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.
...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.
Labels: Automobiles, Bailouts
