Thursday, July 22, 2010

GM is buying Americredit? what about paying back US Treasury ?

GM which was taken over by the government and is 61% owned by the US Treasury and has yet to payback the Treasury is buying Americredit. Americredit is a sub-prime lender. Does this make any sense? Should auto companies be in the finance business or should it focus on cars? To have a good car company you need a good finance arm to extend credit but one of the excesses in credit over the last 20 years has been in the auto area. Credit has been extended at looser terms and for longer periods which may be the exact thing the government would like to reduce.

While i do not like to comment on politics, this one made me stand-up and notice.

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