What to make of GMAC?

January 1, 2010 | By Jim Kim

We've spent most of our time discussing the TARP babies in the core banking industries--Citigroup (C) and Bank of America (BAC). AIG was a big part of the discussion as well. But equally sick is GMAC, as evidenced by the news that the government is taking a majority stake in a deal that boosts its TARP investment by another $3.8 billion. Cerberus Capital is the second largest stock-holder.

While the other TARP babies found ways to repair their balance sheets and income statements, GMAC lost $5.3 billion in the first nine months of this year. The biggest sore spots were home and auto financing. The hope here is that by taking some bitter medicine now in the form of asset sales of mortgages it can set the stage for another big recapitalization in 2010.

For more:
- here's an article from the New York Times