Tuesday, May 12, 2009

GMAC, the Fannie Mae of auto loans

'Congratulations, taxpayers. Soon GMAC LLC, the money-burning auto and mortgage lender, will likely join Fannie Mae, Freddie Mac, American International Group and Citigroup in your investment portfolio. By the time all the checks have cleared, you may have sunk upward of $20 billion into this former ward of General Motors, an amount equivalent to $210,000 for each of the nation's public schools.'

So writes Dennis Berman in the Wall Street Journal. Imagine what Barney Frank will do with that! We can expect a quiet flurry of low-cost car loans in favored neighborhoods, such as the Fourth Congressional District of Massachusetts. There will certainly be loan quotas for low-income areas, suspected of red-lining by rapacious car dealers. There will be especially favorable terms for cars from those other quasi-government agencies, General Motors and Chrysler-Fiat. And perhaps subsidized loans for American-built cars generally, and for green cars that strike the president's fancy, and for.... Blue skies! -- Dan Ford

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