Banking, finance, and taxes
GMAC: An Explosion In The Boiler Room For Cerberus
Published:
Last Updated:
Cerberus has invested billions of dollars into the US auto industry. Its best-known deal was its purchase of 80% of Chrysler. That investment is probably worth nothing. Its other highly visible deal was the acquisition of 51% of GM’s (GM) financial arm, GMAC.
News on earnings from GMAC indicates that it may be worthless as well.
According to Reuters, "Finance company GMAC LLC lost $2.52 billion in the third quarter, hurt by the housing slump and vehicle lease writedowns, and said its mortgage unit, one of the nation’s largest home loan providers, may not survive." What happens to ResCap, the mortgage operation? No one knows.
GM reports GMAC earnings at part of its own quarterly filings. Whether it has liability for ResCap’s liabilities is not clear. Nor is the extent to which Cerberus is one the hook.
A lot of private equity and venture firms are in very deep trouble. Cerberus may be one of them.
Douglas A. McIntyre
Essential Tips for Investing (Sponsored)
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
