So how do you guys feel about the Chrysler secured bondholders getting screwed?

I understand the Obama admin exerted pressure - and it makes sense for people to cave in the GM case when they were trying to avoid bankruptcy, but I don't understand the Chrysler situation.

If they were headed towards bankruptcy anyway, why would Chrysler executives accept a solution they didn't like? It's not like gov't money was saving their company.

Also, since they are going to bankruptcy court, what role does the Obama administration play at this point? Isn't it entirely in the hands of a bankruptcy judge?

 

Why are these groups challenging the government bailout of Chrysler?

 

They're still making out better than the American taxpayer, who apparently won't see any of their money again.

 

I have talked about this extensively in the D&D -- and yes, it is in my opinion worse than anything Blago ever did. The unions delivered the votes for Obama, and now he is literally rewriting bankruptcy law and contract law in an effort to reward the unions. The US credit system will literally grind to a halt if liens are not respected and if politicians can advance their social and political agenda in favor of the lawful rights of banks. This move is fraudulent.
If a bank's collateral is now up for grabs amongst the unsecured creditors, then how will they ever have the confidence to lend? What a dangerous, dangerous precendent this is. Unreal.

GM is now a healthcare company that makes a few cars on the side.

The Obamabots are so stupid that there is ZERO chance of them understanding this issue. Their collective ignorance makes for great political cover for Obama.

 

yes, obama told the union after he tries to bailout chrysler, chrysler will go bankrupt, and then fiat will then step in and he will give most of whatever is left to them.

yes, i'm sure banks will stop lending, I mean it is the way they make money, no need for them to keep lending

 

This is interesting and new to me. Generally I think that we the taxpayers are bailing out Chrysler which is a closely held company and
therefore I think that is correct to give preference with the tax payer's money to the tens of thousands of workers who have given their life to the company and taken pay cuts and Chrysler stock for doing so . We also have the perhaps hundreds of thousands of retired Chrysler workers.

Robbie and Jorge talks about "bond holders". Who are we talking about? I don't think it is ma and pa kettle who took their $5,000 life savings and bought some Chrysler bonds. We may be talking about the Wall Street speculators that took the company private, ran it into the ground and now want government money with no strings attached. What is going on?

Anyone with any knowlege?

 

They are secured bondholders, who traditionally are first in line to receive their money back. Some of the major bondholders are Yale University, Halliburton, Bill and Melinda Gates Foundation, and the University of Kentucky. But it doesn't matter who the bondholders are... What matters is that they are secured bondholders and that term is now losing its meaning. This is absolutely ridiculous and unprecedented move. Obama calling hedge funds "speculators" and saying that they were "refusing to sacrifice" is ironic, considering he is also asking them to borrow money and purchase other troubled assets.

EDIT: And the creditors are not responsible for bringing Chrysler down. That is mostly due to poor management and uncompetitive wages.

 

The bond holders are the firemen, policemen and teachers of Indiana who have invested their retirement money in these bonds, through the state's treasury department.

You are so utterly clueless.

 

The answer is both, there are plenty of retired auto workers who are also bond holders. Significant portions of their retirement savings will be wiped out.

 

You know this is about follow the laws right? This is still the United States last time I checked.

 

I would object to this as well. If you want to give preference, give it the the Feds who put taxpayer money in in the first place. Don't take tax money from 300 million people and give it to a couple hundred thousand.

I'm not too concerned about the other bond holders. I don't think this deal will rip the fabric of existence or anything. They'll probably sue the government later and, if their claim has any merit, they will get some kind of decision that will preserve the rights of secured bondholders. But, I don't think it is as simple as "bond holders should be in line in front of the union." They need to make some kind of deal with UAW if the company is going to continue to function at all. I do think it is more simple to say the Feds should be in front of the bondholders, but whatever.

 

law or precedents? serious question

 

And if the Obama administration wants to say that these are extraordinary times in order to justify changing the rules, they can stop bad mouthing the previous administration for using the same excuse for interrogation.

The law is the law.

 

While I have not seen a list of all bondholders, it is possible that your typical Ma and Pa Kettle were among the bondholders. Most bonds are held by various institutional investors like pension funds, endowments, and mutual funds. If you have a good mix of stocks and bond funds, then you probably at some point owned Chrysler bonds, whether you knew it or not.

 

I saw a story on a guy who did invest his $700K retirement in GM or Chrysler bonds. don't remember which.

 

law, I am pretty sure secured bondholders have legal rights to the underlying collateral that was used to secure the loans. Which should take precedent over the unsecured bondholders.

 

Analogy fail - the government using its clout as a lender/shareholder in relation to corporate creditors is not the same as the government violating the Constitution, Geneva Convention etc.

if you wanted to come up with a good analogy for the torture case, the Obama Adiministration would unilaterally compel federal judge to dismiss the case, and then set up a secret bankruptcy court abroad and have it enforce its own decisions - this isn't what happened at all.

 

The basic situation seems to be that the Federal Government provided a sum of money, which essentially flowed to the Unions and parties rather than the secured bondholders.

Would the secured bondholders have been better off if the Federal Government doesn't provide such a sum of money? I'm thinking the consequence of that is the Fiat transaction does't happen, Chrysler's assets get liquidated piece by piece, the Unions, employees, etc. end up far worse off... But would the bondholders been better off mathematically?

 

a fool and his money are soon parted, etc