Credit Worries Swirl Around GMAC

Cerberus Capital Management may be celebrating its historic acquisition of Chrysler after turmoil in the credit markets delayed the deal, but no champagne is flowing for the private-equity firm's other landmark purchase in Detroit.

GMAC, the finance arm of General Motors (GM Quote) that is 51%-owned by Cerberus, is facing worries in the derivatives markets about bankruptcy at its mortgage-lending unit. The price of credit protection for GMAC's mortgage business, Residential Capital, or ResCap, soared by more than $100,000 a year on Friday, as measured by the credit default swaps market.

"ResCap is trading like it could fail sometime this year," says Justin Monteith, an analyst with KDP Investment Advisors, though he adds that he doesn't expect that to happen. ...