We knew it was going to happen, it’s not like there was any question is GMAC was going to become a bank. If they did not achieve bank status GMAC would have gone into bankruptcy, which would have meant that GM would have not been able to obtain credit for consumers through any other source.  

Get it?  

If GMAC went down the tubes, GM would have followed.  The second GM received their “loans” GMAC was almost guaranteed to receive bank status.  It is all tied together.

So why does the Fed continue to work with their head up their collective asses? GMAC lost roughly $5.5 billion during the first 9 months of 2008 and major losses are expected moving forward. The additional $6B provided by the TARP funding will only allow the company to operate for a few more quarters.  

Maybe that was the intent of the government – put GMAC into a position where they can support GM until the new administration is in office, and where the new government has the ability to implement their own bailout. 

Frankly, I don’t understand how either GM or GMAC make it out of 2009 without going into some form of Bankruptcy restructuring.  They are both bleeding money like there is no tomorrow, the government continues to prop up businesses that should be failing on their own.

Anyone care to bet?

It was just a matter of time WaMu was either shut by the government or sold (in this case both happened).

In the largest bank seizure of all time, rougly 310 billion in assets, the FDIC stepped in and closed WaMu down but did not need to use insurance funds as the FDIC was able to broker a deal in which J.P. Morgan purchased Washington Mutual assets for 1.9 billion dollars.  As a result, JP/Chase will write down roughly 31 billion in bad mortgages WaMu had owned.

The J.P. Morgan/Chase purchase of Washington Mutual’s retail banking business, which is incredibly strong, is a huge victory for the bank.  In the long wrong this purchase has the ability to give JPM a HUGE retail footing and grow into territories previously unavailable to the bank.

Nothing like waiting to the last second – Lehman Brothers, at 1:21 AM ET, says that it was unable to find a buyer for the firm and that it intends to file for Chapter 11 bankruptcy.

With this news, which was expected, the sale of Merrill Lynch to Bank of America, and markets are falling around the world in response to the Lehman, as well as a crashing dollar, Monday will be a very interesting day on Wall Street.