Elizabeth Warren: GMAC did not pose a systemic risk

Courtesy of Edward Harrison at Credit Writedowns

So why did we rescue this institution with a massive bailout? Elizabeth Warren, who chairs the Congressional Oversight panel of the TARP program, doesn’t understand any more than taxpayers do. This is another example of the malinvestment and zombie finance which bailouts have fostered.

Here’s a question for you: if GMAC was a U.S. auto financing company, why was it speculating in mortgage finance… in Spain? That’s what I was asking back in July:

I would love to know what GMAC is doing in the Spanish mortgage market. Considering GMAC just got a second bailout in May, American taxpayers have the right to know what GMAC is doing and where.

Wrong country, wrong industry segment. It’s good to see Elizabeth Warren asking similar questions about the need to bailout GMAC in the video below. It runs six minutes.