Commence Offloading

Dumping the assets. Once upon a time, this would be known as a fire sale. Bloomberg (07.26.05):

"General Motors Corp. agreed to sell as much as $55 billion in car and truck loans to Bank of America Corp. over five years, giving the automaker another source of financing as it struggles to stem losses from making autos. Bank of America, the second-biggest U.S. bank, will buy $5 billion immediately and purchase as much as $10 billion in each of the five fiscal years from July 2005 to June 2010, the companies said today in a statement. The $10 billion represents as much as half of the GM auto loans available for sale each year, said Joanne Krell, a spokeswoman for General Motors Acceptance Corp." GM to Sell Up to $55 Bln in Loans to Bank of America

"The sale may lower borrowing costs for General Motors Acceptance, which generates most of GM's profits." Speculation is that BoA is "probably is paying a premium of up to 13 percent for the loans." Why a premium? High interest rates!! "Credit card and auto loans are attractive for their high interest rates, which create wide spreads against consumer deposits". Considering BoA is paying 0.5% on their passbook savings, it wouldn't take much to create a nice spread. A very nice spread indeed.