Thursday, April 02, 2009

GMAC Resumes Subprime Auto Lending

I would be really, really gratified if just a few of my readers would leave a comment here telling me that I'm not the only one who's completely pissed off by these continuing examples of Our Cultural Financial Idiocy:

Reuters: GMAC Angling for Low FICO Buyers Again

From the article:

The finance company plans to resume accepting finance applications from car and truck buyers who have credit scores below 620, a line dividing prime borrowers from less creditworthy subprime borrowers. The median U.S. credit score is 723, according to Fair Isaac Corp's myFICO unit.

The irony here is downright looking-glass-ish: A government with no money is borrowing money to loan to a company with no money, who in turn plans to loan that borrowed money to customers who have — wait for it — no money. (All based on the sale of quickly-depreciating assets, even.)

The fact that our economy now absolutely depends on a ramp-up and further pile-on of just this sort of self-defeating, debt-based consumption in order to not implode does, to me, speak volumes.

Not a day goes by that I, as a guy who's working hard to "do it right" financially, don't feel like I'm being slapped in the face.

I'm really, really tired of it. (And by the way, though I work for a GM-centric auto group, I will never purchase a GM-branded vehicle. Ever.)

While we're at it, let's talk Fannie and Freddie, too, via Bloomberg:

The U.S. Treasury injected $46 billion in emergency funds into government-controlled mortgage-finance companies Fannie Mae and Freddie Mac.

...The Obama administration and Congress have been leaning on the government-sponsored enterprises to help lower mortgage rates and loosen lending requirements even as the two suffer record losses on their existing mortgage investments.

When it gets to the point that even a moderate rise in interest rates brings the economy to a screeching halt (we hit that point long ago), and when the Powers That Be are forced to cram "easy credit" into all channels and manipulate credit markets at every turn just to keep the train on the tracks ... well, that's where we are.

There's a reason that all fiat currencies tend to crumble at some point — usually taking governments with them.

But I'm sure ours will buck the trend.

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— Posted by Michael @ 8:15 AM


Don't worry, you aren't the only one who feels this way. I think I have passed the initial "this is so infuriating" phase, and have reached the "has the government lost all rational thought" phase. I'm still angry, but now I'm more shell shocked & just absolutely demoralized by what I see now. I'm still plugging along though, controlling what I know I can control--my own finances. At the same time, I'm hoping someone's head will pop out of their butt in Washington. But I'm not holding my breath.


I completely agree with you....these people (GM & GMAC) are idiots! I work in the auto business and deal with GMAC daily. They want to continue poor lending practices and helping to put people into cars they cannot afford....but why would they care, the us tax payer is there to bail them out. I guess it means that someone with proven bad credit will be getting the same rates as the person who has worked hard at building a strong credit profile buy managing their finances. I can see it now: New credit standards for GMAC financing...if you have a heart beat you are approved. Some things never seem to change.


No, you're not the only one who is angry about this. I just ordered "Atlas Shrugged" and it is amazing how the novel traces what is happening in America now. And it was written 50 years ago. I'm only about 1/3 through it but the producers are punished by the government for their productivity. Sound familiar? I also live in Oklahoma and am so thankful that Senator Tom Coburn speaks out about the ridiculousness of all of the proposed wasteful spending.

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