Tuesday, December 23, 2008

More companies lining up for piece of bailout fund

Like you couldn't have seen this coming from a mile away.
Meanwhile, financial industry groups are pushing to use the bailout fund to help a wider array of companies, including automotive financing companies such as GMAC Financial Services. GMAC is 51 percent owned by Cerberus Capital Management LP, a private equity firm; General Motors owns the rest.

GMAC, which provides financing for GM vehicle and dealer loans along with home mortgages, is having trouble finding adequate support from its bondholders for a debt transaction that would allow it to become a bank holding company and gain eligibility for bailout money.

Commercial real estate developers said Monday they also are petitioning the government for support from the $700 billion rescue fund. The Real Estate Roundtable said an estimated $400 billion of commercial real estate mortgages will come due by the end of 2009 without adequate refinancing options.

Industry officials said thousands of office buildings, hotels, shopping centers and other commercial buildings could be headed into foreclosure or bankruptcy unless the government provides support.
Once you start giving away free money, everyone wants a piece of it and given the nature of Democratic politics, all you have to do is show how it will affect some preferred victim group--the poor, the minorities, the unions, or any other Democratic "constituency."

I don't blame companies for this, they are simply reacting to the situation. Of course, given the situation, not one of them will actually do anything to correct their behavior which has led them to this point, but why should they, Obama and Barney will be there to help them out.

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