But Then You Came to My Bailout Rescue

Feel like owning a car company? Me neither, but it's not like we have much of a choice.

General Motors and Cerberus Capital Management have asked the U.S. government for roughly $10 billion in an unprecedented rescue package to support a merger between GM and Chrysler, two sources with direct knowledge of the talks said on Monday.

The government funding would include roughly $3 billion in exchange for preferred stock in the merged automaker, according to one of the sources, who was not authorized to discuss the matter publicly.

The U.S. Treasury Department is considering a request for direct aid to facilitate the merger and a decision could come this week, sources familiar with the still-developing government response said earlier on Monday.

An injection of $3 billion in equity to support a GM acquisition of Chrysler would be roughly equivalent to the current, depressed value of the top U.S. automaker.

That last paragraph is worth a re-read.

If everything in this country that's "too big to fail" is bailed out by the federal government, with cash injections equivalent to the market value of the crappy company, what will be left? And how much will it be worth?