Post by The Big Dog on May 6, 2009 15:42:02 GMT -5
There is, as might be expected in a deal this size, a lot of backstory surrounding the recent filing by Chrysler Corporation for bankruptcy protection. While I've seen it mentioned here and there, and legitimate investors excoriated as greedy, eeee-vil capitalists who must be punished, your government is being somewhat less than forthcoming.
Much of what the government is forcing on Chrysler, and it's investors, violates just about every tenet of financial and investment practice going back centuries... aside from screwing investors royally while giving the unions a sweerheart deal, comparatively speaking.
And shall we talk about Bank of America as well? The bank regulators used a set of assumptions in their recent "stress test" that they say shows BofA has a $34B negative exposure if things should just happen to get worse. BofA insists it is fine and is still trying to give back the TARP money that they never asked for and didn't want. But, inevtiably, I am expecting Secretary Geithner (that guy who couldn't get Turbo Tax right) to announce that more drastic measures are needed... that the preferred stock in BofA that the government has acquired through TARP needs to be converted to common, hence, voting stock... which would make the government the largest single shareholder in BofA.
Now who am I to believe? Corporate officers bound by trust and the law to tell their shareholders the truth at pain of being jailed... or faceless, untouchable, unaccountable government bureaucrats advancing a political and socialogical agenda?
It was a dark and evil door that Bush, with the help of Hank Paulsen, Ben Bernanke, Tim "Turbo Tax" Geithner and a panic riddled Democrat Congress intent solely on papering over it's own egregious mistakes, opened last year. Now Obama, aided by Geithner, Bernanke and a Democrat Congress which has settled firmly on a course of elitism and arrogance, is swiftly taking us ever deeper into that ever darkening chamber.
God help us if there is a hole in the floor of that room... because you progressives are going to look really stupid standing on a bread line with a wheelbarrow full of worthless paper currency and your "Obama 08" stickers decorating your cars. That assumes, of course, that you will have received some government furnished gas to get your car down to the bread line in the first place.
I dare just one of our progressive or left leaning members to come into this thread and have an honest, fact based discussion without onoce resorting to "Obama is fixing the mess that Bush left".
He is fixing it by making it worse, in many ways and at many levels. And all you Obamunists are too damned star struck to see what's going to happen.
[/url]
By: Michael Barone
Senior Political Analyst
05/05/09 7:11 PM
Last Friday, the day after Chrysler filed for bankruptcy, I drove past the company’s headquarters on Interstate 75 in Auburn Hills, Mich.
As I glanced at the pentagram logo I felt myself tearing up a little bit. Anyone who grew up in the Detroit area, as I did, can’t help but be sad to see a once great company fail.
But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”
Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.
This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.
After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.
<< snipped >>
Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.
The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.[/quote]
Much of what the government is forcing on Chrysler, and it's investors, violates just about every tenet of financial and investment practice going back centuries... aside from screwing investors royally while giving the unions a sweerheart deal, comparatively speaking.
And shall we talk about Bank of America as well? The bank regulators used a set of assumptions in their recent "stress test" that they say shows BofA has a $34B negative exposure if things should just happen to get worse. BofA insists it is fine and is still trying to give back the TARP money that they never asked for and didn't want. But, inevtiably, I am expecting Secretary Geithner (that guy who couldn't get Turbo Tax right) to announce that more drastic measures are needed... that the preferred stock in BofA that the government has acquired through TARP needs to be converted to common, hence, voting stock... which would make the government the largest single shareholder in BofA.
Now who am I to believe? Corporate officers bound by trust and the law to tell their shareholders the truth at pain of being jailed... or faceless, untouchable, unaccountable government bureaucrats advancing a political and socialogical agenda?
It was a dark and evil door that Bush, with the help of Hank Paulsen, Ben Bernanke, Tim "Turbo Tax" Geithner and a panic riddled Democrat Congress intent solely on papering over it's own egregious mistakes, opened last year. Now Obama, aided by Geithner, Bernanke and a Democrat Congress which has settled firmly on a course of elitism and arrogance, is swiftly taking us ever deeper into that ever darkening chamber.
God help us if there is a hole in the floor of that room... because you progressives are going to look really stupid standing on a bread line with a wheelbarrow full of worthless paper currency and your "Obama 08" stickers decorating your cars. That assumes, of course, that you will have received some government furnished gas to get your car down to the bread line in the first place.
I dare just one of our progressive or left leaning members to come into this thread and have an honest, fact based discussion without onoce resorting to "Obama is fixing the mess that Bush left".
He is fixing it by making it worse, in many ways and at many levels. And all you Obamunists are too damned star struck to see what's going to happen.
[/url]
By: Michael Barone
Senior Political Analyst
05/05/09 7:11 PM
Last Friday, the day after Chrysler filed for bankruptcy, I drove past the company’s headquarters on Interstate 75 in Auburn Hills, Mich.
As I glanced at the pentagram logo I felt myself tearing up a little bit. Anyone who grew up in the Detroit area, as I did, can’t help but be sad to see a once great company fail.
But my sadness turned to anger later when I heard what bankruptcy lawyer Tom Lauria said on a WJR talk show that morning. “One of my clients,” Lauria told host Frank Beckmann, “was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”
Lauria represented one of the bondholder firms, Perella Weinberg, which initially rejected the Obama deal that would give the bondholders about 33 cents on the dollar for their secured debts while giving the United Auto Workers retirees about 50 cents on the dollar for their unsecured debts.
This of course is a violation of one of the basic principles of bankruptcy law, which is that secured creditors — those who lended money only on the contractual promise that if the debt was unpaid they’d get specific property back — get paid off in full before unsecured creditors get anything. Perella Weinberg withdrew its objection to the settlement, but other bondholders did not, which triggered the bankruptcy filing.
After that came a denunciation of the objecting bondholders as “speculators” by Barack Obama in his news conference last Thursday. And then death threats to bondholders from parties unknown.
<< snipped >>
Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.
The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.[/quote]
