Ally Financial Pulls a Teddy KGB

The channeling of John Malkovich’s Rounders character, Teddy KGB, is nothing new – I’ve written about the “I’m paying you with your moneyphenomenon multiple times.   Today, we got another example:

“Ally Financial‘s international operations are about to find a new home — with the lender’s former parent, General Motors.

Ally agreed on Wednesday to sell its European and Latin American businesses, as well as a share of a joint venture in China, to G.M.’s financial arm for about $4.2 billion.

The sale is the latest effort by Ally to raise money to help pay back its government bailouts, made to help prop up a company struggling under the weight of souring mortgages. The Obama administration pumped money into the firm as part of its bailout of the auto industry in 2009.

Since then, Ally has stabilized, largely by focusing on its online banking operations. But it remains largely a ward of the federal government, which owns about 74 percent of the company’s common shares and $5.9 billion worth of convertible preferred securities.”

Ahhh – I get it:  government owned Ally is going to repay the government by selling divisions to General Motors.    I wonder who owns General Motors?   Oh yeah… THE GOVERNMENT!   I put this into Microsoft Excel and got a circular reference error.

To be fair, the government owns 74% of Ally’s common shares, and only 32-odd percent of GM’s shares, so they’ve got that going for them…


disclosure: long $GM

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