New York Mag Profiles Ex-Car Czar Steve Rattner
Published: August 3rd, 2009
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A little insight into Rattner’s past, his high stakes poker with Chrysler’s bondholders and his fall from grace (a fixer too far). New York magazine presents at least one interesting factoid. Apparently, the Presidential Task Force on Automobiles (PTFOA) was deadlocked at “4-4 on the issue” of whether or not they should save Chrysler ( page five). Huh? I was under the impression it was a twenty-five member mob. So assuming the Quadrangle guy was part of a quorum, it was Steve “Chooch” Rattner, Ron Bloom (now head of the PTFOA) and who else?
More by Robert Farago
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This is quite a nice insider piece. So apparently the creditors knew well their property was worth maybe a billion. Rattner thought they would settle for 1.5, and ended up offering 2 billion for everyone to save face. One of the holdouts bought at 0.15, and played the game to see how much taxpayer money he could squeeze out of it. Maybe the Holdouts as Saviors of Capitalism folks can pitch in with their analysis.
"Buying" debt at 15c on the dollar so they can make a profit on the rescue????????? WTF? That system is broken. Why is it possible to speculate/gamble on the outcome of settlement moments before it was decided? The US should consider a major reform. The minute GM/Chrysler said they needed rescue (Nov), trade in their securities/debt should be able to be suspended. No more gamblers can come onboard to fleece or protract an outcome for other creditors. It might also make "investors" think more clearly about WHAT they are purchasing and take a more pro-active interest in the business (GM/Chrysler) they are getting involved with.