No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Government Motors earning its TARP keep

by @ 18:41 on July 27, 2010. Tags:
Filed under Business, Politics - National.

(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.”

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