GMAC with $100 billion right off the bat? Or, start at let’s say 20 then as time goes by inject just the necessary amount. In the end it it should be less than a massive amount up front!
Fourth, how much taxpayer money did U.S. Treasury Secretary think GMAC would need to stay afloat—you know; before he figured out that the meshugganah money men didn’t need quite so much?
– Once again, as people lose their jobs they default. How many? Well, neither they, you nor I know.
Fifth, how much new capital does GMAC need anyway?
– Just enough to stay afloat. Do you honestly think they are just writing a check without looking at the books and reason for the money?
And sixth, why should we believe we will ever get this money back?
– Good question. There are going to be loses, but had the government not stepped-in what would have been the ramifications?
– On the other hand, I’m glad the big bad government made the initial investment in ARPANET so we can all have our pulpit.
PGcooldad
The costs of going to the wall is always cheaper than the costs of propping up.
The market mechanism of capitalism for bad business is called bankruptcy. Then market players carve up the rotting carcass for what has and hasn’t value. They do so most efficiently.
Step in the Govt and the costs escalate as you prop up this zombie, and truly crap Execs like GM’s Wagoner walk away scott free with $11m of taxpayers hard earned in their pockets.
Politicians and vested interests will always tell you the world will stop if they didn’t step in and ‘save the world’ (British PM Gordon Browns words, not mine). I point you toward Iceland who’s banking sector (4x the size of Icelands GDP) collapsed. Iceland did not collapse, just the banks.
Which is what should have happened to the truly crap bankers, car companies and finance companies. It would have been a far less costly and far less stinking mess than the one we now have with a whole lot less f**king debt to pay off.
Capitalism. It works. Let it.
Other than bitching about the concept of government bailing out private companies there is really nothing to talk about here. We all know GMAC has to be viable to support GM and Chrysler dealers and their customers. Keep in mind the commercial money markets are still frozen solid. If anything, that is the problem. All the banks that received TARP funds yet still no appreciable commercial lending taking place.
@mtymsi
No other car company seems to need three injections of my money to keep financing cars.
It seems like the argument is that if we don’t give GMAC money, then Chrysler/GM won’t be able to finance cars. This, to me, is a sign that Chrysler/GM shouldn’t be in business in their current form. Rather than fling money at them (forever – why should they change, after all – apparently, they’ll just keep being made whole with other people’s money), I’d say let them sink or swim on their own merits – they can have the same access to the credit markets that every other car company does. If they haven’t any, then it’s time for them to change (or go away).
-S5
Mtymsi
I’d underline SaturnV’s comments that GMAC is not at all necessary for the viability of either GM or Chrysler. Other Car Co’s do perfectly well without GMAC, in fact they’re doing miles better (see Hyundai and whoever is their preferred provider).
We’re not bailing out GMAC a car finance anyway. We’re bailing out Cerberus who through GMAC signed off their tragic escapade into sub-prime mortgages. In fact they’ve just been fined over here in the UK by the FSA for mis-selling.
You Yanks are probably paying out for that fine too!!!!
You dare mock Tim “the Claw” Geithner?
How do you estimate 12 billion anything? I can’t get 3 realtors to estimate my house to within 10%. Same with a used car (not estimated by realtors though).
Just imagine the comments from the peanut gallery if the estimate was too low!
I still find it amazing this tax cheat is Treasury Secretary.