The free market system, or is it any more, with the government now the largest stockholder in GMAC.  Here we go again with the government buying in to yet another major corporation, you may ask yourself how does this effect business and the stock market. Well go figure with the governments continued involvement in major auto makers and banks and financial companies the ripple effect will be felt coast to coast. You may ask yourself how can other companies compete with the federal government or the companies they are vested in, and if the government has selected companies to back is it really a free market any more or are we already becoming a socialist society under Obama. GMAC has received $13.5 billion so far and is looking to receive another $3 to $4 billion this time, wow, what are they thinking or are they really considering the implications of investing billions in another failing financial institution.

In an interview Adam Steer of Credit Sights questions why GMAC needs the money, as the losses GMAC is claiming are not from the automotive sector of the company rather from ResCap which is a failing home lending sector of the company. Steer suggest that GMAC cut ties with the home lender or put ResCap in bankruptcy rather than pouring billions into the failing company.

The CFO of the GMAC Robert Hull even stated they need to find a solution for ResCap as they are facing their eighth bad quarter as of November, while GMAC’s automotive sector is showing a profit. The question is why when ResCap has had eight failing quarters in a row is the government going to invest billions more to save a failing organization. An more to the point if the automotive sectors of GMAC are showing a profit, why are they not bailing out ResCap rather than putting their hand out to the US government and tax payers again. Could it be that the government is sitting there with an open check book and offering money to anyone that ask for it with not thought of the implications to the future of the country and our free market system or capitalist society.

Some have stated making a credit line open to GMAC would be smarter that continuing to give aid package after aid package, as we would be throwing less taxpayer money away at a time.  In our so called free market system under the Obama administration the government is now the biggest owner of GMAC with a 35% stake in the company, go figure when the US government also owns aproximately 10% of General Motors as well.

You may wonder why I am taking time to educate you on the goings on of our wonderful government under Obama and the latest bailout news, well its because with all the continued bailouts and buyouts GOLD is the safest investment with the best return. So buy GOLD and buy as much as you can as it will continue to soar for some time to come.

You may remember that I have kept you posted on the Bank of America SEC investigation,and how they misled shareholders regarding the Merrill Lynch deal. Bank of America deal with the SEC regarding these charges for $33 million, has been rejected and Bank of America executives are due to be charged regarding their improper activities in the Merrill Lynch deal. The charges regarding the bonuses paid to Merrill Lynch executives and not disclosed to share holders is going to go to trial despite Bank of America executives claiming they relied on attorneys advice on what they disclosed to share holders.

The Attorney General of New York Andrew Cumo’s office will be the filing the charges against the Bank of America Executives, regarding improper disclosure of bonuses to Merrill Lynch executives and that Bank of America almost backed out of deal after considering Merrill Lynch bonuses and bottom line profitability. Bank of America and the SEC thought they had this sensitive case behind them, and now in these trying financial times when Bank of America took TARP monies to stay a float, and then paid these huge bonuses without disclosing them thus misleading shareholders many are outraged as I am. The SEC will have to build a case against Bank of America regarding their misconduct and handling of this deal, and the huge bonuses paid and not disclosed to shareholders will come to light. I am sure many will wonder as I do how can Bank of America think it is okay to pay these huge bonuses, and not disclose them to share holders, shortly after they took huge amount of TARP monies to even stay in business.

Bank of America still claims they did not violate any disclosure rules, though if that were true would they have tried to settle for $33 million with the SEC regarding the issues regarding the Merrill Lynch deal. Bank of America is claiming that they were pressed into agreeing to the SEC settlement, though they are still claiming innocence and that they did nothing improper regarding not disclosing the huge bonuses paid to the Merrill Lynch executives as part of the purchase to share holders.

The Attorney General Cuomo’s office is looking to file civil charges against the Bank of America executives, regarding the Merrill Lynch deal and the fact they did not disclose information to the share holders regarding the huge bonuses they were offering Merrill Lynch executives as part of deal.
How can we let Bank of America spend the TARP funds we gave them so foolishly and then simply claim they did nothing wrong when we have evidence that they did not disclose these bonuses to Merrill Lynch executives. Bank of America is also one of the banks that is the slowest to respond to their customers regarding the huge number of failing mortgages as part of the federal program to assist home owners in trying to keep their homes.