DiTech. Is GMAC Really Smart ?

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bltserv_IHB

bltserv_IHB

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<p>Well its just hitting the wires. I am sure some good links will get posted. Next time you are watching that pesky DiTech commercial. Remember "People Are Smart". Guess Ditech might need some help. GM is going to to take a 39 Billion Dollar hit.</p>

<p>This was once a startup in Irvine by Paul Reddam. He sold it off to GMAC.</p>

<p>So lets see. Between Citi and GM we lost 50 Billion reported this week. Thats a bad week IMHO. Ouch.</p>

<p><a href="http://www.nytimes.com/2007/11/07/business/07auto.html">http://www.nytimes.com/2007/11/07/business/07auto.html</a></p>
 
I have not personally seen them but I heard it is pretty bad.





I can't wait till the 1Q08 and see what the write downs will be for these guys.
 
IC

You are correct $1.6 to the bottom line.

But tucked neatly on the balance sheet is the $ 39B allowance to take a loss

on the "paper" that is a corporate asset. And in reading more it seems GM is getting ahead on the curve

by taking the "Write Off" now so as not to create the perception that it did not expect these losses.

Basically taking the mark to market vs mark to model hit now. They are holding a ton of paper thats worth

.20 cents on the dollar. They too look at the ABX. They are doing now what Citi should have done up front and Country Fried and other lenders have yet to do.
 
bltserv - GM did take the 39B loss. It did hit the bottom line. They set up a valuation allowance against the deferred tax assets, which could get reversed into earnings in the future if the generate enough income to use up the deferred tax assets.
 
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