Comments for Obama to Secured Creditors: Drop Dead »
Posted By stephen-johnson 8 months ago in Business & FinanceAre you following the disembowelment of Chrysler’s secured creditors with an eye not just toward what it means for the moribund car company but for what it could do to the very concept of secured debt? Has it dawned on you what the consequences will be if the President gets his way and consideration is given to creditors not according to contracts, rules, and established legal precedents but according to which group is most politically favored? And do you believe the President advanced the cause of economic recovery by publicly excoriating “speculators” who once hoped to profit by lending money against hard assets to an ailing company?
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stephen-johnson8 months ago
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FTA:
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"Forget about the law for a moment. Forget about right and wrong. This exercise should be getting easier now that pragmatism is the basis of government policy, right? So think for a moment only about the pragmatic consequences of the administration’s reorganization plan.
Why would anyone lend money to heavily unionized companies knowing that if things went wrong, the president and his men could trash their security interests by executive decree, hold them up to public vilification, and subject them to future retribution by regulators?
Why would anyone buy the shares of TARP-backed banks or invest alongside them knowing that their executives have proven their willingness to sacrifice shareholders’ interests and throw co-investors under the bus any time the president snaps his fingers?
Why would foreigners buy the distressed debt of American companies knowing that this debt cannot be secured by law but only by political clout?
How is the Federal Government supposed to unwind its ownership in the growing number of companies it has nationalized if prospective buyers know that should things ever take a turn for the worse, Uncle Sam will be back demanding extralegal “sacrifice” in the name of “saving” jobs?
How is private credit supposed to “start flowing again” if the United States of America morphs into a caudillo-run kleptocracy whose explicit policy is to “empower the workers,” chasing ever higher poll numbers by demonizing the very people whose job it is to provide credit?
The fate of Chrysler and its workers pale in comparison to the wrecking ball that would be taken to economic order if bankruptcy judge Arthur Gonzalez approves the administration’s plan to give Chrysler’s secured creditors the shaft. And what prize will we-the-people get in return? A doomed third-rate car company majority owned by its militant union run by Italian management building congressionally designed “green” cars no one wants to buy financed by taxpayers into perpetuity because no private investor in their right mind will touch the company with a ten foot pole. Is this supposed to be economic policy or comic opera?" -
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nostalgia8 months ago
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"Why would anyone buy the shares of TARP-backed banks or invest alongside them knowing that their executives have proven their willingness to sacrifice shareholders’ interests and throw co-investors under the bus any time the president snaps his fingers?"
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Why would anyone even want to put their money in a TARP-backed bank?
Chrysler is going to fail and all of that taxpayer money will be thrown away
Appaerently Fiat is considering selling the Fiat 500 in the US - voted car of the year in 2008 in Europe
Would you drive one of these?
According to the German Auto Club:
In particular, the testers noted that the driver of the Fiat 500 was very vulnerable as the driver’s airbag can force the driver's head towards the A-pillar, which causes the upper body to come into contact with the steering wheel. ADAC also noted that the airbag burst shortly after deploying, and that the sheer force of the crash would have caused serious, life threatening injuries to the driver - especially in the neck, leg and pelvic areas.
http://www.youtube.com/watch?v=6pVF1Wr7GLQ-
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stephen-johnson8 months ago
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Most of those "eco-friendly" cars have abysmal crash safety records. But then again, the safety of car drivers and passengers isn't the highest priority of the green groups - Mother Earth is. In fact, to them, the fewer people on earth, the better.
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Natureboy8 months ago
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"Most of those "eco-friendly" cars have abysmal crash safety records."
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Lets turn that around.
The behemoth SUV that americans have been encouraged to drive is no safer for its passengers in a collision, but is about three times as likely to kill the other guy. And they are more likely to get into collisions in the first place, being more top-heavy and far less maneuverable.
Get the 7,000 pound juggernauts off the road and the "eco-friendly" cars will be much safer. As will everyone else.-
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stephen-johnson8 months ago
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"The behemoth SUV that americans have been encouraged to drive"
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Nobody "encouraged" Americans to buy SUVs - they did it on their own volition. And quite frankly, eco-friendly cars don't just crash into SUVs - they crash into regular sedans, trees, tunnel walls and guard rails.
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Klarissa8 months ago
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Someone please tell me where any elected government official gets the authority or power to tell a company it can or cannot declare bankruptcy, and tell a company what it must manufacture.
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I think that the Pres of the B of A should have told O to go ahead and fire all of them.
Was he really thinking of what was best for the bank, the employees, stock and bond holders, or was he out to save his own salary?-
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Natureboy8 months ago
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"Someone please tell me where any elected government official gets the authority or power to tell a company it can or cannot declare bankruptcy, and tell a company what it must manufacture."
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Gladly. Bankruptcy is a court proceeding, presided over by a judge who is by definition a government official. -
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Wolfie20078 months ago
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engineer
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The money Obozo is asking the banks to give away belongs to people who have placed their money with these banks for investment so by your reasoning because Chrysler took money from the government those people should just bend over and let the government take their money. You've got some kind of reasoning system there, maybe you should stick to driving your train or go to work for the government you'd fit right in there. -
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Georgia508 months ago
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Engineer,
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The taxpayers on whose behalf Obama has or claims to have given stimulus money have not been born yet. In fact, the money given them has not even been raised yet.
Would you like to receive birth announcements as they are born over the next 50 years?
(Memo to anyone with stock in an ink or paper (for currency) producer...might wanna make sure the federal gov't is paying for its ink and paper up front.)
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HOUSEMD8 months ago
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this is typical of king obama"s supreme knowledge in the automobile industry, and the banking industry, the health industry and the BS industry.... he will attempt to take over EVERYTHING just as any good tyrant would. he must be impeached for malfeasance in office since he is not following the rule of law and exceeding the authority of the office.
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Klarissa8 months ago
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They should have gone into bankruptcy immediately. The knew darn good and well the couldn never make it unless it was bankruptcy to renegotiate the union contracts.
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Either it was black mail or big payoff.
I read a while ago that WAMu is sueing because they were forced without recourse to work for a better price. -
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bubba28 months ago
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Under what "rule of law" did the 2008 Congress and Bush GIVE 750 BILLION dollars to the banks and to Wall Street with NO strings attached???
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The government - regardless of WHO is running it - should at LEAST be CONSISTENT in how they "hand out" bailout money to ANYONE that supposedly needs it.
You all are carping about the bailout for the auto industry because it is OBAMA that is managing it. You didn't do much carping when Bush agreed to the bailout for the banks and Wall Street.
If Obama was a Republican, would you still have the SAME opinions about what he is doing????
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antibrainwasher8 months ago
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Wait, non of you whining cons have thought to blame the unions, or maybe you did, but I missed it.
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Isn't it sad, to protect thousands of workers and their families you cons have swindled out of their work, that the government would step in, and make some casino capatilist gamblers take heavy losses.
Boo freaking Hoo, some billionaire who was banking on making a fortune off the collapse of Crystler will be losing his gambling money. Meanwhile, non of you thieving cons give a crap about thousands of workers who would be on welfare with out government protection.
Its always predictable on con circle jerks, make the rich richer, the only principle you cons give a crap about.-
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antibrainwasher8 months ago
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to hell with the industrial manufacturing base, its all about gambling speculation of free market capatalism, that's america, the right to pass money around and take a percentage as it flows upward in the ponzi scheme into the pockets of the billionaires you worship, like Murdock or the evangelical swine that pays your preacher, Oxy Limpballs.
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To hell with the workers or the middle, all that matters is the holy santicity of the billionaire gamblers and they place their bets for Crystler to fail or to make good so they can sell for a huge profit.
the only people that matter are the billionaires, welcome to the party of cons.-
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canadianrancher578 months ago
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My brother in law lives in windsor and was telling me last week that the employees in the auto plants down there have had a reduction of 19 dollars per hour in what I would call wages and yet I was told that the actual paychecks were still unchanged at 37dollars per hour, so most of the loss has been to benifits. I won't say that the executives or share holders haven't been to blame for this mess but the last time that the plants were looking for empoyees there were over 4000 people show up for about 25 positions, I think when we talk of the auto industry the it seemed to be a winning ticket for all involved right down to the dealers who sold the cars.
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On a seperate note, my wife won't allow me to own shares in anything anymore and I'm afraid that there will be hell to pay when she finds out that our government up here did the same as yours did, they went and bought into a car company with my money. -
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Endoscopy8 months ago
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Well the brain washed one and middle man have rung in with their usual rhetoric that leaves no doubt to their intelligence.
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There have been many times before this that the union wages in Detroit along with their legacy costs have been looked at as a problem. Detroit south has none of these problems. Now the government wants to change what is the law just by ignoring it. And these two do not understand that this is supposed to be a nation of laws. -
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nostalgia8 months ago
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What the Obama administration is not looking at are the possible long term consequences
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These lenders took a lower interest rate on their loans in exchange for the right to move to the head of the line for repayment should there be a bankrupcy
If the Obama administration is successful in getting this done and violating contract law, what private lender will ever loan a company in trouble money even if they get the same guarantee?
This would be a very dangerous precedent to set
The only entity that would be willing to lend money to companies in trouble would be the Feds -
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FrankHummel8 months ago
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I don't like the idea of violating the supposed sanctity of contractual agreements any better than anybody else. But I DO point out that if it has now become necessary to abrogate promises made to ANY group then it is appropriate to "spread the grief" EQUALLY. I would ALSO point out that the RESPONSIBILITY for all the pain really should be laid at the feet of those who have actually been guilty of having driven the "ship of state" onto the "shoals".
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It is more than a little bit exasperating to see these "secured creditors" squawking that somehow THEIR ox is being disproportionately gored --- by comparison to all the "lesser" folks who are now losing livelihoods, homes, medical care, and retirements. Many of these very people have been the "mainstay" supporters of "King" Georgie and his Crackpot Cabal of NeoConMen who are the dingbats who have SQUANDERED the considerable economic advantage that this nation not long ago enjoyed --- opting to "bet the farm" on MISBEGOTTEN policies aimed at perpetuating this nation's little "OIL empire" for a bit longer (instead of seriously pursuing the alternatives).
Though I'm not Jewish, I know enough about that culture to recognize that the cries of distress come across as testbook examples of what is known in Yiddish as "chutzpah": I murdered my mother and my father, so now, judge, have mercy on me as I am but a poor orphan...-
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Skeptic8 months ago
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Then why in the world should I lend you any money, regardless of the collateral you offer or your current credit rating?
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It appears to me that you are irresponsible and and do not care if your creditors get screwed. That is one way to make sure that the credit markets will no longer make money available to finance large investment or future growth. Then we can all share in the grief equally.
By the way, whoever told you that life is fair? -
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Georgia508 months ago
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"It is more than a little bit exasperating to see these "secured creditors" squawking that somehow THEIR ox is being disproportionately gored --- by comparison to all the "lesser" folks who are now losing livelihoods, homes, medical care, and retirements. Many of these very people have been the "mainstay" supporters of 'King' Georgie..."
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Yep. The UAW supported Bush and the GOP all along. Always has. Always will. And don't you dare let a neocon ever tell you otherwise.
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Georgia508 months ago
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When the little fish monger, Rasputin, and his thug boss Obama say something about "saving Chrysler," does anyone seriously think it's borne of love for the Chrysler Corporation?
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These two bit losers are out to save their pathetic loser union allies and nothing more. Fortunately for their abject stupidity, in trying to save the unions Team Knobama MUST fail because reality is not optional. -
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BB648 months ago
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Has anyone told Obama, he isn't a king and this isn't his kingdom to write whatever laws he wants concerning contracts? If he does this and gets away with it, that will destroy what little credibility we have when it comes to corporate bonds. But then again, in a communist nation, the government owns everything. Kind of what his majesty is trying to do now.
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