Poor GMAC

GMAC, the financing arm of FAILed car maker General Motors, has FAILed to magically turn itself into a bank holding company.

How does the financing arm of a failing auto maker ALSO deliver massive truckloads of FAIL? It decides to supplement its SUV loan business with some sweet, sweet subprime homeloan action.

Naturally, when you're an auto loan company like GMAC (or a credit card company like American Express, or a light bulb company like GE, or an investment bank like Morgan Stanley) and you're on the verge of BK, transforming yourself into a bank holding company so you can get your share of the taxpayer dollars being handed out via TARP or TALF is the natural progression of your business plan.

Sadly, today GMAC failed to raise the $30 billion in capital which was required to become a bank holding company, so it will most likely file for Chapter 11. Who woulda thought that you'd be required to raise money before you could ask for a handout? It's a strange, strange world.

I wonder, what's the notional value of all the credit default swaps written against GMAC's debt? I'm sure we'll find out soon enough.

Back on the rollercoaster.