GMAC's mortgage unit ResCap bonds were trading as if a pending bankruptcy announcement was imminent. Today ResCap offered to buy back $750 million of bonds at a premium to where they were trading, but at 83 or 76 cents on the dollar.
ResCap, as of Sept 30, had a tangible net worth of $6.2 billion, but they are required by debt covenants to maintain a net worth of $5.4 billion, and by purchasing these bonds at a discount, it increases their tangible net worth. They've bought themselves time, and if they could acquire Northern Rock at a distressed price, ResCap would be in a position to profit when housing turns.
One of the bear's thesis for a mortgage meltdown has now been averted.