So is this the end of our economy as it previously stood?

[MrMatt]

Why would anybody invest significant capital into the system that the U.S. has set up at this point? Laws and contracts are openly and blatantly disregarded, and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now. It's like all these ultra-liberal retards are screaming 'stick it to the fat cats..hURRRRRR" and not realizing the government is making up the rules as they go along. It's not screwing the fat-cats, it's screwing the common man in a year or two. That's why the economy isn't going to recover. The constitution is being destroyed and shat on by the retard we (well 51%) of the country elected, as the supreme court looks the other way.

Now look at Chrysler. Secured bond holders are put behind nonsecured labor unions, all for the sake of winning votes next election, and garnering political power. You can't do that...I mean you just took an investment (in this case the secured bonds) and eliminated one of the main perks of them. Paying out a union in the Chrysler bankruptcy at 83%, while secured bond-holders get 17???? Are you shitting me?

How does ANYONE consider themselves a democrat at this point? I voted democrat in every election at every level over my entire life, and ran screaming when Obama was our candidate. I thought he'd make things worse, since Bush was a fiscal liberal, and Obama was too. But I ardently said after the election that people saying Obama would ruin the country, or end up shoving us into socialism were flaming fanatics. But for the love of all things sacred, what is he doing now??? What kind of smug liberal-douche would support what this overly-pious transparent jackass is doing? For the people that support things like the Chrysler sale and how it's orchestrated...have you EVER taken an economics course in your life? Do you have even the vaguest of notions as to how our economy is supposed to run?? I'm not flame baiting here, I just can't understand how ANYONE could support this horse-shit that's going on right now.

 

[Cuda1447]

Jpeyton will disagree, no doubt.

 

[JSt0rm]

Originally posted by: MrMatt
Why would anybody invest significant capital into the system that the U.S. has set up at this point? Laws and contracts are openly and blatantly disregarded, and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now. It's like all these ultra-liberal retards are screaming 'stick it to the fat cats..hURRRRRR" and not realizing the government is making up the rules as they go along. It's not screwing the fat-cats, it's screwing the common man in a year or two. That's why the economy isn't going to recover. The constitution is being destroyed and shat on by the retard we (well 51%) of the country elected, as the supreme court looks the other way.

Now look at Chrysler. Secured bond holders are put behind nonsecured labor unions, all for the sake of winning votes next election, and garnering political power. You can't do that...I mean you just took an investment (in this case the secured bonds) and eliminated one of the main perks of them. Paying out a union in the Chrysler bankruptcy at 83%, while secured bond-holders get 17???? Are you shitting me?

How does ANYONE consider themselves a democrat at this point? I voted democrat in every election at every level over my entire life, and ran screaming when Obama was our candidate. I thought he'd make things worse, since Bush was a fiscal liberal, and Obama was too. But I ardently said after the election that people saying Obama would ruin the country, or end up shoving us into socialism were flaming fanatics. But for the love of all things sacred, what is he doing now??? What kind of smug liberal-douche would support what this overly-pious transparent jackass is doing? For the people that support things like the Chrysler sale and how it's orchestrated...have you EVER taken an economics course in your life? Do you have even the vaguest of notions as to how our economy is supposed to run?? I'm not flame baiting here, I just can't understand how ANYONE could support this horse-shit that's going on right now.

those are your complaints. Now tell us how you would of handled it differently? Let the company go to chapter 7 and melt it down for slag metal?

 

[fskimospy]

Yeah, it shredded the Constitution so badly that every court which reviewed it decided it didn't.

 

[heyheybooboo]

Originally posted by: MrMatt
I'm not flame baiting here ...

Yes, you are.

The overwhelming majority of secured creditors approved the plan.

The plaintiff, the Indiana Pension fund, held bond(s) with a face value of $42.5 million (of a total $6 billion or 7/10ths of 1 percent).

They paid $18 million for the bonds.

They will receive $12 million.

 

[MrMatt]

Originally posted by: JSt0rm01

Originally posted by: MrMatt
Why would anybody invest significant capital into the system that the U.S. has set up at this point? Laws and contracts are openly and blatantly disregarded, and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now. It's like all these ultra-liberal retards are screaming 'stick it to the fat cats..hURRRRRR" and not realizing the government is making up the rules as they go along. It's not screwing the fat-cats, it's screwing the common man in a year or two. That's why the economy isn't going to recover. The constitution is being destroyed and shat on by the retard we (well 51%) of the country elected, as the supreme court looks the other way.

Now look at Chrysler. Secured bond holders are put behind nonsecured labor unions, all for the sake of winning votes next election, and garnering political power. You can't do that...I mean you just took an investment (in this case the secured bonds) and eliminated one of the main perks of them. Paying out a union in the Chrysler bankruptcy at 83%, while secured bond-holders get 17???? Are you shitting me?

How does ANYONE consider themselves a democrat at this point? I voted democrat in every election at every level over my entire life, and ran screaming when Obama was our candidate. I thought he'd make things worse, since Bush was a fiscal liberal, and Obama was too. But I ardently said after the election that people saying Obama would ruin the country, or end up shoving us into socialism were flaming fanatics. But for the love of all things sacred, what is he doing now??? What kind of smug liberal-douche would support what this overly-pious transparent jackass is doing? For the people that support things like the Chrysler sale and how it's orchestrated...have you EVER taken an economics course in your life? Do you have even the vaguest of notions as to how our economy is supposed to run?? I'm not flame baiting here, I just can't understand how ANYONE could support this horse-shit that's going on right now.

those are your complaints. Now tell us how you would of handled it differently? Let the company go to chapter 7 and melt it down for slag metal?

yes. That's the point of even a semi-free market.

 

[MrMatt]

or what about GM? We give them billions of dollars...and they go into Q status anyway

 

[alphatarget1]

Originally posted by: JSt0rm01

those are your complaints. Now tell us how you would of handled it differently? Let the company go to chapter 7 and melt it down for slag metal?

Secured bondholders should be paid first. That's how it has worked in the business world since the little instrument called "bonds" were invented.

My understanding is that we're on the hook if the union's pension funds run dry, so I'm not sure I have a good answer to what I would've done differently.

 

[sactoking]

"It was technically legal, the best kind of legal"- stolen and changed from #1.0 in Futurama

On the flip side, while technically legal it still is troubling in that an argument can be made that it effectuated a bypass of debt holders by allowing stakeholders to retain assets without fully repaying the debt holders.

Do I fault Obama, Geithner, et al? Nope, they gamed the system. Will I buy a Chrysler/Dodge/Ram? Nope, I choose not to purchase from Union-owned auto companies.

 

[Phokus]

and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now

yeah i wouldn't bet on that, sparky.

 

[Skitzer]

Originally posted by: Phokus

and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now

yeah i wouldn't bet on that, sparky.

True ......... there's a sucker born every minute

 

[MrMatt]

Originally posted by: Skitzer

Originally posted by: Phokus

and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now

yeah i wouldn't bet on that, sparky.

True ......... there's a sucker born every minute

This is true actually. The thing is, now that this precedent has been set, what kind of damage does it do to the bond market though? Even if there are some suckers out there, if a corp needs to raise capital, and doing so via bond is one of the main ways to this end...Wouldn't many investors now be leary of buying into bonds? I sure as hell wouldn't at this point.

 

[Phokus]

Originally posted by: MrMatt

Originally posted by: Skitzer

Originally posted by: Phokus

and NO ONE will invest capital and risk the feds changing the rules in the middle of the game as they're doing now

yeah i wouldn't bet on that, sparky.

True ......... there's a sucker born every minute

This is true actually. The thing is, now that this precedent has been set, what kind of damage does it do to the bond market though? Even if there are some suckers out there, if a corp needs to raise capital, and doing so via bond is one of the main ways to this end...Wouldn't many investors now be leary of buying into bonds? I sure as hell wouldn't at this point.

Somehow i don't think the bond market will be all that affected because i assume your average investor isn't a glenn beck whackjob that you sound like right now.

 

[alphatarget1]

Originally posted by: MrMatt

This is true actually. The thing is, now that this precedent has been set, what kind of damage does it do to the bond market though? Even if there are some suckers out there, if a corp needs to raise capital, and doing so via bond is one of the main ways to this end...Wouldn't many investors now be leary of buying into bonds? I sure as hell wouldn't at this point.

The Obama administration probably didn't think things through. Spread the wealth!

 

[jpeyton]

One of Chrysler's lenders, JPMorganChase, noted in court that the holders of 92 percent of the automaker's debt had agreed to the restructuring...

So greater than 9/10 of Chrysler's lenders agreed to the restructuring plan, but the OP doesn't care because...?

What I find absolutely hilarious is that Indiana (one of the 8% who didn't approve) spent $2 million in legal fees to avoid $6 million in losses. Nominate that one for FAILblog.

 

[MrMatt]

Originally posted by: jpeyton

One of Chrysler's lenders, JPMorganChase, noted in court that the holders of 92 percent of the automaker's debt had agreed to the restructuring...

So greater than 9/10 of Chrysler's lenders agreed to the restructuring plan, but the OP doesn't care because...?

What I find absolutely hilarious is that Indiana (one of the 8% who didn't approve) spent $2 million in legal fees to avoid $6 million in losses. Nominate that one for FAILblog.

Because the President is ramming it down their throats.

Here's the definition of a bond:

Bonds are debt, whereas stocks are equity. This is the important distinction between the two securities. By purchasing equity (stock) an investor becomes an owner in a corporation. Ownership comes with voting rights and the right to share in any future profits. By purchasing debt (bonds) an investor becomes a creditor to the corporation (or government). The primary advantage of being a creditor is that you have a higher claim on assets than shareholders do: that is, in the case of bankruptcy, a bondholder will get paid before a shareholder. However, the bondholder does not share in the profits if a company does well - he or she is entitled only to the principal plus interest.

To sum up, there is generally less risk in owning bonds than in owning stocks, but this comes at the cost of a lower return.


So you're telling me they WILLINGLY gave up this right? All for the privilege of being paid a lower return the whole time too? b.s.

 

[Lemon law]

Listen, Mr. Jerko OP MrMatt, Chrysler Copr went belly up bankrupt, all by its little lonesome, long before the Federal government intervened, and now face the facts, would it be better that they simply went belly up bankrupt, and then Chrysler would be no more?

Until our OP is willing to compare those apple to apple stark realities, our OP is and remains FOS.

 

[sactoking]

Originally posted by: jpeyton
So greater than 9/10 of Chrysler's lenders agreed to the restructuring plan, but the OP doesn't care because...?

He doesn't care about that point the same way you don't care about other points. Because you're both choosing to see what you want to see.

He sees senior debt holders getting less than dollar for dollar on their debt while the US (a non-secured debtor), the UAW, et al take control of the company. That is in violation of the principle of the BK system.

You see a small portion of secured debt holders that shouldn't be complaining because the vast majority of secured debt holders have signed off on the deal and if a "big boy" creditor thinks this is a good plan, a "little boy" creditor should too.

The reality is likely in the middle. Just because 90%+ agreed to the deal doesn't make it good. I'm under the impression that of that 90%+, much of it is owned by companies that elected or were forced to take TARP funds. It has been reported that the WH leaned on them HEAVILY to accept the deal. They likely wouldn't take the deal if their choices weren't so...... limited. Just because someone speculated on Chrysler debt shouldn't necessarily allow them to derail the whole thing. As the SC said, the petitioners were getting considerably more in this deal than they likely would in a pure liquidation. So, yeah, the reality is somewhere in between the two extremes.

 

[jpeyton]

Originally posted by: sactoking
As the SC said, the petitioners were getting considerably more in this deal than they likely would in a pure liquidation.

So the 8% petitioning were incredibly stupid as well.

 

[LegendKiller]

Extraordinary situations sometimes require extraordinary solutions. Plenty of bonds are still being bought and sold right now, the future of the capital markets is quite secure.

A bigger problem right now is with cases such as General Growth Properties (GGP), where collateral was allowed to be quasi-consolidated with the company, rather than kept in the securitizations as the documents, known case law, and legal structure, provide. If securitization structures were to undergo attack from unsecured creditors and potentially substantively consolidated, it could change the way the one of the biggest part of the capital markets work. However, I doubt anything will happen to alter history too drastically.

 

[First]

People will continue to invest in the U.S. because it continues to be, far and away, the most stable and just legal system in the world. The alternatives are worse or no better at absolute best. The idea that a few exceptions to this rule will discourage investment in any significant way simply because of extraordinary circumstances that happen a handful of times every 100 years, is quite inane.

 

[JS80]

Originally posted by: MrMatt

Originally posted by: jpeyton

One of Chrysler's lenders, JPMorganChase, noted in court that the holders of 92 percent of the automaker's debt had agreed to the restructuring...

So greater than 9/10 of Chrysler's lenders agreed to the restructuring plan, but the OP doesn't care because...?

What I find absolutely hilarious is that Indiana (one of the 8% who didn't approve) spent $2 million in legal fees to avoid $6 million in losses. Nominate that one for FAILblog.

Because the President is ramming it down their throats.

Here's the definition of a bond:

Bonds are debt, whereas stocks are equity. This is the important distinction between the two securities. By purchasing equity (stock) an investor becomes an owner in a corporation. Ownership comes with voting rights and the right to share in any future profits. By purchasing debt (bonds) an investor becomes a creditor to the corporation (or government). The primary advantage of being a creditor is that you have a higher claim on assets than shareholders do: that is, in the case of bankruptcy, a bondholder will get paid before a shareholder. However, the bondholder does not share in the profits if a company does well - he or she is entitled only to the principal plus interest.

To sum up, there is generally less risk in owning bonds than in owning stocks, but this comes at the cost of a lower return.


So you're telling me they WILLINGLY gave up this right? All for the privilege of being paid a lower return the whole time too? b.s.

I would be worried about the corp bond market if the govt did that to a non-union controlled company. But for now the market would view it as political, and for the most part companies that raise bond money aren't tied to unions.

True test is if Ford will be able to raise capital in the future.

 

[TruePaige]

Originally posted by: Evan
People will continue to invest in the U.S. because it continues to be, far and away, the most stable and just legal system in the world. The alternatives are worse or no better at absolute best. The idea that a few exceptions to this rule will discourage investment in any significant way simply because of extraordinary circumstances that happen a handful of times every 100 years, is quite inane.

You posted....exactly what I wanted to.

 

[alphatarget1]

Originally posted by: TruePaige

Originally posted by: Evan
The idea that a few exceptions to this rule will discourage investment in any significant way simply because of extraordinary circumstances that happen a handful of times every 100 years, is quite inane.

You posted....exactly what I wanted to.

Tell that to the investors/nations who are dumping US long term treasuries...

 

[Vic]

P&N never ceases to amaze me in how the people most passionately opinionated about politics, religion, and economics are invariably also the most ignorant.