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Post by jeffolie on Sept 12, 2007 14:42:56 GMT -6
GMAC desparate and borrowing $21.4 Billion Some housing bubble news from Wall Street and Washington. BBC, “Finance firm GMAC has had to take out a $21.4 bn loan as it becomes the latest lender to reveal the impact of the US sub-prime mortgage crisis. GMAC, which has borrowed the cash from Citigroup, said boosting its financial flexibility was ‘a prudent measure’ in the current market environment.” “GMAC’s struggling home lending unit, Residential Capital, lost $254m in the three months to the end of June. A key problem is that sub-prime loans are often repacked into wider debt groupings which are then resold. This means that no-one is yet quite sure of the full impact of the woes.” news.bbc.co.uk/2/hi/business/6990822.stm
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Post by unlawflcombatnt on Sept 12, 2007 18:51:38 GMT -6
It's interesting that Citigroup was willing to loan them the money. Citigroup is in big trouble with SIVs, and may have to put some of these off-balance-sheet debts onto their balance sheets, further reducing available capital for loans.
Is Citigroup just trying to dig themselves a deep enough hole to necessitate a Fed bail-out?
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