George Bush's friends at Cerebus get more TARP money!

[Joanne98]

Dec. 26 (Bloomberg) -- General Motors Corp., days from receiving its first installment of at least $9.4 billion in U.S. aid, won another victory with the Federal Reserve’s approval of lender GMAC LLC’s bid to become a bank holding company.

GMAC’s shift to a bank eases the threat of a default that threatened to dry up credit for GM dealers who used the company to finance about three-quarters of their inventory. GMAC also handled loans for about 35 percent of GM’s 2007 retail buyers.

“This has a positive impact on GM and also the auto market,” Tatsuya Mizuno, director of Fitch Ratings in Tokyo, said today in a Bloomberg Television interview. “The problem is how they can prepare for next-generation vehicles, to restore their competitiveness.”

The Fed used emergency powers on Dec. 24 to grant GMAC’s bank conversion, citing turmoil in financial markets and the potential impact on Detroit-based GM as the biggest U.S. automaker taps emergency federal loans to stay in business.

GM gained 15 percent to $3.75 at 8:05 a.m. before the start of regular New York Stock Exchange composite trading. The shares plummeted 87 percent this year through Dec. 24, worst among the 30 companies on the Dow Jones Industrial Average.

GMAC’s bank transition was the second lift for GM in less than a week, after President George W. Bush said Dec. 19 that GM and Cerberus Capital Management LP’s Chrysler LLC were eligible for U.S. aid to help them avoid running out of cash by early next year. A Cerberus-led group owns 51 percent of GMAC, and GM owns the rest.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aqU_LI4XXgo0&refer=home