GMAC to post $10B loss after U.S. govt takes the wheel?
The money IV, though, hasn't come close to stemming the losses at GMAC – specifically its Residential Capital unit that was a subprime lending fiend not so long ago. The parent company looks to report a $10B loss for 2009 – its largest yearly loss ever – due to a fourth quarter loss of $5B, which also sets a company record for one quarter.
As to the wisdom of combining good money and bad, the government doesn't have a lot of choice: other bailed-out banks' lending practices would make Scrooge say, "Wow, that's stingy," and if GMAC goes under then a lot of GM and Chrysler dealers take fatal hits. Nevertheless, don't expect this year to bring better results: delinquencies will peak next year while home prices bottom out, and the government's subsidies for mortgage-holders will probably end this year. All of that probably equals a prognosis that could come from the Book of Cataclysm: "Let there be pain."
[Source: Business Week | Image: Craig Jones/Getty]
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