The Fitch Shrug

I lamented on the GM buy of AmeriCredit last week.

http://tradersutra.blogspot.com/2010/07/why-is-gm-buying-americredit.html

I don't know whats worse? Is it the GM purchase? Or this?

http://finance.yahoo.com/news/Fitch-SP-place-AmeriCredit-on-apf-2678917317.html?x=0

Just a little background for the cave dwellers we call the electorate.

GM is in bankruptcy. It is only doing business because of the kindness and stupidity of the tax payer. GM wants to come out of bankruptcy and complete fraud by doing an IPO as soon as possible.  GMAC the equally incompetent former lending arm of GM which also has been propped up by the tax payer was brought down by sub prime pending. Lets be clear GMAC had  residential real estate subprime problems. Their auto lending wasn't as bad, so the media/analysts are spinning this buy as a smart move for GM. GM is buying Americredit because they need to fatten their books with loans because no one will buy their cars otherwise. The other thing here is that auto dealers have been exempted from any regulation in the recent FINREG bill. This is a perfect time for GM to swoop down and pull the wool over everyone's eyes.

I thought this was the worst thing I heard last week....until I heard Fitch was completely dumbfounded whether this buy was actually good for Americredit? They are unsure of this helps or hurts? Unbelievable!

I giant incompetent auto company with nearly $75B in cash and investments wants to pay a premium (IN CASH) for an equally incompetent auto lender and Fitch is completely clueless to figure out if this good or bad?

The US Treasury pushed for this deal. They do not want GM to be a private company. They need positive press and to dress the IPO as best as possible. If New Century and Long Beach Financial were still around I am sure Geithner would be pushing for GM to buy them too.

Lets figure this.

GM doesn't care. Its not their money.
Treasury doesn't care. Its not their money.
Americredit insiders are jumping for joy as they get cashed out.
The Tax Payer doesn't care because they are too busy watching Big Brother.

This is the state of America in a nutshell.
And they tell me I am too cynical.