"If your credit isn't good, General Motors Co. still wants to sell you a car.
The problem is, it can't. At least not in big numbers. That's why the automaker wants more control over its lending again.
GM's top North American executive Mark Reuss, under pressure to quickly sell more cars and boost GM's value as it gets ready to sell stock to the public, said a shortage of subprime lending is holding back sales in the U.S.
But the automaker's main lender, Ally Financial Inc., has little appetite for risky loans, having spent the last few years cleaning up its own financial mess caused mainly by its failing mortgage lending business. Both companies are majority-owned by the U.S. government."
Business Insider
This is why, in the end, businesses that aren't allowed to fail will eventually do so anyway. After the taxpayer has been forced to inject billions upon billions of new dollars, dollars created out of debt that will be repaid by generations yet unborn.
The automobile market was distorted by subprime lending. Just like any addict they shot as much cheap money into their arm as possible, creating a false world of sales and earnings that disappeared as soon as the drug was taken away. Now the reality of real life has kicked in and they want their drugs back.
The crack pipe business model that cheap money created fueled all the "too big to fails". Everything that they did was based on a drug fueled fantasy. Collapse of the business would have sobered them up and forced them to change their ways or die. Instead we've just given them something a bit less powerful to get them by; the addiction was never broken.
They want the illusion back. And it's not just the car companies. The banks and insurance companies are all living like nothing ever changed, investing and playing with our money, lining their pockets with bonuses and racking up gains on Wall Street. With these guys we never even tried the methadone. We just bought the heroin for them, kept them high, just like the old days.
The only solution for this is to let the market work. All of these "too big to fails" need to be cut off from their supply and allowed to sober up or die. If they sober up and make the changes needed to function in the real world and become productive again then that's great. However, if they can't live without the drugs then they should die. They will cease to be a drain on society and will create an opening for someone else to fill with new ideas and real capital.
We're not going to let them die. We're going to continue to stick a needle in their arm, injecting them with our money until they overdose and die. The end result is still death but this way they can take us with them.
And there's something else I'm wondering about. A couple weeks ago we were all treated to commercials on TV showing the Chairman of GM strutting around claiming that the company had repaid all the government loans, in full and ahead of time. That would seem to imply that they must be selling one hell of a lot of cars. If that's the case, why the problem with the subprime lending?
Or is somebody telling a little white lie?
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