(H/T – Van Helsing)
If you thought the Chevy Volt was a bad deal, wait until you get a load of this. I present the lede from Bloomberg’s story on Government Motors buying subprime lender AmeriCredit Corp. for $3.5 billion:
General Motors Co., the automaker 61 percent owned by the U.S., is buying subprime lender AmeriCredit Corp. for $3.5 billion to help it reach more customers with leases and loans to borrowers with faulty credit records.
A couple points of order:
- Where, exactly, did Government Motors get the $3,500,000,000 to pay a 24% premium for a company?
- Isn’t the bubble of the subprime lending market, something Government Motors explicitly said it would restart, a major contributor to the Double-Dip Dempression we’re in?
Quoting American Enterprise Institute’s John Berlau, “When we bailed out GM, what were we bailing out? The rationale behind the financial-regulatory bill that just passed was that subprime lending was bad, but the government’s in the subprime business.”
