LSFan00 Posted April 23, 2009 Share Posted April 23, 2009 So King Barack the Mild is finding as he tries to dictate the terms of what amounts to an out-of-court bankruptcy for Chrysler and GM. He wants Chrysler's secured lenders to give up their right to nearly full recovery in a bankruptcy in return for 15 cents on the dollar. They'd be crazy to do so, of course, except that these banks also happen to be beholden to the administration for TARP money. Wasn't TARP supposed to be about restoring a healthy banking system? Isn't that a tad inconsistent with banks just voluntarily relinquishing valuable claims on borrowers? Don't ask. Kingly prerogative also conflicts with kingly prerogative in the case of GM's unsecured creditors, who are the sticking point in agreeing to a turnaround plan by the drop-dead date of June 1. His retainer, Steven Rattner, has delivered word that the king's pleasure is that these unsecured creditors give up 100% of their claims in return for GM stock. It may also be the king's pleasure, he advised, to convert at some point the government's own $13 billion in bailout loans into GM stock. There's just one problem: Why on earth would GM's creditors -- who include not just bondholders but the UAW's health-care trust -- want any part of this deal? Link Here. Anyone remember when in Nov/December some on this board thought the bailout would be best for GM, America, and workers alike because it would provide stability and new competent leadership could be demanded by the politicians in charge of keeping GM out of bankruptcy? Who, exactly, is being helped by keeping the likes of the Chevy Volt alive and killing creditors interests (such as the UAW pensioners)? Keep voting Democrat, Michigan! No wonder the king's mediation of 40 years of stalemated labor and business issues in the auto sector isn't going so well. There's a reason royal discretion has long been outmoded as a way to run an economy: Things just work better if a realm's subjects are left to resolve their own disputes and interests through the impersonal mechanism of the markets and the law. His current bailout strategy amounts to asking thousands of bondholders and GM retirees to buy stock in a GM that the king's own policies mean they'd be loony to buy. Add the fact that passenger cars and trucks in the U.S. are a trivial source of greenhouse gases in any case -- they could all become carbonless and it would be irrelevant in the face of China's and India's coal use. King Barack has only been on his throne for three months. His policies already have devolved into savage incoherence. Quote Link to comment Share on other sites More sharing options...
Critic Posted April 23, 2009 Share Posted April 23, 2009 Anyone remember when in Nov/December Nov. Dec. let's see, wasn't Bush president then? So that leaves King B now to fix that problem? Am I correct in my time line? Wait,, you thought I forgot who signed the original bills yea? Quote Link to comment Share on other sites More sharing options...
SkapeGote Posted April 23, 2009 Share Posted April 23, 2009 Sup, The Obama administration could make this worse, but they were not the ones who started this crap to begin with. We all just have to ride it out. John McCain would have done no better, and if you think so you are just lying to yourself. Skape Quote Link to comment Share on other sites More sharing options...
97svtgoin05gt Posted April 23, 2009 Share Posted April 23, 2009 GM: :fan: Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted April 23, 2009 Share Posted April 23, 2009 Nov. Dec. let's see, wasn't Bush president then? So that leaves King B now to fix that problem? Am I correct in my time line? Wait,, you thought I forgot who signed the original bills yea? Well, considering Bush was the worst excuse for a "Republican" since the party was formed, as a right-leaner, I really take no offense to jabs in his direction. :P Quote Link to comment Share on other sites More sharing options...
OHV 16V Posted April 23, 2009 Share Posted April 23, 2009 The whole GM debacle is like watching a bunch of monkeys trying to fuck a football.... Quote Link to comment Share on other sites More sharing options...
OHV 16V Posted April 23, 2009 Share Posted April 23, 2009 More details on last night's good news... GM Plant Closures Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted April 23, 2009 Share Posted April 23, 2009 The whole GM debacle is like watching a bunch of monkeys trying to fuck a football.... As a moderator, I want to edit that, but it's just too damn funny. Quote Link to comment Share on other sites More sharing options...
97svtgoin05gt Posted April 23, 2009 Share Posted April 23, 2009 As a moderator, I want to edit that, but it's just too damn funny. I definitely laughed. Quote Link to comment Share on other sites More sharing options...
OHV 16V Posted April 23, 2009 Share Posted April 23, 2009 From now on, I'll try to clean it up it a little Nick, sorry... Thanks for lettin' me have that one though... Quote Link to comment Share on other sites More sharing options...
Pioneer Posted April 23, 2009 Share Posted April 23, 2009 Quote Link to comment Share on other sites More sharing options...
OHV 16V Posted April 23, 2009 Share Posted April 23, 2009 NICE! :beerchug: Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted April 24, 2009 Share Posted April 24, 2009 Anyone remember when in Nov/December some on this board thought the bailout would be best for GM, America, and workers alike because it would provide stability and new competent leadership could be demanded by the politicians in charge of keeping GM out of bankruptcy? Who, exactly, is being helped by keeping the likes of the Chevy Volt alive and killing creditors interests (such as the UAW pensioners)? And your counterpoint is an op-ed piece? You must be kidding me. Quote Link to comment Share on other sites More sharing options...
ausrutherford Posted April 24, 2009 Share Posted April 24, 2009 (edited) Only a matter of months before Ford outsells them. Edited April 24, 2009 by ausrutherford Quote Link to comment Share on other sites More sharing options...
jpd80 Posted April 24, 2009 Share Posted April 24, 2009 The whole GM debacle is like watching a bunch of monkeys trying to fuck a football.... Yeah but it looks like the football is in the "drivers seat".... Quote Link to comment Share on other sites More sharing options...
OHV 16V Posted April 24, 2009 Share Posted April 24, 2009 Yeah but it looks like the football is in the "drivers seat".... So true.... Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted April 24, 2009 Author Share Posted April 24, 2009 And your counterpoint is an op-ed piece? You must be kidding me. I'll bet in academia, arguing against a straw-man point works well. When source criticism is your best retort...I'll just accept that as your way of admitting you were wrong. Meanwhile, the next round of taxpayer cash into this $1B business is rumored to be $40B. Nothing but the best for the King's coach-maker! (Oh yeah, then there was that concern that in bankruptcy no DIP financing could be obtained.) Quote Link to comment Share on other sites More sharing options...
taxman100 Posted April 24, 2009 Share Posted April 24, 2009 My understanding is most of the major bondholders bought Credit Swap Insurance on these bonds, so that if GM and/or Chrysler goes bankrupt, the insurer would pay off. Guess who the insurer was? AIG, the insurance company now owned by the United States Treasury. Congress jumped into a giant swirling, sucking pool of excrement when they decided bailing all of these losers out was a winning formula. Quote Link to comment Share on other sites More sharing options...
97svtgoin05gt Posted April 27, 2009 Share Posted April 27, 2009 Quote Link to comment Share on other sites More sharing options...
Mark B. Morrow Posted April 27, 2009 Share Posted April 27, 2009 Ok so where did you find that on such short notice? Quote Link to comment Share on other sites More sharing options...
Mark B. Morrow Posted April 27, 2009 Share Posted April 27, 2009 (edited) I'll bet in academia, arguing against a straw-man point works well. When source criticism is your best retort...I'll just accept that as your way of admitting you were wrong. Meanwhile, the next round of taxpayer cash into this $1B business is rumored to be $40B. Nothing but the best for the King's coach-maker! (Oh yeah, then there was that concern that in bankruptcy no DIP financing could be obtained.) The King's Coach Maker. Who ordered the new Presidential Limo? Hint: It wasn't Barack Obama. Mr. Jenkins, Jr. makes not a single reference to George the Villiage Idiot under whose reign TARP and the Auto Bailout were conceived. I guess that is the great thing about WSJ Op-Eds. They don't have to trip over facts. Edited April 27, 2009 by Mark B. Morrow Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted April 27, 2009 Author Share Posted April 27, 2009 TARP's conception wasn't the problem with the program, nor is who ordered an armored limousine. Those are irrelevant facts. W did give some cash to GM/Chrys less than 4 weeks from inauguration day; at the behest of the incoming administration. January was close to melt down, if you'll recall, and he didn't want to allow it to collapse and add to the "jitters" that wound up taking about 40% of the stock market's value out. No doubt about it the refusal to allow TARP recipients to pay it back, and additional confiscated property distributions to GM/Chrys would not be managed the same as it is now. It's King Obama's baby now, and we're all shareholders. Kind of like AvtoVaz. Well, no, I guess the Soviet Union is dead; actually the Russian "bailout" won't "affect shareholders interests." Weird concept, those wacky Russian capitalists! I'm just the lone voice in the wilderness here who has advocated since November to just allow GM/Chrys to go bankrupt, and now sure enough the government will pour somewhere between 15-40B more cash into the two makes, and provide bridge financing in bankruptcy eventually anyway. And Ford will be competing for customers against a state-run auto business producing government-favored models (for both fleet and personal use). The real "people's car" of 21st century America might just become a government-subsidized $40K Volt. But hey, it worked for the Beetle, I suppose, even if it didn't turn out so well for the Third Reich! Quote Link to comment Share on other sites More sharing options...
Pioneer Posted April 27, 2009 Share Posted April 27, 2009 Ok so where did you find that on such short notice? http://images.search.yahoo.com/search/imag...ss&ei=UTF-8 Link contains foul language in the search bar. Click at your own risk. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted April 28, 2009 Share Posted April 28, 2009 (edited) When source criticism is your best retort...I'll just accept that as your way of admitting you were wrong. Uh yeah, your 'rebuttal' has nothing in it to 'rebut.' It's a bunch of haranguing. Just like most of your posts here. Nothing on point and lots and lots of melodrama. And if you can't tell the difference between haranguing and logical arguments constructed off facts, you should go spend some quality time with Adam Smith's work and the Federalist Papers. Stuff that I'm sure you pay no end of lip service too, but completely fail to appreciate. Edited April 28, 2009 by RichardJensen Quote Link to comment Share on other sites More sharing options...
LSFan00 Posted April 28, 2009 Author Share Posted April 28, 2009 What exactly am I supposed to be countering, sir Richard? You seem particularly dour this week. Feel free to lecture me and the board about the federalist papers. I might even click on the thread if you start it. It must be getting tough for you to continue to defend this out-of-bankruptcy restructuring. All GM stock is sold by the GM retirees one week, and now here's the plan (of the week, I suppose): The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization. Link. What competitive industrial organization do you see emerging from this? Now, supposedly, he just doesn't want to run GM: Let me be clear: The United States government has no interest in running GM. We have no intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company. But, why don't we hear more about this? Rewriting labor contracts is not what the Obama administration is looking for in a restructuring plan. It wrongly assumes that GM's foray into the gas-guzzling SUV market sealed its fate. And it wants the nation's largest automaker to roll out more eco-friendly hybrids, even though SUVs were for years a cash cow — and could be again, now that gas prices have settled back down. Hybrids are once again viewed as the expensive joke that they were. The unreported, unspoken reason that GM is careening toward bankruptcy is the crushing labor mandates it's had to fund each year. In addition to the billions spent on the Jobs Bank, GM has spent $103 billion during the past 15 years funding its pension and retiree health care obligations, according to industry analysts. That's nearly $7 billion a year — more than GM's capital spending budget for new models this year. Meanwhile, Honda and other nonunion companies didn't have to bear such costs. Japanese automakers even built cars inside America with relatively young nonunion labor that, unlike their UAW counterparts, quickly learned to adapt and thrive in the leaner assembly systems that Japanese companies operated. So, now we're going to de facto turn the company into an employee-owned one, though the employees just sold all of their stock. It's all coming together beautifully! Quote Link to comment Share on other sites More sharing options...
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