By on April 30, 2009

“Chrysler’s bankruptcy,” according to President Obama’s statement today, “is not a sign of weakness.” The goal is not to radically restructure the business of a firm that has been failing for decades and currently makes some of the least desirable vehicles on the market. No, for Obama and his task force, this is about going after evil speculators. After lauding the noble sacrifices of the UAW (which will own 55 percent of New New Chrysler), JP Morgan (recipient of $25 billion in TARP funds) and Daimler (who raped Chrysler in the first place), Obama glowers at the mean, nasty speculators who are “forcing” Chrysler into bankruptcy. “In particular,” explains Obama, “a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout. They were hoping that everybody else would make sacrifices and they would have to make none. Some demanded twice the return that other lenders were getting. I don’t stand with them.” So who are these shadowy money men who just won’t let Chrysler run free of their oppressive debts?

The Wall Street Journal reports that the holders of about $1 billion in Chrysler debt had offered to take 40 percent of their loans’ face value, and were “flatly rejected or ignored” by the ChryCo and the Treasury. These investors are calling themselves the “non-TARP” lenders, distinguishing themselves from the larger creditors like JP Morgan (which was praised for its “sacrifice” by Obama). Their argument is that, as first-lien creditors, they deserve the nearly 50 percent return they should see in a bankruptcy, an offer that the Obama administration wouldn’t match.  The “Non-TARP Lenders” also say that General Motors Corp.’s senior secured lenders are being left with 100% of recoveries, and that GM’s unsecured bondholders would receive a far better recovery than Chrysler’s first-lien secured lenders.

One of these self-centered, American-economy-killing bloodsuckers is profiled by the WSJ. Geoffrey Gwin, who invests on behalf of some 80,000 retirement accounts is torn between taking a haircut on behalf of his clients’ retirements and being labeled as an unpatriotic money-grubber. And his personal history makes the predicament even more poignant. “It’s very hard for me to deal with this,” Gwin tells the WSJ. “As horrible as the situation looks for Chrysler’s employees, I keep thinking about how horrible my own family felt when Delta was going to file for bankruptcy and my father’s pension was going to take a hit. No task force or the federal government came to his aid then.”

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41 Comments on “Presidential Task Force Shuns Non-TARP Chrysler Bondholders...”


  • avatar
    lw

    So once they actually file, the judge takes over… Should be interesting to get a profile of the judge..

    A conservative or liberal? Who appointed the judge? Bush? Clinton? Carter? Has he/she done anything this complex before?

    Was the judge in the middle of the planning to make it a quick bankruptcy?

    Now things get spicy…..

    Time to OPEN the books for all the public to see… Imagine the flurry of motions that will be filed in the next week or two!

    Maybe they can use the same judge that is handling Delphi. I hear that BK case is going to finish up shortly…

  • avatar
    no_slushbox

    I feel bad for the people whose retirement accounts are managed by Geoffrey Gwin because their retirement accounts are managed by an idiot who took such a large and undiversified position in Chrysler debt that he has to get into this much of a huff about what happens with it.

    Seriously, more time managing your funds, less time whining to the WSJ.

    Too bad Geoffrey Gwin’s investors don’t have federally insured defined benefits pensions like his daddy did.

  • avatar
    Luther

    “So who are these shadowy money men who just won’t let Chrysler run free of their oppressive debts?”

    They are hiding under your bed.

    Obama is a piece of work…Who does he think he is speaking to? These are not a bunch of programmable/idiot voters.

  • avatar
    Bubba Gump

    I don’t. people who don’t take an active role in managing their 401K’s deserve what they get. They could have sold those bonds months ago. Hello Mcfly!! Like mama says “Stupid is as stupid does” And if wall street takes a beating so be it. Remember their the guys that created this fiasco and the public went along fat dumb and happy. Deritaves and Credit Default Swaps my AZZ!
    You know the money people don’t want anyone messing in their business until the defacation hits the rotary oscillator then its all good.

  • avatar
    toxicroach

    If I were one of Gwins investors, and Gwin sua sponte decided to take a bigger loss than needed, I would sue his ass into a coma class action style and win without a doubt. He couldn’t take it, he knows he couldn’t take it, journalists who pretend he could have taken it are just trying to slime finance guys.

  • avatar
    Bubba Gump

    Roach thats an argument you won’t win with me. Not no way no how.

  • avatar
    mattstairs

    Holders of secured debt could always count on getting 100% of their principal back, since it was backed by collateral. Mr. Gwin should have had nothing to worry about.

    That is, until the Obama administration began undermining the bankruptcy laws.

    Now, unions seem to have a senior preferred claim over any other lender.

    Politically, the big TARP banks had to cave, even though they had a good legal case not to do so. Also, $ 1 billion to JP Morgan or any of those major banks is not a big deal. $ 50 million or even $ 10 million held for investors at a smaller firm is a much bigger deal.

  • avatar
    dbblg

    Goldman was dumping first-lien Chrysler debt at around 60 cents in April of 2008. Moody’s is currently estimating recovery value in liquidation at 20 cents; S&P between 30 and 50. Let’s be honest: the only investment case for holding Chrysler debt was a gamble that the gov’t would come in and write Chrysler a blank check without demanding even the pretense of viability. Hell, if the PTFOA had bowed to the considerable pressure from Dingell, Granholm, et al, and funded the restructuring plan Chrysler originally submitted, secured bondholders who bought in the aftermarket would be sitting pretty. Gwin is not asking for free-market capitalism. He just wants the gov’t to distribute welfare the way he had hoped it would.

  • avatar
    guyincognito

    I won’t shed a tear for the secured debt holders. It will be interesting to see who they are when this hits the courts. So, Cerberus conned them into financing their purchase of Chrysler and then they had to pay fees for Cerberus’ great money management on top of that, but at some point you have to be responsible for your investments. In the end they’ll get their taxpayer funded bailout anyway.

  • avatar
    Kevin

    Well. Remind me never to buy bonds of a company that is big enough, or has a powerful enough union, that the government may interfere with traditional private property rights in case of distress.

    You won’t need to remind me never, under any circumstance, to buy a Fiat/Chrysler. I’ll remember that.

  • avatar
    johnthacker

    I don’t. people who don’t take an active role in managing their 401K’s deserve what they get. They could have sold those bonds months ago.

    And someone else would have bought the bonds, so this problem would always exist.

    I suppose what you’re saying is “Stupid idiots, for believing that the law would be followed, even ordinary bankruptcy law.” They bought the bonds knowing that there was some risk, but also knowing that even in a bankruptcy they would be secured creditors and first in the line for debt. I suppose that they were supposed to assume that the government was going to decide to invest taxpayers’ money, jump itself to the head of the queue, and then give everyone from Daimler to the UAW precedent over the normal secured debt holders. The TARP banks are willing to go along with this because they’re getting taxpayer money shoveled at them from Geithner and the Obama Administration just as they were from Paulson and Bush. But the people that didn’t get anything from TARP?

    Yeah, they should have been diversified, and they should have seen some of this idiocy coming. I certainly understand them being pissed off about it, though.

  • avatar
    johnthacker

    Let’s be honest: the only investment case for holding Chrysler debt was a gamble that the gov’t would come in and write Chrysler a blank check without demanding even the pretense of viability. Hell, if the PTFOA had bowed to the considerable pressure from Dingell, Granholm, et al, and funded the restructuring plan Chrysler originally submitted, secured bondholders who bought in the aftermarket would be sitting pretty. Gwin is not asking for free-market capitalism. He just wants the gov’t to distribute welfare the way he had hoped it would.

    No, let’s be honest. While it’s true that the secured bondholders would have be best off with just free government money, they would still be better off with Chrysler getting absolutely no government whatsoever than the deal they’re getting now. If the Bush Administration had just let Chrysler go bankrupt before one dime of taxpayer money went their way, the secured bond holders would’ve gotten a better deal than this.

    So no, they haven’t benefited from the government largesse in anyway. Indeed, they’re paying for the company’s “rescue” just like taxpayers.

  • avatar
    no_slushbox

    toxicroach:

    You’re completely right; the fund managers have a fiduciary duty to make what, in their business sense, is the right call.

    Deflecting the bankruptcy to unnamed, anonymous bondholders is just a mix of politics and calling bluffs.

    Fund managers with the questionable judgement to have purchased Chrysler debt would do well to keep their annonymity instead of making a spectacle of themselves to the WSJ.

    mattstairs:

    Holders of secured debt could always count on getting 100% of their principal back, since it was backed by collateral. Mr. Gwin should have had nothing to worry about.

    That’s not at all how it works. Say I lend someone $100,000 to buy a house. I get a mortgage on the house to make my loan “secured”. Then that person does not make any payments. I spend $10,000 on foreclosing on and selling the house, and sell the house for $70,000.

    I am a holder of “secured debt”, but I only got $60,000, or 60% of my principle back.

    Now, imagine that my debt isn’t secured by something valable, like a house, but instead by Chrysler’s worthless assets (let’s see what those Jeep Compass stampings fetch at auction in a horrible automotive market).

    In liquidation Chryslers “secured” creditors would probably be lucky to get 20 cents on the dollar.

  • avatar
    Bubba Gump

    Unless you have been under a rock the last six months or in serious denial. It didn’t take a rocket scientist to understand that when the Government gets involved all bets are off. If the red light wasn’t big enough or bright enough people should be declared legally blind. Like I said before I don’t feel bad. I bailed out of all stocks and bonds back in July last year. I took a 1% total year loss while the Moguls on wall street took a 30% average hit and since they got their investment percentage from average Joe they stood by and let their investors accounts fall in some cases 70%. Therin lies the real injustice. By the way finance guys are about 1 step up from used car salesmen.

  • avatar
    toxicroach

    The bankruptcy petitions are online now:

    http://www.nysb.uscourts.gov/pdf/09-50002_petition.pdf

    They are incomplete, they filed emergency petitions. The completed filings aren’t due until 5/15/09 for Chrysler. Jones Day is the law firm. Corrine Ball is Chrysler LLC’s attorney.

    It looks like they filed emergency petitions for all of the Chrysler subsidiaries. So far no motions have been filed; major creditors lawyers are making their appearance.

  • avatar
    windswords

    Bubba Gump:

    “I bailed out of all stocks and bonds back in July last year.”

    Interesting I did the same thing, maybe about a month or two earlier. I switched my IRA, Roth, and SEP IRA from a business I had to money market funds. I left my current 401k in the market. It’s now a 201k, but I switched it to a MM. I’m making 1-2%, but that’s a lot better than others I know.

    Was there one thing that finally made up your mind to pull out?

  • avatar
    MikeInCanada

    Re Kevin :

    You may be making a better point then you realize.

    Now, the investing world knows without a doubt that to when doing business with a firm that has some connection to the Obama Treasury there is a significant risk that the traditional rules of business and lending will not be followed – if it is politically expedient.

    This is no small problem…..

    Why would anyone loan money (bonds, line of credit, corporate paper of any type) to either the ‘NEW’ GM or ChryCo if you have to worry about not only the normal business conditions (will they, can they pay me back), but will the Treasury step in and stick a knife in my chest.

    The new business model for these companies is dubious at best.

    What happens if new bond payments interfere with a VEBA payment 2 years form now? I wonder who is going to get paid?

  • avatar

    Finance people are just criminals who wear suits;

    -that aren’t orange [yet].

    As one of my (yes, finance) professors used to say:

    This cop catches a robber at the bank.
    The cop says to the robber, “Why’d you try to rob the bank?”
    The robber says,”Because that’s where the money is.”

  • avatar
    Robert Schwartz

    “Who appointed the judge?”

    Bankruptcy Judges are appointed by the Circuit Court of Appeals. In the case of a Southern District of New York Bankruptcy Judge, it would be the Second Circuit which has jurisdiction over New York, Vermont and Connecticut.

  • avatar
    dbblg

    …they would still be better off with Chrysler getting absolutely no government whatsoever than the deal they’re getting now.

    We’ll find out soon enough. If the holdouts seriously believe that recovery in Ch. 7 would be materially north of the 30 cents on offer (let alone the 65 cents they are claiming) they’ll submit supporting information to the judge and petition him/her to conduct a “best interest” test, comparing the Ch. 11 restructuring to what they would get in liquidation. The analyses I’ve found credible (like no_slushbox’s above) end up between 20 and 30 cents in liquidation, but we should have better information with which to construct a model shortly.

  • avatar
    Lumbergh21

    I feel bad for the people whose retirement accounts are managed by Geoffrey Gwin because their retirement accounts are managed by an idiot who took such a large and undiversified position in Chrysler debt that he has to get into this much of a huff about what happens with it.

    I feel bad for anybody whose money is managed by a “patriot” as defined by Obama, in other words somebody who throws away my money for the good of the country as defined by Obama. Why should he take less for his investors than they are entitled to under bankruptcy law? Just because Obama says he should?

    I don’t. people who don’t take an active role in managing their 401K’s deserve what they get. They could have sold those bonds months ago.

    They did, and other investors, like Mr. Gwins firm, bought them at a discount.

    Hello Mcfly!! Like mama says “Stupid is as stupid does” And if wall street takes a beating so be it.

    It’s not some nebulous “Wall Street” that’s taking a beating; most of this money is invested on the behalf of working people and retirees, and I doubt they would agree with your attitude towards them. I know that I don’t.

    Unless you have been under a rock the last six months or in serious denial. It didn’t take a rocket scientist to understand that when the Government gets involved all bets are off. If the red light wasn’t big enough or bright enough people should be declared legally blind. Like I said before I don’t feel bad.

    So the prudent thing to do is guess at how the government is going to violate the rules that they wrote? Even if I invest in gold, the government could declare it illegal to own gold and seize my investment. If you can’t count on the rules being followed, there is no way for you to play the game.

    Holders of secured debt could always count on getting 100% of their principal back, since it was backed by collateral. Mr. Gwin should have had nothing to worry about.

    That is, until the Obama administration began undermining the bankruptcy laws.

    Now, unions seem to have a senior preferred claim over any other lender.

    Actually, secured debt holders should be first in line when the company’s assets are sold. The bankruptcy judge could still declare that they only get a set percentage of the pie, which would likely be less than the face value of the debt that they hold. You are right though that the Obama administration is superimposing their collective will (OBama’s will) and pushing their way up to the front of the line and taking their friends with them. On top of that, they are taunting and calling the true investors names for trying to do what is right. That is an example of the new patriotism.

    MikeinCanada:

    Good points. I guess true patriots will still throw away their money where Obama tells them to, or the government will simply take it and give it to the people who shold have it.

  • avatar
    Landcrusher

    I am not a big fan of blaming the victim without pointing out who the villain is.

    Yes, these folks took bad investments, and did business with jerks, and should have known better. As should people who married abusive spouses and stayed with them after repeated abuse. However, in the latter case, we all should know that the victim needs tough love, but the villain needs hanging.

    In this case, our President is trying to send the lynch mob after the abused spouse who is daring to hold up the divorce because they want an equal share of the home and assets.

    I suppose being the President, he and his crew will be able to find a judge who sees it his way. The worst problem will be that no one will want to buy bonds at reasonable rates if they suspect the government might see the borrower as too big to fail. Once again, the victim will be Ford in the end.

  • avatar
    John Horner

    “If the Bush Administration had just let Chrysler go bankrupt before one dime of taxpayer money went their way, the secured bond holders would’ve gotten a better deal than this.”

    Can you provide any backup for this rather bold assertion? Liquidating Chrysler’s few assets into such a grim marketplace would hardly have been easy or likely to raise much money. Factories in the midwest, sub-standard car designs and such are hardly the kind of assets which bring good money at a going-out-of-business sale.

  • avatar

    johnthacker :
    April 30th, 2009 at 1:59 pm

    I suppose what you’re saying is “Stupid idiots, for believing that the law would be followed, even ordinary bankruptcy law.”

    You summed it up perfectly. During the congressional hearings on bailing out the car companies the economists warned about the danger to the system if the government can take cuts in line ahead of other creditors.

    The bondholders who forced Chrysler into bankruptcy are right to bet that a bankruptcy judge who doesn’t want to be overturned on appeal will give them a fairer shake than a progressive President eager to remake the United States into something more like Europe.

  • avatar
    paris-dakar

    So the prudent thing to do is guess at how the government is going to violate the rules that they wrote? Even if I invest in gold, the government could declare it illegal to own gold and seize my investment. If you can’t count on the rules being followed, there is no way for you to play the game.

    It’s shocking to me how some people can suggest in such a cavalier way that private investors should assume by default that the Federal Government is going to violate the principle of Rule of Law in service of political favortism.

  • avatar
    Lumbergh21

    Paris-dakar,

    If you look at the quote of Bubba Gump above my comment, you will see that I was questioning his assertion that the investors in the secured debt should have known better. I think it’s horrible that the governemnt thinks they can rewrite the rules according to the beliefs of whoever is in office at the time. I think that if you read the entire post, my position regarding the government’s – oh hell, I’ll just use the “O” word – Obama’s treatment of these investors is deplorable.

  • avatar
    paris-dakar

    @ Lumbergh21

    I know. I was expanding on the post. I thought you had it exactly right. God help us all.

  • avatar

    I suppose being the President, he and his crew will be able to find a judge who sees it his way. The worst problem will be that no one will want to buy bonds at reasonable rates if they suspect the government might see the borrower as too big to fail. Once again, the victim will be Ford in the end.

    I’m not sure that it necessarily the case. It’s possible that companies that avoid government entanglements may benefit in terms of their appeal to both consumers and investors.

    I’m sure that Ford’s legal department is looking at possible ways to challenge UAW/Government ownership of GM & Chrysler should Mullaly & co. decide that it’s in Ford’s interest to litigate.

    As for bankruptcy judges, a judge’s primary concern, greater than political ideology, is not being overturned. Bankruptcy law is pretty cut and dried. Bondholders would have a better shot in a bankruptcy than in a government clusterfuck.

  • avatar

    Fund managers with the questionable judgement to have purchased Chrysler debt would do well to keep their annonymity instead of making a spectacle of themselves to the WSJ.

    no_slushbox, at the discounts the bonds were trading at and the interest rates offered, they may still have been profitable. Assuming that they were diversified and high risk debt was only a part of their portfolio, it’s not necessarily questionable judgement.

  • avatar
    agenthex

    As for bankruptcy judges, a judge’s primary concern, greater than political ideology, is not being overturned. Bankruptcy law is pretty cut and dried.

    For all talk about the conspiracy to violate the law, which laws are being referenced?

    Again, just like the cluster of a thread that the UAW owns chrylers one was, it’s all based on clueless innuendo thus far.

    Perhaps this site can create one thread/post where all the stupid comments can go (like just ref’ed thread), and at least then it’s contained.

  • avatar
    Tom-W

    >>Well. Remind me never to buy bonds of a company that is big enough, or has a powerful enough union, that the government may interfere with traditional private property rights in case of distress.

    Even before Commissar Obama, I’ve long thought that investing in a unionized company (or industry) to be foolish. Perhaps as a short-term trade, but certainly not as a long term holding.

  • avatar
    toxicroach

    As far as I can tell, there have been no extra legal measures taken.

    Bond holders are unsecured. To repeat, they are unsecured! They just get first (or really high) priority of the unsecured creditors, which is almost, but not quite, like being secured. There’s a reason why they have junk bonds, and its because bonds are not secured. In bankruptcy, they are only as good as the unsecured assets to bond ratio of the company.

    The government took a secured interest in various items with its loans, something that apparently was not against the bond contracts, nor hardly unheard of.

    Obama tried to get them to volunteer to bend over, which they declined, and so now they will get whatever their share of the remains is worth in the inevitable Chapter 7. In fact, besides the credit default swaps, I think they’re probably going to do better than if the government wasn’t involved, since to get the assets out of the bankruptcy estate to sell to NewCo they are going to have to pay the fair market value. The FMV is subject to disagreement, so the easiest and fastest way to settle it is to pay a generous amount, and its not like Obama is a penny pincher.

  • avatar
    John Horner

    We have had several decades now of the hedge funds and bankers of various stripes having their way with the country. Bankruptcy laws got rewritten in their favor, tax laws got rewritten in their favor, banking regulations were rewritten in their favor, state usery laws got pushed aside, and so on. Meanwhile, private equity funds, hedge funds and junk bond funded raiders stripped the country of its manufacturing base and pushed most large companies in this country to have callous and reckless disregard for customer, suppliers and employees. The gospel of “shareholder value” was a lie, because it was really about hyper-short-term stock manipulation with little regard for building long term value, little regard for the majority of the workers who actually do what the company does (meanwhile skewing ever more of the financial rewards to the top), and little regard for the end customer.

    Count me as one of the people who is ready for the playing table to shift away from Advantage Bankers. Class warfare has been going on in this country for the past twenty years for sure … what is changing is that the financial overload class now only has most of the good cards and not all of them. Those )&(*&ers caused the majority of the problems we are stuck with right now. The fast-money boys with their fancy yachts and surgically enhanced mistresses have not done the country proud. The notion that the hedge fund speculators (who by the way didn’t lend Chrysler the money in the first place, but rather bought the bonds at a deep discount in the secondary market) deserve at least 50% return on the face value of their bond buys … is fantasy.

  • avatar
    Landcrusher

    John,

    I don’t care how worthless the bond holders are. I don’t care if they are all child molesters. Two wrongs do not make a right. If there is a problem with the laws, call your congressman.

    Letting the government trample property and contracts is no way to fix anything. The cure is worse than the disease.

    That being said, there is a real problem with the financial types failing to provide value in the system any more. It will fix itself eventually unless the government prevents it. They can only find a free lunch for so long, but every new law is just going to be a new thing to manipulate for these folks.

  • avatar
    stuki

    I doubt the Geithners and Obamas of the world would have balked at the slightly better terms required to keep these creditors mum. Compared to the money they are already spending, it would be chump change.

    More likely, the administration realises Ch11 is a requirement for shedding potential future legal liabilities, and in general letting the new company get off to an at least somewhat plausible start.

    But at the same time, it is not politically wise for a Democratic administration to be seen as choosing this route. They’re not supposed to be cold and cynical calculators. And they’re certainly not supposed to get themselves between multibillion dollar moneypots and their trial lawyer constituency.

    So, instead, let a few ‘greedy capitalists’ take the PR hit, while achieving the desired results. The new administration might not be staffed with the sharpest tools in the drawer, but they do seem to have a decent grasp of popular politics.

    Hence, I really doubt they are dense enough to truly be tripped up over a valuation diagreement over 10-20% of around $1billion in bonds. I mean, in Geithner’s world, that’s, what, about a half hour’s worth of dough?

  • avatar
    agenthex

    Letting the government trample property and contracts is no way to fix anything. The cure is worse than the disease.

    Certain posters can just be counted on to deliver the daily talking points.

    The funny is that the judicial system is quite part of the government.

    But I guess I can’t accuse the post for being totally inconsistent:

    -
    They can only find a free lunch for so long, but every new law is just going to be a new thing to manipulate for these folks.

    That’s true, laws that the government creates and enforces only criminalizes, uh, crime.

    I’ve thought conservatives were supposed to be hard on this stuff, but I see they have a soft spot for violators as long as they’re told to by talking points. That must be their weakness. Talking points.


    So, instead, let a few ‘greedy capitalists’ take the PR hit, while achieving the desired results.

    Baseless conspiracy theories seem to be the new gay bashing.

  • avatar
    menno

    Mikeincanada, you hit the nail on the head. As I’ve written before, most recently yesterday here at TTAC;

    Is the USA still a nation of Law? Or diktat? (As in this is the root word for DICTATOR).

    Here are some quotes from Bloomberg this AM:

    “OppenheimerFunds, based in New York, said it rejected the offers because the government “unfairly” demanded that the fund’s shareholders make greater sacrifices than were being asked of unsecured creditors.

    “Our holdings in secured Chrysler debt are entitled to priority in long-established U.S. bankruptcy law, and we are obligated to our fund shareholders to support agreements that respect these laws,” the company said in an e-mail.

    In the deal Chrysler tried to conclude out of court, Fiat would have become a 20 percent owner of Chrysler, and a union retiree health-care trust fund would hold 55 percent, with the rest of the company staying in the government’s hands initially, according to people familiar with the matter. The government intends to replicate this model, using bankruptcy to set up a new company, people familiar with the plan said.

    ‘Absolute Priority’

    Chrysler’s dissident lenders have on their side the “absolute priority” bankruptcy rule, which holds that value must be distributed according to the legal priorities of the stakeholders. What riled the group that put out the statement yesterday was that junior creditors — a workers health-care trust — would get equity in a new Chrysler entity while the group’s members wouldn’t.

    “Junior creditors are ordinarily not entitled to anything until senior secured creditors like our investors are repaid in full,” the dissidents said in the statement.

    The absolute priority rule is regularly modified in bankruptcy court, said Richard Hahn, co-chairman of the bankruptcy practice at Debevoise & Plimpton LLP, a New York law firm that isn’t involved in the Chrysler negotiations. Two- thirds of the lenders can force the holdouts to go along with them in a procedure called a cram-down.”

    With 70% of the creditors bent over, trousers at ankle level for President Goodwrench and Co, you’ll be seeing these “dissidents” more than crammed down. They’re now going to be public-enemy #1 in the eyes of the administration for not doing as they’re told, never mind “little matters” such as court precedence, bankruptcy laws, legality, rights… what are those?

    I guess I’ve answered my question as to whether we live in a nation of LAW or DIKTAT already, because we all kind of know, deep down, don’t we?

    You get what you vote for. You who voted for these guys and the prior administration get what you deserve. The rest of us who don’t like either choice get to suffer. Thanks a bunch.

    Bubba Gump, I also got out of the stock market with my 401k and went INTO bonds for about a year on the advice of gold-bugs, then on their same advice, I got OUT of bonds about 18 months ago and put most of my money into gold stocks and cash. I’ve lost very little compared to most of the folks who didn’t read/listen to the gold bugs.

  • avatar
    menno

    Lumberg21 said: “So the prudent thing to do is guess at how the government is going to violate the rules that they wrote? Even if I invest in gold, the government could declare it illegal to own gold and seize my investment. If you can’t count on the rules being followed, there is no way for you to play the game.”

    Yes. +1.

    Clearly we don’t live in a civil, lawful society any longer. Just as in America 1933, a mere week after the first Roosevelt socialist-fascist was elected and totally illegally declared that all gold must be turned into the government*

    If folks cannot see that, they have blinders on.

    THIS GOVERNMENT IS ILLEGITIMATE. It is as illegitimate as was East Germany.

    Increasingly the rest of the world (which also has the same problems of nebulous rule-following to one extent or the other) will catch on that the USA is essentially no longer that city on the hill where there was some standard of law which could protect their US investments.

    Can everyone see where this will lead? Think on it carefully.

    * Article 1, Section 10, US Toilet Paper – I mean – Constitution: “No state shall make any thing but gold and silver coin a Tender in Payment of Debt.” (i.e. “MONEY”).

  • avatar
    Lumbergh21

    Baseless conspiracy theories seem to be the new gay bashing.

    Agenthex, so I guess that makes you a new gay basher? Your the one stuck on “talking points”. I guess that means you think anybody who has a problem with the government kicking secured debt holders to the curb and taking company assets for themselves is a part of some right wing nut conspiracy. That we all get our “talking points” from our master(s). Quite honestly, I don’t even know who you think is telling us to post these “talking points.” What I post are strictly my views. I don’t listen to Rush Limbaugh (or any other talk show hosts), and I don’t watch FOX news (or any other cable station), as I don’t have cable TV. Maybe you think I receive my instructions by phone, email, or short wave radio.

  • avatar
    agenthex

    Is the USA still a nation of Law?

    They’re perfectly entitled to go to court over this, and if they have the law on their side, they’ll win (and it doesn’t look like they will given the precedent in the law).

    Perhaps you should should learn this whole legal system thing works first.

    -

    Agenthex, so I guess that makes you a new gay basher?

    Am I the one making up baseless conspiracy theories?


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