GMAC, Cerberus Looking For a Piece of Bailout Money

GM's finance arm, GMAC Financial Services has already been granted some federal assistance.  GMAC was allowed access to the new short-term funding facility created by the Fed that went into operation on Monday.  The Fed's new facility has been credited with returning liquidity back to the commercial paper market which disintegrated after the Lehman bankruptcy caused the largest money market fund to break the buck.  

GMAC is also seeking to become a bank holding company so that it can have access to a piece of the government's $700 billion financial rescue plan.  The Fed has been holding discussions with GMAC about this move for over a month.  The boneheads at Cerberus, the private equity firm that has the misfortune of owning controlling stakes in both Chrysler and GMAC, is attempting to swap its stake in Chrysler for a larger share of GMAC.  Why?  Because why would you own a crappy US auto-maker that cannot compete with foreign rivals that you happened to purchase at the absolute peak of the market, when you can own a bank holding company that has access to federal government bailout money?  So, you see, this swap is absolutely necessary for the good of the US auto-industry, the US consumer, but particularly for Cerberus.  Without some sort of bailout money, both Chrysler and GMAC are toast which would be very bad for Cerberus and its three-headed dog-loving investors.  And that would be bad for America.  When you hear your favorite congressman preaching about the need to bail out the US auto-industry that is finally crashing under its own uncompetitive weight, think about who stands the benefit the most: the private equity clowns that made a terrible investment decision.