Another Bailout for GMAC? Seriously?

From Clusterstock:
Tim Geithner’s getting ready to shovel more taxpayer money down the rat hole, this time to GMAC.

GMAC, in case you’re in understandable denial, has been bailed out twice already.

And now Tim Geithner wants to shovel another $2.8 billion in.
What is the US taxpayer getting in exchange for all these GMAC bailouts?

Preferred stock.

Why are we getting preferred stock, which is neither a claim on the future upside of the company’s equity, nor a senior debt security that will be completely repaid in the event that taxpayers finally get mad as hell and won’t take it anymore?

Because Tim Geithner is worried that if he makes the folks who voluntarily lent money to GMAC — the bondholders — lose so much as a cent, the entire US economy will collapse.

Unbelievable. Sooner or later something has to give. And when it does, it won’t be pretty.

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