Seems GMAC will not meet the requirement to became a bank holding company…do you think they will go bankrupt?
strangedays Wrote: ------------------------------------------------------- > Seems GMAC will not meet the requirement to became > a bank holding company…do you think they will go > bankrupt? i think so … i’m short GM equity
tough call because of how integrated they are with the GM dealerships. I don’t see how you give capital to the automakers and not shore up the finance arms at this point.
Don’t make titles of your threads like this… “Goldman Sachs Fails” “GMAC goes bankrupt” At least put a question mark at the end.
homie Wrote: ------------------------------------------------------- > Don’t make titles of your threads like this… > > “Goldman Sachs Fails” > > “GMAC goes bankrupt” > > At least put a question mark at the end. Anyway may be this is the answer 
I agree with BudFox’s logic. I recently bought a few GMAC bonds way below par and waiting for it to mature in May. Who really knows at this point what will happen with GMAC.
willchan11 Wrote: ------------------------------------------------------- > I agree with BudFox’s logic. I recently bought a > few GMAC bonds way below par and waiting for it to > mature in May. Who really knows at this point what > will happen with GMAC. What are they yielding? I’ve seen several GMAC bonds above 150%.
Deal not definitely not getting done. Tough to say when bankruptcy may take place, assets roll of quickly.
accountant23 Wrote: ------------------------------------------------------- > Deal not definitely not getting done. is this accounting speak for it will get done? double negatives can be confusing… not sure if that was on purpose…
Even if GM doesn’t get financing by Friday, I think they can stick it out to January 21st or even as soon as the new Congress comes on board. They can last until then. Crazy how stupid people in Congress are. A GM failure will lead us into a depression.
I’m not sure it makes a difference if GMAC lasts until 1/21. A new Congress isn’t going to change the rules for becoming a bank holding company or pass special legislation exempting GMAC from those requirements (at least I still have enough faith to believe they won’t). I think this whole thing is bizarre. How can a financing company be begging for money because they need cash? That pretty much means that they can’t conduct their core business so they’re toast anyway. Someone is going to try to float some plan about spinning off and bankrupting ResCap which won’t work (a faith thing again). We will argue about that for awhile but then GMAC is done.
Say what you see! [bad money] [good money]
I’m not sure if this is possible but they may have the option of sending ResCap into bankruptcy without bringing down the auto financing business. A few years back when ResCap was the golden child, GMAC restructured the mortgage businesses to be separate from the auto-financing business so they could receive their own credit rating. Obviously, the entire company is in trouble but I wonder if that restructuring would allow GMAC to send ResCap into bankruptcy without it affecting GMAC as a whole.
ConvertArb Wrote: ------------------------------------------------------- > accountant23 Wrote: > -------------------------------------------------- > ----- > > Deal not definitely not getting done. > > > is this accounting speak for it will get done? > double negatives can be confusing… not sure if > that was on purpose… Sorry. Bond exchange is not through yet and can be extended. This is a distressed exchange so some gamemenship here.
JoeyDVivre Wrote: ------------------------------------------------------- > I’m not sure it makes a difference if GMAC lasts > until 1/21. A new Congress isn’t going to change > the rules for becoming a bank holding company or > pass special legislation exempting GMAC from those > requirements (at least I still have enough faith > to believe they won’t). I think this whole thing > is bizarre. How can a financing company be > begging for money because they need cash? That > pretty much means that they can’t conduct their > core business so they’re toast anyway. > > Someone is going to try to float some plan about > spinning off and bankrupting ResCap which won’t > work (a faith thing again). We will argue about > that for awhile but then GMAC is done. Fed makes rules for bank holco’s.
EquityResearchGR Wrote: ------------------------------------------------------- > I’m not sure if this is possible but they may have > the option of sending ResCap into bankruptcy > without bringing down the auto financing business. > A few years back when ResCap was the golden > child, GMAC restructured the mortgage businesses > to be separate from the auto-financing business so > they could receive their own credit rating. > Obviously, the entire company is in trouble but I > wonder if that restructuring would allow GMAC to > send ResCap into bankruptcy without it affecting > GMAC as a whole. This is true
I thought GMAC had already started putting ResCap to bed.
I believe that GMAC bonds are likely more relatively discounted than similiar maturity Ford Credit bonds. As a 50% operating subsidiary of GM [Ford Credit is a direct arm of Ford Motor] GMAC is relatively sheltered from an all out GM bankruptcy. A judge may not necessarily drag GMAC into court if GM were to file [another way you see this is GMACs trading at $75 to par while Fords are at like $64/$65]. Valuations aside, I don’t think a GM bankruptcy is eminent [or is it imminent?] but anyways at $75 the bonds are being priced as though 25% of the underlying car loans WILL default. Seems pretty steep this late in the cycle don’t it? I mean this whole mess really started in 2006. Willy
Well, tomorrow will be telling.
WillyR Wrote: ------------------------------------------------------- > I believe that GMAC bonds are likely more > relatively discounted than similiar maturity Ford > Credit bonds. As a 50% operating subsidiary of GM > GMAC is relatively sheltered from an all out GM > bankruptcy. A judge may not necessarily drag GMAC > into court if GM were to file . Valuations aside, > I don’t think a GM bankruptcy is eminent but > anyways at $75 the bonds are being priced as > though 25% of the underlying car loans WILL > default. Seems pretty steep this late in the cycle > don’t it? I mean this whole mess really started in > 2006. > > Willy Seems more imminent to me. Our eminent Senators gave them the FU.