Another one bites the dust: US finance giant GMAC receives Govt funding

GMAC went from being an independent company under GM control to being owned by a Private Equity - Cerebrus - and now into the arms of the Govt.

It is sadly true that American companies, the largest in the world, part of the Fortune 500 Global largest companies, are slowly falling apart, one by one.

I do not think there were "unusual and exigent circumstances" to bail out GMAC. Hardly! We all knew the financial system of US has been broken for last several months with more such circusmtances occuring over the next few months. GMAC is just one of the many that have been bailed out.

Last night, on X'mas eve, it was announced that another Finance company, GMAC, one of the largest finance providers for car loans was allowed to convert into bank so as to be allowed to tap into Govt funds (aka bail out).

Recently, American Express (Credit Cards) and CIT Group also asked to become banks in order to receive Govt funding. Private bank of American Express was already sold off last year to Standard Chartered Private Bank. Also, Goldman Sachs and Morgan Stanley fell on their knees and accepted bail out from the US Treasury and agreed to become commercial banks and agreed for greater accountability and regulation.

All in all, I strongly believe that American corporations are falling apart and there were 153 Fortune 500 companies who were based in America last year in 2008. I would be keenly watching the new list of 2009 and be anxious to find out how many American companies remain on the Global Fortuen 500 list, after the market turmoil of 2008, especially the independent ones and not supported, owned or bailed out by the US Govt.

Source: Bloomberg
GMAC Will Become a Bank as Fed Bolsters U.S. Plan to Save GM