Re: Freddie, Fannie and you.
- From: john <amdinc@xxxxxxxxxxxxxxx>
- Date: Mon, 08 Sep 2008 20:21:37 -0400
F. George McDuffee wrote:
On Mon, 8 Sep 2008 01:06:47 -0400, "vinny" <vinny@xxxxxxxxxxxxxx>
How about gmac offering 1 year cd's at almost 5%?
Wtf is that about? The national average is only 2%. And it's not like they can get 5% on any investments, so are they intentionally taking a loss?
GM is bankrupt...yet they can still give money away?
wtf is going on?
In this case the tax payer is on the hook through the FDIC as
GMAC also owns a "bank." Given that both GMC and Cerberus
[co-owners of GMAC] don't have any capital invested [they did,
but its long gone] and the taxpayers will pick up the bill, they
can offer 5% CDs and make high interest / high risk consumer
loans [e.g. credit card debt at 36% per year] If things go well
they can "double down" and "get even," and if things go as
expected, the FDIC/taxpayers take the loss. This is a major
reason why the regulators demand a minimum ratio of owners'
equity to debt [loan reserves] to insure the owners have some
"skin in the game." FWIW -- this appears to have been a major
contributing factor in the S&L disaster.
Another example of a financial vampire: dead, but sucking the
blood from the living to stay animated.... To see the GMAC bank click on
Now where did I put that garlic???
And the corporate execs that put these institutions walk away with a pile of cash and pensions. The did some of their contract flimflaming as late as July of this year, about 25 million in bennies in addition to some other perks.
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