The Long, Dark Teatime of the Holidays

As we sit at the keyboard, the rest of the Western world kicks back and takes some time off. The news services grind slower than usual; reporters are having a little eggnog with their vodka. This makes us twitchy: some of the greatest political coups d'etat have occurred when the holiday spirit permeates the air...the long, dark teatime of the year. Take the Federal Reserve Act of 1913... it was passed under the cover of darkness, after the majority of Congress had left for their Yuletide cheer. Who knows? As we type, a financial Kristallnacht could be going on without the slightest publicity...

What news we do see, though, is rather grim: retail traffic is down 24% year-over-year; the commercial real estate industry is whining for its bailout; the National Retail Federation wants a three-day jubilee on sales taxes; local banks are getting some hog slop from TARP; GMAC met with the elves at the Federal Reserve and was magically made a bank.

We wonder about GMAC's new status as a bank holding company. This company is, quite simply, a failed arm of a failed company of a failed industry. Not our idea of a good investment of the people's tax-dollars, and surely even the government must realise this. The details, though, are interesting: General Motors has to reduce its holdings in GMAC from 49% to 10%; Cerberus Capital must reduce from 51% to 33%. The 57% difference goes to an unnamed, independent 'trustee.'

This has deep implications: GMAC is now eligible for its share of TARP-feed... but the Fed's terms effectively cut off GM from the benefits of the gravy train. Cerberus won't get much of the money either, since the lion's share is going... somewhere. Hmmm, we wonder where. Were we the betting sort, we might be feeling lucky and put money on a former investment bank with the initials G.S.

But yet, we're heard that things aren't so bad: Turkey's PM is telling us this whole thing is just in our head. This would be funny, if the situation weren't so tragic. To quote Queen Victoria, we are not amused.