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Re: Obama's Pinstripe Revolution [Re: johnm214]
    #10300046 -

johnm214 said:
WTF are you talking about?  Obviously the hundred percent, but what does that have to do with anything?  The bondholders don't own 100% of the company so they wouldn't get 100%.


Interesting choice.  Even if the bondholders were given 100% of the common stock in a company that went bankrupt, that stock would be worthless.  I'm not sure why you think 100% of nothing is better than 10% of something.  If bondholders just kept their bonds and GM went bankrupt, they'd still get nothing because even if GM liquidated its assets, it wouldn't even have the cash to pay it's secured debtholders, let alone the bondholders.  How saving the company is bad for bondholders, I don't understand.

johnm214 said:
And who is the president to decide how much of your property you keep.  Who are you for that matter?

Again, WTF are you talking about?


The Government is the only one willing to save GM.  So they call the shots.

Obviously you feel GM should go bankrupt.  Do you think it would be better for the bondholders, the GM employees, subcontractors, the taxpayer (via the unemployment office), or the country to let that happen?

Edited by Falcon91Wolvrn03 (05/07/09 01:39 AM)

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Re: Obama's Pinstripe Revolution [Re: Falcon91Wolvrn03]
    #10300766 -

>  I'm not sure why you think 100% of nothing is better than 10% of something.
Because it has no relevance on this issue.  You are making something up, then using it to argue your point as if it meant something.

> If bondholders just kept their bonds and GM went bankrupt ...

... then GM could ditch the union contracts that are killing the company, renegotiate with management and labor, leave bankruptcy as a newly structured company, become profitable, and the bondholders would not lose anything.

> I don't understand.

This is obvious.  Bankruptcy doesn't mean out of business.  Bankruptcy does not mean sell off assets and pay off debts.  Bankruptcy can mean protection from creditors while a company restructures allowing them time to become profitable again.

> The Government is the only one willing to save GM.  So they call the shots.

The government should stay the @#$! out of it.  Let GM go into bankruptcy, let GM get rid of the stupid union contracts that should have never been made, let GM get rid of dead weight management that are being overpaid to underperform, and give GM a chance to become profitable again without the government doing a thing.  If it works, great.  It it doesn't, oh well.  The government is not in the business of saving companies from their own stupidity, nor should it be.

Social welfare is a bad enough waste of government resources, but the Messiah, in His infinite stupidity, has decided to expand the government into corporate welfare.  Let GM fail, if that is what fate has in mind, and allow new competition to form in the void.  Maybe the new competition will be a little wiser about the labor contracts they sign.

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Re: Obama's Pinstripe Revolution [Re: MrBump]
    #10300767 -

MrBump said:
:lol: he's gonna turn into Barack the Magic Negro.


:rofl2:


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Re: Obama's Pinstripe Revolution [Re: MrBump]
    #10301274 -

MrBump said:
These holdouts bought their debt at reduced prices due to the extreme risk involved w/ investing in a failing dinosaur of a company. They rolled the dice at Casino Wall Street and came up snake eyes. Suck it up and take the hit.

Or perhaps these hedge funds own credit default swaps on Chrysler (probably through AIG) and get to cash in only when Chrysler fails. Didnt (or doesnt) AIG have to use the tax payers bailout money to pay off these types of obligations? So maybe these hedge funds stand to get a lot more than 33 cents/dollar from the tax payer via forcing a Chrysler BK.


It's disappointing that neither the article nor the plethora of comments said anything about CDSs until you did. If you don't understand how CDSs affected this transaction and how they were by far the most significant issue outstanding, you probably shouldn't be commenting. And I include the author of that piece of shit Lonestar linked to.

This is a political hit piece for the lowest common denominator, which we seem to have plenty of. It's got socialism, unions, everything to get a partisan boiling.

And I love how the paranoia turns to guns once again. Put down the pipe and go outside, fellas.

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Re: Obama's Pinstripe Revolution [Re: Seuss]
    #10301284 -

Seuss said:
... then GM could ditch the union contracts that are killing the company, renegotiate with management and labor, leave bankruptcy as a newly structured company, become profitable, and the bondholders would not lose anything.


If you think labor killed that company and not the god awful leadership for 20 years (including, you know, the people that signed the union contracts), you're completely delusional.

And since when is everyone in bankruptcy court supposed to get a haircut but the bondholders? That's ridiculous.

Edited by biggyfred (05/07/09 10:15 AM)

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Re: Obama's Pinstripe Revolution [Re: biggyfred]
    #10301297 -

> If you think labor killed that company and not the god awful leadership for 20 years

I blame management for accepting insane labor contracts as much as I blame labor demanding insane labor contracts.  Read my words again:

"let GM get rid of dead weight management that are being overpaid to underperform"
"renegotiate with management and labor"


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Just another spore in the wind.

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Re: Obama's Pinstripe Revolution [Re: Seuss]
    #10301410 -

Seuss said:
The government should stay the @#$! out of it.  Let GM go into bankruptcy, let GM get rid of the stupid union contracts that should have never been made, let GM get rid of dead weight management that are being overpaid to underperform, and give GM a chance to become profitable again without the government doing a thing.  If it works, great.  It it doesn't, oh well.  The government is not in the business of saving companies from their own stupidity, nor should it be.

Social welfare is a bad enough waste of government resources, but the Messiah, in His infinite stupidity, has decided to expand the government into corporate welfare.  Let GM fail, if that is what fate has in mind, and allow new competition to form in the void.  Maybe the new competition will be a little wiser about the labor contracts they sign.


I am with you 100%. :thumbup:

Corporate welfare, to me, is like the worst of both ends of the spectrum of politics.


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:hst:
Society in every form is a blessing,
but government at its best is but a necessary evil 
- Thomas Paine

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Re: Obama's Pinstripe Revolution [Re: biggyfred]
    #10301545 -

biggyfred said:


This is a political hit piece for the lowest common denominator,



Chrysler: Pay Back the Money!

The Obama Administration appears about to walk away from $7.5 billion in taxpayer money used to prop up Chrysler. This little information nugget was buried in Chrysler’s filing before the bankruptcy judge last week and confirmed by Administration sources. So much for responsible government and transparency!

The Bush Administration pumped $4 billion into Chrysler to keep it alive long enough to go into bankruptcy well-prepared. Obama has waived the $4 billion and a $300 million fee. In exchange, taxpayers are receiving an 8 percent stake in a company likely worth zilch.

In addition, the Obama Administration loaned another $3.2 billion to keep Chrysler operating in bankruptcy. Expected repayment: zilch.

But the plan is to use Chrysler’s assets to pay off creditors and replenish the UAW’s fund for its retirees, with enough left over to make the new Chrysler a pretty bride for Fiat the Italian groom. There’s nothing wrong with Fiat acquiring a controlling position in a new Chrysler. But the taxpayers shouldn’t be asked to fund a $7.5 billion dowry. Before any monies are paid to the autoworkers’ union, Fiat, or any non-secured creditor, taxpayers should get their money back.


http://www.butasforme.com/2009/05/06/chrysler-pay-back-the-money/


is this one better? it also mentions Bush?


--------------------
America's debt problem is a "sign of leadership failure"

We have "reckless fiscal policies"

America has a debt problem and a failure of leadership.

Americans deserve better

Barack Obama

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Re: Obama's Pinstripe Revolution [Re: biggyfred]
    #10301594 -

biggyfred said:
Seuss said:
... then GM could ditch the union contracts that are killing the company, renegotiate with management and labor, leave bankruptcy as a newly structured company, become profitable, and the bondholders would not lose anything.


If you think labor killed that company and not the god awful leadership for 20 years (including, you know, the people that signed the union contracts), you're completely delusional.

And since when is everyone in bankruptcy court supposed to get a haircut but the bondholders? That's ridiculous.


Secured creditors get back all of their money first.  Or at least that used to be the law before Obama decided that big campaign contributors get something for nothing.  And you all thought Republicans were corrupt.  This is a naked campaign pay for play.

If secured loans are no longer secured and the government can swoop in and rewrite law every time they want to manufacture a crisis, who will ever make a secured loan?  Guess who.  Go on, guess.  Only the government, with taxpayer money, which they will then forgive to benefit union campaign donors.  Under the guise of saving jobs.  A naked cash grab, plain and simple.  Any fund manager who invests in a US company now should be prosecuted for malfeasance.


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Re: Obama's Pinstripe Revolution [Re: zappaisgod]
    #10302424 -

zappaisgod said:
Secured creditors get back all of their money first.


They most certainly do not. They have absolute priority, but the whole damn point of a bankruptcy is for the secured and unsecured creditors to hash out an agreement on how it will be divided. I think a bankruptcy plan has to be supported by 2/3 of secured creditors and 2/3 all creditors (or so).

Quote:
Or at least that used to be the law before Obama decided that big campaign contributors get something for nothing.  And you all thought Republicans were corrupt.  This is a naked campaign pay for play.


The US government is a creditor and has every right to band with other holders to force action. That's the whole point! With a small position (in relative terms) in the company, it is without question in the government's interests (not just jobs-wise but economically as well) to restructure in a way that may generate future revenue and allow them to recover at least a portion of the "investment".

Not only that, but many of the secured creditors have a financial stake in the company being forced into bankruptcy with CDS hedges. I mean shit, let's be real here: Why on God's effing green Earth would you be holding Chrysler paper right now? It made great business sense for CDS holders to buy up this trash Chrysler paper at nothing on the dollar and try to force a bankruptcy. Course, it's unethical, dishonest as bloody hell, and legally questionable (not to mention agency questions that open the firm to liability, but who cares right?), but no one seems to give a shit about that because it doesn't involve unions and socialism and whatever else we can hyperventilate about. It's just good old fashioned capitalist backstabbing.

If Obama goes after them for being dishonest, he hates capitalists. If he does nothing, the people get absolutely nothing for their "investment". Either way, lonestar would still complain because he/she is too damned lazy to research before posting other peoples' trash articles and internalizing it as the word of God. Amirite? How simple minded do you have to be to think it was about not mentioning Bush? Lowest. Common. Denominator.

Was putting money in a bad idea? Shit yea. Is the horse out of the barn already? Yes.

Quote:
If secured loans are no longer secured and the government can swoop in and rewrite law every time they want to manufacture a crisis, who will ever make a secured loan?  Guess who.  Go on, guess.  Only the government, with taxpayer money, which they will then forgive to benefit union campaign donors.  Under the guise of saving jobs.  A naked cash grab, plain and simple.  Any fund manager who invests in a US company now should be prosecuted for malfeasance.


If you have a heart attack every time the government "interprets" a law the way they want to, well, you must be in constant pain.

I am not a lawyer, but I am in business.

Edited by biggyfred (05/07/09 03:09 PM)

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Re: Obama's Pinstripe Revolution [Re: biggyfred]
    #10302890 -

Auto-Summary
The post discusses the implications of the US government's involvement in Chrysler's bankruptcy, questioning the legality and fairness of the government's actions. It argues that the government, as a junior unsecured creditor, should not have received a significant stake in the company, and that the UAW's interest in the company is unjustified. The post also criticizes the use of credit default swaps and the government's willingness to rewrite laws for political gain, suggesting that such actions undermine the rule of law and discourage private investment.

biggyfred said:
zappaisgod said:
Secured creditors get back all of their money first.


They most certainly do not. They have absolute priority, but the whole damn point of a bankruptcy is for the secured and unsecured creditors to hash out an agreement on how it will be divided. I think a bankruptcy plan has to be supported by 2/3 of secured creditors and 2/3 all creditors (or so).


That would be nice if your link said anything about secured creditors vs other creditors but it did not.  A common for instance is in housing foreclosures when the first mortgage holder is expected to get made 100% whole before a second mortgage gets touched.  Other unsecured creditors after the second secured mortgage who would get fucked totally in include any trade liens.  I do not know about your ratios but I do know that the UAW is nowheresville if not for the illegal acts of the Obama administration in confiscating and redistributing property.  Many other companies have been liquidated to satisfy judgments with no concern for the employees.
Quote:
 



Quote:
Or at least that used to be the law before Obama decided that big campaign contributors get something for nothing.  And you all thought Republicans were corrupt.  This is a naked campaign pay for play.


The US government is a creditor and has every right to band with other holders to force action. That's the whole point! With a small position (in relative terms) in the company, it is without question in the government's interests (not just jobs-wise but economically as well) to restructure in a way that may generate future revenue and allow them to recover at least a portion of the "investment".


But the government entirely relinquished any claim to be paid back.  And the US government was a junior creditor, i.e. unsecured.  Nor did they legally assign their interest to the union.  Then there is the further issue of out and out bullying.  Many times a senior creditor will negotiate a share for junior creditors at their expense but which is in their interest to avoid litigation expenses.  This was not done here because the government is a bully.
Quote:
Not only that, but many of the secured creditors have a financial stake in the company being forced into bankruptcy with CDS hedges. I mean shit, let's be real here: Why on God's effing green Earth would you be holding Chrysler paper right now? It made great business sense for CDS holders to buy up this trash Chrysler paper at nothing on the dollar and try to force a bankruptcy. Course, it's unethical, dishonest as bloody hell, and legally questionable (not to mention agency questions that open the firm to liability, but who cares right?), but no one seems to give a shit about that because it doesn't involve unions and socialism and whatever else we can hyperventilate about. It's just good old fashioned capitalist backstabbing.


Will you please provide any indication that there was anything to do with a credit default swap.  It would seem to me that if the creditors held a CDS they wouldn't care so much that the company was being given away because they had purchased insurance against that.  Backstabbing?  What are you talking about.  Good old capitalist backstabbing does not involve an active government taking and redistributing on no basis other than political expedience.  BY WHAT LEGAL MEASURE SHOULD THE UNIONS RECEIVE THIS HUGE INTEREST IN THE COMPANY?
Quote:
If Obama goes after them for being dishonest, he hates capitalists. If he does nothing, the people get absolutely nothing for their "investment". Either way, lonestar would still complain because he/she is too damned lazy to research before posting other peoples' trash articles and internalizing it as the word of God. Amirite? How simple minded do you have to be to think it was about not mentioning Bush? Lowest. Common. Denominator.

  What dishonesty?  The only dishonesty is Obama's naked grab.  He has totally forgiven the money lent by the people, gotten nothing in return and given 55% of whatever assets there might actually remain to the group that destroyed the company in the first place but never put anything up.
Quote:
Was putting money in a bad idea? Shit yea. Is the horse out of the barn already? Yes.


Oh yeah, this pony is out.  The pony is any reasonable law regarding bankruptcy.  The message is loud and clear.  American is a banana republic, where the rule of law is gone and empathy holds sway.  He said as much in his speech regarding a Supreme Court justice.  Damn the law when there are ends in sight.
Quote:
Quote:
If secured loans are no longer secured and the government can swoop in and rewrite law every time they want to manufacture a crisis, who will ever make a secured loan?  Guess who.  Go on, guess.  Only the government, with taxpayer money, which they will then forgive to benefit union campaign donors.  Under the guise of saving jobs.  A naked cash grab, plain and simple.  Any fund manager who invests in a US company now should be prosecuted for malfeasance.


If you have a heart attack every time the government "interprets" a law the way they want to, well, you must be in constant pain.

I am not a lawyer, but I am in business.


I'm in business too.  I'm in construction.  I never had the problem but I have seen lots of contractors and thus the employees of their companies get fucked when the banks got 100% and there was nothing left to cover mechanic's liens.  Companies went under and people got fired.  But not the fucking UAW.  Oh no, not them.


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Re: Obama's Pinstripe Revolution [Re: biggyfred]
    #10303177 -

biggyfred said:
And I love how the paranoia turns to guns once again. Put down the pipe and go outside, fellas.



lol, say what you want, but they have already stated their intentions and the democrats have the most power in congress that they have had in a while.  the far left's intention has been and will continue to be to strip our gun rights until we have none left.

its not paranoia if it is a real threat, and since they are not secret of their intentions, there is no paranoia.


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Re: Obama's Pinstripe Revolution [Re: zappaisgod]
    #10303793 -

Quote:
Will you please provide any indication that there was anything to do with a credit default swap.  It would seem to me that if the creditors held a CDS they wouldn't care so much that the company was being given away because they had purchased insurance against that.


I dont know what you mean exactly by "given away" but picture this scenario:

A hedge fund manager with a keen eye to foresee that Obama might try to save the auto companies from BK by flooding the companies w/ cash and/or hammering out a deal to buy all the company's debt back at pennies on the dollar, thereby basically taking control of the company and avoiding BK.

This hedge fund manager makes loans to the auto company, or through some other means somehow manages to gain secured debt in the auto company.

but at the same time its making secured loans to the auto company, this hedge fund goes out and purchases a CDS on the same auto company. The hedge fund pays a nominal fee (relatively) and in the event the company defaults or files for BK, the CDS pays out big time.

Obama and the Treasury attempt to work out a deal w/ all the auto company's creditors in order to save the company from BK, thus preserving the jobs and the pensions and other benefits entitled to its employees and retirees. The hedge fund is now a secured creditor w/ secured creditors rights. It balks at taking the deal from the Treasury, arguing that it wants to make sure its rights are protected, maybe it will get more in BK Court than the 33 cents on the dollar the Treasury is offering.

So, this hedge fund, once approached by Obama, is asked to take pennies on the dollar for its initial investment that made it a secured creditor. Obviously they stand to lose $, but they gambled w/ their investment and lost. this same hedge fund also has a significant payday coming from its other investment in a CDS pays out from a default event. The hedge fund can tell Obama to screw himself, and in fact when it does so, it stands to rake in the cash when the auto company is forced into BK b/c all the creditors wouldnt take the deal.

This hedge fund had the foresight to not only invest in the hope of a default, but to have a hand in making sure that default was guaranteed to happen by aligning itself as a secured creditor.

Its a prudent business move but unethical as hell.

I would advocate that loopholes should be closed to ensure debt holders in a company dont have these CDS sidebets in place. Sure, the hedge fund could say that it bought these CDS's to "hedge" its bets. Or it could have purchased secured debt and CDS's to conspire to bring down a failing company from the inside. making huge sums of money in the process.

CDS's are not the same as insurance policies. The hedge fund does not even need to have any debt in the company to purchase a CDS on that company. Therefore the hedge fund doesnt even have to technically suffer a loss to collect on the default/BK event. with insurance policies, a the policy holder would have to suffer some sort of loss (property damage or theft) to collect on a policy.


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If it weren't for the bloody corpses, I wouldn't have any corpses at all.

There are two ways to get to the top of an oak tree: start climbing or sit on an acorn.

Are you a carrot, an egg, or a coffee bean?

Edited by MrBump (05/07/09 08:15 PM)

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Re: Obama's Pinstripe Revolution [Re: MrBump]
    #10304115 -

MrBump said:
Quote:
Will you please provide any indication that there was anything to do with a credit default swap.  It would seem to me that if the creditors held a CDS they wouldn't care so much that the company was being given away because they had purchased insurance against that.


I dont know what you mean exactly by "given away"


You don't?  Why not?  What investment ddi the UAW make and when will the taxpayer get repaid the loan he gave?
Quote:
but picture this scenario:

A hedge fund manager with a keen eye to foresee that Obama might try to save the auto companies from BK by flooding the companies w/ cash and/or hammering out a deal to buy all the company's debt back at pennies on the dollar, thereby basically taking control of the company and avoiding BK.

This hedge fund manager makes loans to the auto company, or through some other means somehow manages to gain secured debt in the auto company.

but at the same time its making secured loans to the auto company, this hedge fund goes out and purchases a CDS on the same auto company. The hedge fund pays a nominal fee (relatively) and in the event the company defaults or files for BK, the CDS pays out big time.

Obama and the Treasury attempt to work out a deal w/ all the auto company's creditors in order to save the company from BK, thus preserving the jobs and the pensions and other benefits entitled to its employees and retirees. The hedge fund is now a secured creditor w/ secured creditors rights. It balks at taking the deal from the Treasury, arguing that it wants to make sure its rights are protected, maybe it will get more in BK Court than the 33 cents on the dollar the Treasury is offering.

So, this hedge fund, once approached by Obama, is asked to take pennies on the dollar for its initial investment that made it a secured creditor. Obviously they stand to lose $, but they gambled w/ their investment and lost. this same hedge fund also has a significant payday coming from its other investment in a CDS pays out from a default event. The hedge fund can tell Obama to screw himself, and in fact when it does so, it stands to rake in the cash when the auto company is forced into BK b/c all the creditors wouldnt take the deal.

This hedge fund had the foresight to not only invest in the hope of a default, but to have a hand in making sure that default was guaranteed to happen by aligning itself as a secured creditor.

Its a prudent business move but unethical as hell.


Bullshit.  There is nothing unethical about it.  Prudent business moves are by definition not only ethical but required.  Since when is preserving jobs a goal of a business investor?  It is not.  Further, if the company is sold off then the profitable parts will continue to employ people at a market set rate for worthwhile employment, not some artificially government imposed rate as payback for campaign contributions.
Quote:
I would advocate that loopholes should be closed to ensure debt holders in a company dont have these CDS sidebets in place. Sure, the hedge fund could say that it bought these CDS's to "hedge" its bets. Or it could have purchased secured debt and CDS's to conspire to bring down a failing company from the inside. making huge sums of money in the process.

  So you have concocted some grand scheme, that there is no evidence exists, to confiscate the hedge fund, which seems to be your demon du pour, because they somehow sabotaged their own investment by purchasing insurance.  Seems not to be the case since they are getting fucked.
Quote:
CDS's are not the same as insurance policies. The hedge fund does not even need to have any debt in the company to purchase a CDS on that company. Therefore the hedge fund doesnt even have to technically suffer a loss to collect on the default/BK event. with insurance policies, a the policy holder would have to suffer some sort of loss (property damage or theft) to collect on a policy.


False example.  The creditors in Chrysler are taking a loss.  Do you have any reason to believe that the creditors getting cornholed by Barry and the unions have a CDS involved?  Is your next ridiculous argument going to be that they failed in their due diligence by not getting a CDS and thus suffered a loss through their own failure as opposed to the Othugs ignoring all previous contract law?  Who would write such a CDS anyway?  AIG?


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Re: Obama's Pinstripe Revolution [Re: zappaisgod]
    #10304390 -

wow, how's your blood pressure?

You are correct. I dont know whether these hedge funds own CDS on Chrysler, its subject to debate b/c this BK just got filed. The news and blogs are awash with stories that speculate the hedge funds own these CDS, some are reporting they dont own any CDS. It may come to light that the hedge fund holdouts owned no CDS, or that they owned several which are worth much more money on the default action whem compared to their loses as secured creditors in the same default action.

that's why I called it a scenario, ie, its a possibility. But I guess I reserve judgement re: regulation until this question gets answered.

it just seems fishy to me as to why they wouldnt take the 33 cents on the dollar, especially when Chrysler debt is currently trading around 15 cents on the dollar and Moody’s Investor Service estimated this week that debt holders could expect to recover 20 cents on the dollar in liquidation. source  So even if they win in BK Court and somehow jump to the head of the creditors line, they could stand a reasonable chance to get back less than the offered 33 cents on the dollar.

Obama seems to be concerned about preserving middle class jobs (and YES, cow towing to the union). of course I wouldnt expect that of a business investor, who's goal is to pad his fund's wallet to collect more fees. I honestly dont see how, if this scenario played out, that the hedge funds' means would ethically justify the end- which is banking in on a default by helping create that default.

generally speaking, CDSs are not insurance for numerous reasons. Most significantly, there is no requirement that the protection buyer own the asset on which it is buying protection or that it suffer any loss...Other common features of CDSs that distinguish them from insurance include: (i) the absence of a requirement that the buyer provide proof of loss as a condition to payment; (ii) payment upon settlement that may be more than the loss (if any) suffered by the buyer; (iii) the absence of rights of subrogation; and (iv) differences in accounting, tax, bankruptcy and othre regulatory treatment' source


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If it weren't for the bloody corpses, I wouldn't have any corpses at all.

There are two ways to get to the top of an oak tree: start climbing or sit on an acorn.

Are you a carrot, an egg, or a coffee bean?

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Re: Obama's Pinstripe Revolution [Re: Falcon91Wolvrn03]
    #10305552 -

Falcon91Wolvrn03 said:
johnm214 said:
WTF are you talking about?  Obviously the hundred percent, but what does that have to do with anything?  The bondholders don't own 100% of the company so they wouldn't get 100%.


Interesting choice.  Even if the bondholders were given 100% of the common stock in a company that went bankrupt, that stock would be worthless.  I'm not sure why you think 100% of nothing is better than 10% of something.  If bondholders just kept their bonds and GM went bankrupt, they'd still get nothing because even if GM liquidated its assets, it wouldn't even have the cash to pay it's secured debtholders, let alone the bondholders.  How saving the company is bad for bondholders, I don't understand.





What stock?  GM doesn't own 100% of the common stock so they couldn't give it to debtors...  We're talking about fulfilling the bond obligations and other debt, not giving folks ownership of the compnay.  I'm sure they'd much rather just get their due, if they wanted to own stock they'd buy stock.


You seem confused as seuss mentioned.


1.  You just make up facts
2.  You premise your argument on those facts
3.  A company declaring bankruptcy doesn't mean that they have no money nor that they are worthless nor that they will cease operations.
4. You presume you or the government has the right to tell people whot to do.  If the bondholders would rather go through bankruptcy then that is their choices.

Quote:
johnm214 said:
And who is the president to decide how much of your property you keep.  Who are you for that matter?

Again, WTF are you talking about?


The Government is the only one willing to save GM.  So they call the shots.

Obviously you feel GM should go bankrupt.  Do you think it would be better for the bondholders, the GM employees, subcontractors, the taxpayer (via the unemployment office), or the country to let that happen?



I don't know whether it would be better or not, but I assume it would.  What I am sure of is that a) the taxpayer has NO input on this (or shouldn't) because its none of their buisness, its a private matter
b)  You and the President should have NO input on whether anyone does anything.  They made contracts under a set of law.  They need to satisfy those contracts or deal with the consequences of the law in existance (rather than getting new law made up for them).
c)  its none of your buisness if someone wants to force bankruptcy on them rather than take a lesser stake.  That's their buisness and their gamble that they will get more out of banknruptcy then out of some negotiated figure.

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Re: Obama's Pinstripe Revolution [Re: johnm214]
    #10306486 -

johnm214 said:
What stock?  GM doesn't own 100% of the common stock so they couldn't give it to debtors...


I understand that.  I was arguing "absolute best case" for the bondholders, which I realize is light years beyond best case (it's the opposite of a strawman argument; I give you a best case scenario and then try to knock it down).  My point is that if the Government doesn't step in, GM stock becomes worthless, whether you own 100% or a more realistic lesser amount (let me know if there any disagreement that GM common stock becomes worthless if the Government doesn't step in, because that's pretty easy to show)

Now, if you're saying GM bondholders shouldn't accept the stock and simply hang onto their bonds, then there's an even greater chance they'll get nothing, because GM is billions in debt, and could never pay their unsecured bondholders (which is who the article is talking about:)
the OP's article said:
In the case of GM, the UAW and bond holders are both unsecured creditors


So my point is that 10% of common stock that is worth anything is better than 100% of common stock worth nothing, and better than unsecured bonds worth nothing.  Unless, as biggyfred and MrBump pointed out, they are also invested in CDS in which case they would LOVE for GM to go bankrupt.  But that scenario still doesn't help the bondholder per se; it only helps those with CDS.

johnm214 said:
We're talking about fulfilling the bond obligations and other debt, not giving folks ownership of the compnay.  I'm sure they'd much rather just get their due, if they wanted to own stock they'd buy stock.


Of course they'd rather "get their due".  But again, unsecured bondholders won't get a penny if the Government doesn't step in.  If GM went bankrupt, only the secured bondholders would get some money out of it.

johnm214 said:
You seem confused as seuss mentioned.
1.  You just make up facts
2.  You premise your argument on those facts


Sorry I confused you with my 100% example.  The math is the same no matter what percentage you choose - $0.

johnm214 said:
3.  A company declaring bankruptcy doesn't mean that they have no money nor that they are worthless nor that they will cease operations.


You're correct in some bankruptcy cases.  But GM is so far in the hole, no money will ever make it to the unsecured bondholders or stockholders without Government help.

johnm214 said:
4. You presume you or the government has the right to tell people whot to do.


Actually, I do.  Here's an outstanding article from the business section of the "New York Times" saying why such action is justified.
Quote:
If (Bill) Gates chose to (give) less money to Ethiopia than to Kenya, would anyone recommend Ethiopia turn down the money because the split is unfair?


johnm214 said:
If the bondholders would rather go through bankruptcy then that is their choices.


The only logical reason for unsecured bondholders to do this is if they own CDS. 

johnm214 said:
Falcon91Wolvrn03 said:
Obviously you feel GM should go bankrupt.  Do you think it would be better for the bondholders, the GM employees, subcontractors, the taxpayer (via the unemployment office), or the country to let that happen?


I don't know whether it would be better or not, but I assume it would.  What I am sure of is that a) the taxpayer has NO input on this (or shouldn't) because its none of their buisness, its a private matter
b)  You and the President should have NO input on whether anyone does anything.  They made contracts under a set of law.  They need to satisfy those contracts or deal with the consequences of the law in existance (rather than getting new law made up for them).
c)  its none of your buisness if someone wants to force bankruptcy on them rather than take a lesser stake.  That's their buisness and their gamble that they will get more out of banknruptcy then out of some negotiated figure.


Well then here's one more company that bites the dust because of the unregulated the CDS market.  Those guys don't deserve any money if it's in their best interest for GM to go bankrupt.  Hopefully, these will once again be illegal very soon.


--------------------
I am in a minority on the shroomery, as I frequently defend the opposing side when they have a point about something or when my side make believes something about them.  I also attack my side if I think they're wrong.  People here get very confused by that and think it means I prefer the other side.

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Re: Obama's Pinstripe Revolution [Re: Falcon91Wolvrn03]
    #10306684 -

Quote:
Of course they'd rather "get their due".  But again, unsecured bondholders won't get a penny if the Government doesn't step in.  If GM went bankrupt, only the secured bondholders would get some money out of it.


You keep saying this, but it isn't true.  Under chapter 7 bankruptcy you are probably correct, but under chapter 11 bankruptcy you are flat out wrong.


--------------------
Just another spore in the wind.

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Re: Obama's Pinstripe Revolution [Re: lonestar2004]
    #10307240 -

That was an interesting article.  I don't think that the Obama administration should have gotten involved in the automotive industry.  I wondered what he was doing.  Now that I see what the unions are getting it is easy to figure out.

I think that these deals will be Obama's downfall once we get a couple of years out.


--------------------
Tastes just like chicken

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Re: Obama's Pinstripe Revolution [Re: JesusChrist]
    #10307769 -

the more I look at this the more I am glad the deal didnt go down. Let the Fed BK Courts hash out Chrysler's reemergence.

Obama's just pissed b/c he lost control of the process. Hopefully Judge Gonzalez doesnt stand for any executive branch meddling.

How could a union-owned company negotiate contracts w/ its union employees? It seems that there would be a huge conflict of interest there.

I did a quick google search for union owned businesses and it didnt really turn up anything, except a union owned bank. Has anyone ever heard of a successful union owned business?


--------------------
If it weren't for the bloody corpses, I wouldn't have any corpses at all.

There are two ways to get to the top of an oak tree: start climbing or sit on an acorn.

Are you a carrot, an egg, or a coffee bean?

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