The Fed and the FDIC have waived lending and borrowing rules for GMAC in order to ease consumer borrowing for GM and Chrysler cars, and the Washington Post doesn't seem to find anything unusual about this:
The Federal Deposit Insurance Corp. granted a rare approval to a program that will allow GMAC to raise money cheaply and take on lending for Chrysler. The Federal Reserve had to waive a rule separating banking and commerce that would have prevented GMAC, which just became a bank holding company, from lending to GM customers because the auto maker is a major shareholder in GMAC.
According to the Post, "The decision by regulators to grant these waivers demonstrates the lengths the government is going to prop up the nation's auto industry." Well, Ford Motors is also part of the auto indutry, but it doesn't appear that Ford Credit is going to benefit from this program, so it's not the auto industry that's getting breaks, it's the now-government-un car companies.
For the Fed to make an exception to its rule separating banks and commercial enterprises would not be unprecedented. The Fed took such a step in its original decision to bring GMAC under the agency's umbrella and it made similar moves involving other financial companies.
So the relevent precedent the Post can cite is the one involving GMAC. I know there are space limitations in a newspaper, but it's hardly reasonable to claim as precedent a decision involving the same company now getting another waiver.
Moreover, the Post notes that up until now, the FDIC had been reluctant to give GMAC access because of its shaky finances. It doesn't even address the possibility that the waiver was influenced by Washington's newly-acquired stake in the car companies.
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Did anyone really think that
May 21, 2009 - 19:36 ET by SnappyDid anyone really think that now that Obama has his own personal Auto company there would not be some rule changes to help "even" the playing field. C'mon, GM is struggling, it just needs a hand up so it can compete with Ford, Toyota etc who have been given ...eerrrr, given... ummm...what have they been given again?
I've been wondering when Ford.....
May 21, 2009 - 19:59 ET by Missouri Conservative...was going to sue GM and/or the federal government over unfair competitive/business practices. How exactly is a private corporation with responsibilities to its shareholders to make a profit supposed to compete with a government subsidized company? The taxpayers will balance GM's books for them. And now this - GM can effectively finance their inventory to their dealers at far cheaper rates than Ford can. It would be unbelievable if Mulally didn't sue over this.
"women and minorities hardest hit"
Doom!
May 21, 2009 - 20:00 ET by heldmywI was leery of the whole Government Motors freak show.
Now?
I wouldn't go near them with a firesuit and trained tigers! What if Obama suddenly decides to "change the rules" and demand full payment of a loan...just because he can?
Sorry, but you better figure out how to eat those cars, 'cause you're sure not gonna sell 'em.
Re GM rules
May 21, 2009 - 20:48 ET by slickwillie2001With the Bamster in charge of car loans at GMAC, I wonder if we will end up like a Young Republicans college club cookie sale, with different interest rates offered depending which class of victims you belong to. White males will pay the top rate, black female disabled lesbians will get interest-free loans.
And if the black female
May 21, 2009 - 21:21 ET by Dan DiegoAnd if the black female disabled lesbians still can't make their payments we'll bail them out w/ The Commuter Reinvestment Act.
I will never buy another GM or Chrysler product
May 21, 2009 - 21:18 ET by jefflebowskias long as Obama has his slimy fingers in the mix and his corrupt labor unions pulling the strings! Ford, stay away from any government money and I'll buy from you the rest of my life!
Angry White Dude
www.angrywhitedude.c...
sorry AW Dude
May 21, 2009 - 21:37 ET by botgbut you already are
“The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.” -- Chief Justice John Roberts
Federal Reserve has a stake in GM
May 21, 2009 - 23:37 ET by SharkGirlOf course the Federal Reserve had to make a change. They have a stake in General Motors through Hellman & Friedman.
Hellman & Friedman bought out shares of Lehman Bro, giving them control of a portion of the Federal Reserve.
AlixPartners
Employees and Hellman & Friedman joined together in a venture, and
it just so happens that General Motors is/was a client.
The relationship is shown right on Hellman & Friedman's site, here: http://www.hf.com/ne...
How
come the Federal Reserve is allowed to have a financial stake in
corporations, can distribute taxpayers' money to their corporate
connections, and then change the rules to protect their corporate
connections?
I have a multimillion dollar lawsuit against
Intergraph, a major Defense contractor who was bought out by Hellman
& Friedman, who also went after shares of the news media. I've
dug for information because of the Georgia and Alabma politicians
earmaking money for Intergraph. I also traced them to PMA Group and
Murtha. Now, a politician has contacted me because he said he wants to
use my lawsuits to unseat Murtha and try to bring integrity into the
Republican party.
Intergraph/Hellman & Friedman and the United States has put about 14 lawyers on the cases against me to try to stop me.
SharkGirl
http://facingtheshar...
A non-lawyer vs. lots of lawyers
Government Motors
May 22, 2009 - 00:23 ET by DustBunny01Very few people are going to buy a 2nd or 3rd rate car even with 1st rate financing when that car will become their primary car.
In a few years, Government Motors will be selling cars to itself, which might not be such a bad thing. If a lawmaker can't make it to the legislature to make more bad laws because his GM car won't start, sounds like a win-win to me...
2 dirty secrets.
May 22, 2009 - 12:08 ET by sevenChrysler warranties are pre petition and are about as unsecured as could be. Fiat is buying tooling etc and not taking on liabilities.
Also with chainsaw Obama running the deal, forget getting replacement parts for your car 2 years from now if it breaks. Especially discontinued models. I am sure Ford car saleman can tell you about that.
Resale values is how government motors buyers will get clobbered. Every time a co goes broke, resale crashes. I suspect the
Chrysler dealers that were cancelled also can kiss off ever seeing rebate reimbursements from cars they sold in April.