Cerberus Indigestion with GMAC?s ResCap

BusinessWeek highlights the ills that mega-hedge fund Cerberus has faced with its poorly-timed investments in GMAC's ResCap and Chrysler.  Cerberus, which just pulled out of a deal to buy H&R Block's Option One mortgage unit, invested heavily in ResCap and watched it hemorrhage cash for the last two quarters.  Chrysler hasn't been doing much better; and the hedge fund is getting battered with higher costs of borrowing and renewal of its short-term debt financing as the credit crunch rolls on. I think this article does a good job of showing how much of a pyramid the entire credit market really is.  When Bernanke was talking about containment of subprime mortgages he was clearly ignoring the dangers that belie the credit market house of cards.  The problem with cr