GMAC, which has already received a direct taxpayer donation of $13.5 billion, and has recently been accused of poaching depositors with higher rates than permitted by the FDIC, is turning to the very same FDIC with the hopes of now issuing FDIC-guaranteed debt. Never one to miss a well-engineered rally which JPM, MS and AXP already capitalized on and sold yet more shares at ridiculous valuations, Bloomberg reports that GMAC will be coming to market shortly with a TLGP issue. The notes, whose principal is unknown but capped by the May 21 permitted carve out of $7.4 billion, will have a December 2012 maturity, and will be underwritten by Bank of America Corp., Barclays Plc, Deutsche Bank AG and JPMorgan Chase & Co.
As all this taxpayer money will ultimately be funneled back to taxpayers who are naive enough to purchase either a bankrupt GM or a bankrupt Chrysler turbocharged plywood soapbox, it is safe to say that not much of it will be utilized and hopefully in 3 years, when GMAC faced chapter 7, taxpayers will be able to recover some of their cash. Of course, this is much more than can be said for Obama Capital Unlimited Liability Company's investment in GM and Chrysler.
The only real question is when will Merrill announce Simon Property's 3rd follow on offering in as many months. ZH readers are well aware of the asset "managers" who will be happy to gobble up the entire offering, and mark their books even higher in the doomed REIT sector.
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