Comments on: Chrysler Bankruptcy Exposes Dirty Politics

Declan McCullagh: Obama Calls Creditors Who Lent Money To Chrysler "Speculators," But What About the Rule Of Law?

[Obatomy]

I guess the president is behaving like what he desires in his Supreme Court nominee, ignore the law and pick a side for which you are empathetic. You think the credit market is tight right now? Wait and see what happens when creditors realize the government now retains the right overturn secured loan contracts when they need to repay political favors. No one will lend in that environment without asking for huge return (high interest rates) to compensate them for their risk. Why would you ever enter an agreement when an outside can come in at any time an rewrite the rules?

[armykungfu]

It is amazing how many people on this board think it is OK for Obama to ditch the rule of law in order to pay back the Union for their political suport.

The big question is, if the president is above the law, why should any of us obey? Fear?

[sjc_1]

They did what they did to keep the car companies from dragging down the rest of the country. Workers are stakeholders that give their lives producing product. Bond holders are just rich parasites sucking the life's blood out of the company and its workers.

[adsin15]

Social Security is an entirely different concept. This was a private enterprise that was essencially nationalized by our government because it was so poorly managed that it was going to result in failure and the loss of hundreds of thousands of jobs. Investors are meaningless because they threw away their money. When I go to the casino and bet 1000 dollars on black 33 and I lose, I don't demand my money back.

These investors made a last minute gamble on a failing company. That company took the money, pissed it away and then screwed the investors by tanking their company and having it be taken over by the government. The company that those people loaned their money too is gone. Taxpayers own it now. Whatever contracts Chrystler had are now at the discression of the United States Government.

I for one think we should honor the decades old pensions and contracts that were promised to the thousands of employees of the company that the author of this article seems to think should be given nothing.

So apparently in the authors world, an employees 20 years of service to the company isn't as important as the money making schemes that some investors came up with 6 months ago. These investors had enough money to throw it away on Chrystler. They'll be quite allright. Lets worry about "Joe the Auto worker" before we worry about "joe the guy with extra money to gamble on longshot investments"

[omega39-2009]

Failure is a bitter tasting drink isn't it? Especially when you have to tell lots of teachers and retirees that your monumental stupidity lost them all their money.

"I ASS-U-ME-D that the government would pay us back 100 cents on the dollar!"

ASSUMED
Posted by adsin15 a

Adsin15, I am a "senior investor" with Social Security, I have been investing in it now for 30 years. I know that according to the geniuses on this thread, the constitution guarantees I will get 100% of my "investment" back BEFORE it is disbursed as corporate welfare or taxbreaks for the wealthy. That is why I sleep so well at night.

[adsin15]

The real issue here isn't why the so called "senior investors" ( a deceptive term since all UAW contracts are far senior to these recent money-making investment schemes) thought it was a good idea in the first place to invest in an obviously failing and crippled company. The only possible explaination is that they felt it was a fool proof plan. They assumed that no matter what, the US taxpayers would reimburse them if their plan didn't work. It never occurred to them that this plan could LOSE money because Washington always looks out for investors right? Chrystler is too big to fail! LOL.

Failure is a bitter tasting drink isn't it? Especially when you have to tell lots of teachers and retirees that your monumental stupidity lost them all their money.

"I ASS-U-ME-D that the government would pay us back 100 cents on the dollar!"

ASSUMED

[omega39-2009]

Hey omega39-2009

Is your name Chavez!!!!!!! Do you live in Venezuela!!!!!!! Get real BUD!!!!!!
Posted by golfered2 a

Hey golfguy, investments have inherent risk, too bad but moaning and carping and throwing out tired old references to socialism does not change that simple truth.

[hdc77494]

If the law doesn't protect secured creditors, no bank would offer lower interest in return for offered security. What bank would loan Chrysler a dime if they didn't have some collateral to protect themselves if the company didn't pay it back. If you couldn't put your car up as collateral, or your house, who do you think will loan you tens or hundreds of thousands of dollars you can just walk away from? How do you think we got in this mess in the first place. The rich get a deal?? They're your retired school teacher, retired autoworkers, and other hard working people just like us.

[golfered2]

Hey omega39-2009

Is your name Chavez!!!!!!! Do you live in Venezuela!!!!!!! Get real BUD!!!!!!

[hdc77494]

Rattner's quote as reported by a reputable web blog in the financial community;
Who the f#&^ do you think you're dealing with? We'll have the IRS audit your fund. Every one of your employees. Your investors. Then we will have the Securities and Exchange Commission rip through your books looking for anything and everything and nothing we find to destroy you with." Sounds outlaqndish until you remember what happened to Mr Lewis at BoA. by Paulson/Bernakie. Your article leaves out that for their 10 billion owed, the UAW gets a 4.6 billion dollar note and 55% of Chrysler. For their 6.9 billion in secured debt, the hedge funds get 2 billion and no equity. The banks that accepted are all TARP banks, and the ones that didn't have no association with the feds.
http://finemrespice.com/node/56

[danceswithtrees]

Obama's actions here border on criminal in our nation of laws. I hope 3 things happen.

1. The creditors sue in Federal court and have the injustice overturned.
2. Everyone boycotts Chrysler and GM (I own a GMC and a Chevy, and am done with any UAW products)
3. We all rise up and throw this crooked administration out. Attend a TEA PARTY this 4th of July. Write, e-mail, and phone our leaders and let them know your disapproval.

APOLOGIES to omega. I was responding to someone else.

You're not too bright, omega, are you?

The creditors are not all just rich guys in offices.
Most of them are investment firms that invested other people's money into chrysler.
Do you know who some of those investors are?
Retirees, pension funds, 401(k) accounts through mutual funds, etc.... In other words, REGULAR PEOPLE.

The fact is these folks are legally first in line. Obama let others cut in front.

He uses words like 'speculators' and 'hedge funds' because people like you will swallow it whole and have no sympathy. But I bet you didn't know that pensions and mutual funds owned by regular people are invested in those baaaaad hedge funds. No?

WISE UP! You're being had - and you have no clue.
He put the unions ahead of retirees and other investors for political payback.
And you missed all of it. Wow.

[adsin15]

"During its slide, Chrysler borrowed money from lenders and in return signed a contract promising that as so-called senior creditors, they'd get paid before anyone else if the company went under.

These creditors, by the way, represent something of a cross-section of America: the University of Kentucky, Kraft Foods' retirement fund, the Bill and Melinda Gates Foundation, pension funds, teachers' credit unions, and so on."

So let's be clear as to what happened. Chrystler, a horribly managed dinosaur of a company, implodes. It needs money so a bunch of gtreedy idiots (mentioned above) throw a bunch of their money at Chrystler, cross their fingers and pray really hard that it will help. It doesn't because anyone with a brain can see Chrystler is a retarded investment. Now the taxpayers fork over 4.5 billion to help Chrystler limp on. That doesn't help either. Since the amount of money ponied up by the taxpayers VASTLY outweighs the amount of money put in by private investors, US taxpayers now control the company. That means Obama can do whatever the hell he wants with the company that we all own.

All the other investors are up the creek. Sorry. Maybe you should have given MORE money to Chrystler in the first place? Then it wouldnt have tanked right? I mean that was obviously the problem with it. Not enough capital. Just give them some more. That'll fix it.

The long and the short of this is: Investors take risks. Lately we've shown that here in America, most of those risks are RETARDED. Don't cry when your idiotic attempts to make "easy money" by investing in a company that is believed to be "too big to fail" backfire and you lose everything. Next time, try thinking before you throw your money away.

[panskeptic]

More economic royalism, that ignores the fact that these "investors" have friends at court who always rewrite laws to their benefit. For example, taxing hedge-fund managers at a lower rate than middle-class 9-to-5-ers.

Well guess what, Declan, making a dirty buck is not the highest form of human activity. Sometimes you've got to take it like everybody else. The unions built the middle class in this country, and they've taken multiple waves of cutbacks. Time for the white collar bandido's to take their turn.

[omega39-2009]

hey omega39-2009 I think your sarchasm is coming through loud and clear. So in response, try this one on. These investors have gotten the message. They will no longer invest. So in essence this will do nothing but keep poor people out of work, because rich people are not going to risk their nest eggs on loser investments. Maybe you can pull out of your fantasy land book some play money to support people now. It's morons like you that are costing this country, whether you are too stupid to realize it or not.
Posted by dudeineastnc

hey dudeineastnc, try getting your information somewhere besides Sean Hannity. Oh, and while you are at it, since you and the other "big thinkers" are invoking the constitution, perhaps you can point me to the amendment, clause or article that even mentions hedge funds let alone the fact that they are entitled to "risk free" investments.

[dudeineastnc]

Idiot, if we invoke the constitution, we wouldn't be in this spot. There is nothing in the constitution about "protecting" people from bad investments. Also, there's nothing in there about abortion, but you morons seem to find that too. Fact is, this country is about to correct itself. A cart will not move with everyone sitting inside waiting for someone else to push it, no matter how hard you look in the constitution.

[dudeineastnc]

hey omega39-2009 I think your sarchasm is coming through loud and clear. So in response, try this one on. These investors have gotten the message. They will no longer invest. So in essence this will do nothing but keep poor people out of work, because rich people are not going to risk their nest eggs on loser investments. Maybe you can pull out of your fantasy land book some play money to support people now. It's morons like you that are costing this country, whether you are too stupid to realize it or not.

[adsin15]

I would that this situation is terrible.

Let this be a lesson to any future companies and investors...if your company is so poorly managed that it needs billions of taxpayer dollars just to stagger on for a few months and then die anyway? Then maybe you should have picked your investments better? Or maybe run your company better?

[TulsaMom]

"I can't believe this. Obama and his crew are going Hugo Chavez on us, and we can't stop them in the Supreme Court?"

Obama will begin stacking the Supreme Court this summer, beginning with his first nominee.

[omega39-2009]

It is about the rule of law. Rich people and poor people are entitled to fair treatment under the same set of laws. This administration is defying the Constitution so that the UAW continues to throw them votes and $$$.

And don't say that Bush took part in unconstitutional action as Obama's defense. Even if he did, it does not excuse the absolutely egregious and blatantly political scheming of this Obama administration.
Posted by MadisonHamiltonJay

The "rule of law" as bought and paid for by rich people? Let's face it, if the government stood for the majority of people as it was supposed to, there wouldn't be a 100 percent return for one group of people while everyone else got little or nothing. I believe in constitutional lingo that would be referred to as "equal protection under the law".

[MadisonHamiltonJay]

omega39-2009,

It is about the rule of law. Rich people and poor people are entitled to fair treatment under the same set of laws. This administration is defying the Constitution so that the UAW continues to throw them votes and $$$.

And don't say that Bush took part in unconstitutional action as Obama's defense. Even if he did, it does not excuse the absolutely egregious and blatantly political scheming of this Obama administration.