GM Lending Arm Pumped Up

General Motors' (GM Quote) lending business is the only thing keeping America's largest automaker from falling into the abyss. So it's unnerving to see this finance arm, called GMAC, report low-quality first-quarter earnings.

In the first quarter, GMAC -- short for General Motors Acceptance Corp. -- earned $729 million, while GM's auto business lost $1.83 billion. On a consolidated basis, then, GM lost $1.1 billion, or $1.95 per share.

The company had warned investors that the loss was coming, but not until mid-March. Up to that time, it was telling investors to expect earnings of $4-$5 per share in 2005. Now the company says it expects to make just $1-$2 per share. ...