This Time, It Is Not About the Money
The Obama administration tried to rewrite the United States commercial code and bankruptcy laws while structuring a solution for Chrysler. In the sale to Fiat, bond holders were told to accept pennies on the dollar and forget their massive debt. Since much of that debt was owned by financial institutions it would be repaid with TARP money even though it is against the law to use TARP money for bailing out the auto makers.
Bond holders are the first in line during a bankruptcy proceeding. Bonds like Chryslerís are next in line to U.S. Treasury Bonds in value because of their security position. The bond holders are paid first with any remaining cash or cash received from the sale of any remaining assets. New, interim funding for bankrupt companies is based on this principle. If this isnít in place, no one invests more bond money.
The state of Indiana pension funds invested about $17 million in Chrysler bonds. Under the administrationís plan Indiana would receive $12 million and told to go fly a kite for the other $5 million. However, the UAW health trust, a creditor with no real standing in the bankruptcy proceeding would receive a 55% equity stake in the new company formed by Fiat. Fiat owns Case/CNH.
Indiana petitioned the New York appellate court to stop the sale because the rights of junior creditors were put ahead the rights of senior lenders. The appellate court decision was appealed to the U.S. Supreme Court.
Liberal Justice Ruth Bader Ginsburg rightfully issued an order shortly before the 4 pm Monday deadline putting the Chrysler sale on hold. She realized there is something wrong with this deal.
Obama, and his talking heads, will cry over the potential loss of jobs if this deal isnít allowed to go forward. Obamaís child car czar
, Brain Brian Deese, will not shave for 3 days trying to grow some hair.
No one knows how the Chrysler deal will play out. But, what will happen if the sale isnít modified to conform to American law is that the bonds used to secure probably 90% of the heavy weight debt of American corporations will become worthless and the possibilities for a company in bankruptcy to obtain gap bankruptcy funding will disappear.
That has serious implications. The U.S. financial instruments lose all financial credibility. And that is far worse than anything we can imagine. Both the government based and corporate U.S. bonds, now held by our largest bond holder, China, are less valuable today. If China pushes as hard as it can, we will be waiting tables for the rest of the world by Christmas 2010.
And the respected financial bond standard used around the world for all to aspire to will be gone in 60 seconds if the Supreme Court doesnít exert the pressure of the current bankruptcy laws to the Chrysler sale.
This administration has no more answers than the last guy on how to fix Detroit. But there are people that know Detroit and the world market place and how to keep our global position in auto building. But those experts werenít asked for advice. Instead, 31-year old no-experience kids are allowed to destroy capitalism with 5th grade science experiments.
Hopeium wonít fix the Big 3 crisis. Smart capitalists will. And if you think this is a mess, wait until we get to GM.
"This is very good news for users, so they should not uninstall it. It will automatically filter pornographic images and antirevolutionary content. It will not take up much space on the hard drive. It is very stable and we have conducted many tests already," she added.
"Ensuring children's safety surfing online and create a green internet space is an important mission of the communications industry," said Xi Guohua, the vice-minister of the IT ministry, last month. He added that the Green Dam software had already been downloaded more than three million times and that more than 2,000 schools are equipped with it."
Very clever, those Chinese Communists
Senator Courtney may not be very clever, but even he can grasp the concept. Be on the look out for legislation requiring specific software installed on all computers in Iowa. Of course, it will be "for the children" and their protection.
Who cares who Spike is as long as you block and track those who dare even attempt to read Derailed. Use one subversive, counter revolutionary, running dog revisionist as bait to identify the rest. Let the single party system flower for one thousand years.
Mao Tse Tom
Reporters at the Boston Globe have a union. A 23% pay cut is on the table as a matter of survival. A vote is to be taken. Will the Boston Globe survive
Does Jimmy Olson at the Advertiser have a union? If not, could Senator Courtney and his friends help remedy that situation?
If Jimmy Olson took a 23% pay cut, would he qualify for food stamps?
Jimmy Olson can't get paid much less. The next pay grade will include the staff of the Purple & Gray.