Treasury Kicks GMAC's Tires, Offers $6 Billion

Another day, another bailout! This time the lucky cash-hole is GMAC, the financing arm of former Detroit employer General Motors.

Seems GMAC — which is 51% owned by hedge fund Cerberus Capital Management, which also owns Chrysler — managed to lose almost $8 billion in risky subprime mortgage investments over the past year and a half.

It's like the old saying goes. They break it, you buy it…

The Treasury Department is injecting $5 billion directly into GMAC in exchange for preferred equity shares that pay an 8% dividend. GMAC also is issuing warrants to Treasury in the form of preferred stock. If exercised, the warrants will pay a 9% dividend.

Also, the government will lend $1 billion to GM that the automaker will invest in its financing arm.

But that's not all — have you seen these cupholders?

The GMAC investment commits Treasury to total bailout spending above the $350 billion limit so far by Congress.

Treasury has some wiggle room because $79.5 billion that it has allocated for purchasing stakes in banks has not yet been distributed. Regulators are still reviewing applications from many institutions.

They'd better hurry up. I hear the wiggle house is headed for foreclosure.