The Financial Bailout Fiasco

The Federal Reserve has agreed to reclassify GMAC Financial Services as a bank holding company, aiding the auto lender's effort to gain access to billions in government capital through the Troubled Asset Relief Program (700 Billion bailout fund). Analysts say GMAC may ask for about $6.3 billion.
GMAC
When the Fed on Wednesday made GMAC eligible to access part of the government's $700 billion bank rescue fund, it was contingent on the ailing auto and home loan provider completing the debt exchange.

The Federal Reserve apparently needed to see that bondholders were willing to inject more capital into GMAC. The bondholders needed reassurance that the Fed would approve GMAC's application to qualify for federal aid.

GM will sell some of it's shares to "an independent government-accepted trustee" who will hold some of the shares of GMAC until later when they could be sold (for a profit or loss). GMAC is also owner of Residential Capital LLC (ResCap) which the parent company bailed out in November.

The other large stockholder of GMAC is Cerberus Capital Management (owner of Chrysler) which will divest from it's once 51% ownership to below 33%.

More at:
(bailoutsleuth) http://bailoutsleuth.com/2008/12/is-gmac-next/
(AP) http://www.google.com/hostednews/ap/article/ALeqM5jJPN7qLHnYLcpayecFvBaK...