Bailing out zombies with taxpayers’ money. But you can trust the government with your money.
“An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention,” Paulson said 21 months ago.
Treasury Secretary Henry Paulson declared that the current turmoil in markets and financial institutions ultimately will “make things better.” (September 15, 2008)
As you see Henry Paulson is a real ‘expert’ you can believe in.
A GMAC Real Estate sign, attached to a sign advertising 0% down financing, is posted in the front yard of a home in Norcross, Georgia, on Sept. 12, 2007. Photographer: Chris Rank/ Bloomberg News
Dec. 29 (Bloomberg) — The U.S. Treasury committed $6 billion to support GMAC LLC, the financing arm of General Motors Corp., the latest step in the government’s widening effort to keep the largest U.S. automaker out of bankruptcy.
Treasury said it will purchase a $5 billion stake in GMAC, and lend $1 billion to GM so the automaker can participate in a rights offering at GMAC to support the lender’s reorganization as a bank holding company. The loan is in addition to $13.4 billion the Treasury agreed earlier this month to lend to GM and Chrysler LLC.
The fresh capital from the Treasury’s $700 billion Troubled Asset Relief Program will enable GMAC to expand lending to car buyers, which in turn may help save GM. The company’s U.S. sales plunged 22 percent this year through November after GMAC — which financed about 35 percent of GM’s retail customers last year — ran short on cash and limited loans to people with only the best credit. The Treasury stepped in after Congress failed to pass an auto industry bailout earlier this month.
Read moreTreasury to Buy $5 Billion GMAC Stake, Expand GM Loan