Do you happen to think it odd that GMAC is asking for ANOTHER financial life line only days after Capmark Financial went belly up?

In a stark reminder of how some battered financial firms remain dependent on government lifelines, GMAC Financial Services Inc. and the Treasury Department are in advanced talks to prop up the lender with its third helping of taxpayer money, people familiar with the matter said.

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said. The latest infusion would come in the form of preferred stock. The government’s 34% stake in the company could increase if existing shares eventually are converted into common equity.

Seeing they retained 25% ownership in Capstone, GMAC was abound to take a hit.

Recently the FDIC stated the United States needs to move beyond the concept of “too big to fail.” Even the Treasury also got into the mix; however, it seems that no one in the government is serious about the situation. If the administration was, wouldn’t they stop throwing funds at these worthless banks?

Oh, that is right, GMAC will get more funding because they finance GM purchases.

GMAC going back to the well also raises the question of  how long before others will head on back to Uncle Sam for a check?

I’m not saying, I’m just saying.

I was wondering when someone was going to point out that the small banks (or companies) that did not get bail-outs can not compete against those that obtained government funding.

Ironically, it is the FDIC head that points this out:

Community banks are coming under intense pressure from a crumbling commercial real estate market, a weak economy — and lop-sided competition with banking goliaths deemed too big to fail, FDIC Chairman Sheila Bair said Monday.

…

‘Too big to fail’ has become worse,” Bair told USA TODAY. “It’s become explicit when it was implicit before. It creates competitive disparities between large and small institutions, because everybody knows small institutions can fail. So it’s more expensive for them to raise capital and secure funding.”

When will “too big to fail” end?

Does the fact that FDIC Chairman Sheila Bair says “too big to fail” must end act as a warning to anyone?

Another perspective on the bail-out subject – Will other industries experience the same results?  Will Ford be able to, ultimately, compete against a government backed GM?