And giving zero-interest loans to people who are the same crappy debtors (yes, even though GMAC has said these are "prime debtors", that means the minimum FICO score is 621, when the national median is over 700) AND who are now much more likely to default than they ever were, say three years ago, (which was already high) due to lowered wages/greater chances to be laid off
is a good thing?To me, it makes it even more clear that GM and GMAC are likely is going to go belly-up at some point in the near future, probably after a few more rounds "government assistance" from the taxpayer.
Need I remind you that this money being loaned out at 0% must be paid back to the federal government through an 8% dividend on its equity shares of GMAC. This makes financial sense how?
This further reinforces the rather interesting point that, although the credit markets have loosened up a little, any loosening is entirely due to the federal government backstop. Unless this changes in any material sense (and it most likely won't because the Feds seem increasing interested in getting so involved in the credit market that they are shutting out private entities), the end game (TSHTF) is still the most likely *final solution*.
Getting to the writer's last point, I have said for a while that Ford was the most likely of the Big 3 to survive, long-term, in its present condition. I still think so. Gaining market share is positive news, even though functionally it means Ford is being killed less than everyone else.
I have an interesting Houston anecdote from the real estate market to share that's related to this, but I'm not sharing it right now. Another thread perhaps...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKyOm6fygQ2U&refer=home