As mentioned by a previous poster you apparently have no concept of legal rights where corporate debt is concerned. Bondholders are among the very first to get paid and have more legal rights to collect their debt than other types of creditors. That is what bonds are for, they are a lower yield investment with a higher degree of security.

Now never mind the fact that the "greedy bond holders" are retirement funds looking out for their clients. I don't give a crap if they are loan sharks from Las Vegas, their legal rights are what they are. They were right to force things into bankruptcy when they were looking at a $.15/$1.00 payout vs. the unions and govt' getting around $.40/$1.00, when by law it should be the other way around. Good for them, I hope they screw the govt' and the unions until their anuses bleed.

 

The greedy bondholders are more than just retirement funds looking out for the clients. That's not what really matters at this time. I don't want to see anyone screwed until they bleed. But the fact of the matter is had the Commodities Future Security Modernization Act of 1999 not been enacted that deregulated the financial markets we maybe would not be dealing with the problems in the economy that we are.

 

In some cases I think you are right, however in the case of Chrysler and the bond holders (and other secured debt holders) are in a position of legal advantage they would have been prior to the deregulation act. Chrysler's problems would probably still be rearing their ugly head even without the current economic downturn. Decades of poor management, poor quality, indifferent product design, and bad labor contracts have taken their toll and ultimately would have killed Chrysler anyway. The govt' was incredibly stupid to bail them out this last time, and that idiot Obama's foolish plan of telling secured debt holders to more or less drop dead just blew up in his stupid face. I know the man has to suck off the UAW to appease them, but he should have studied the laws regarding secured debt holders rights in bankruptcy before trying to get them to take the biggest loss of any group. Really really really stupid.

This should serve as a great example to everyone why an idiot politician that has never run a for profit business (or anything else for that matter) should not be trusted to interfere with a private sector business. Watch for the GM restructuring plan to take a similar road when the bond holders there realize their best bet is forcing a bankruptcy if they don't get a better deal.

 

acording to yesterday mornings newspaper headlines, both gm and chrysler corp are going to be taken over be fiat europe.

 

I thought Fiat was getting GM's euro operations only?

 

who really knows what the dirt-bag lawyers have hidden up their sleeves??

 

Opel/Vauxhall may be also taken over by Fiat (GM's European divisions). Fiat is also not taking over chrysler, only 20%. Fiat doesn't have enough resources to completely buy GM, or chrysler for that matter.

 

the report that i read said fiat was getting 35 percent of chrysler corp, the shareholders were retaining 30 percent, government was 15 percent, and workers was the other 20 percent.

and that fiat was taking over gm europe completely, and 50 percent i think it was of gm usa

 

The report was wrong then. Fiat itself is not in the best of financial situations, and they are not about to look into joining up with another sinking ship.

The current out look for chrysler is: Fiat gets 20% spread over a few years(incentives to help chrysler develop more fuel efficient cars, basically the more fiat does for chrysler, the more they get) 55% would be the UAW, and the remaining would be split between the Candadian and US. Govt.

GM right now is just looking to sell off its excess brand names, such as Saab, Vauxhall, Opel (european brands) and Hummer/Saturn. It is not about to be bought by anyone.

 

Chrysler wasn't doing real badly until energy prices (fuel) went over $4 per gallon. They weren't doing great, but not bad either. Part of Chysler's management problems were Daimler related and induced. A lot of what ails Chrysler and the rest of the auto industry goes back to the deregulation of the financial markets and banking industry. When things were regulated after the Great Depression, there were no major meltdowns in the financial markets. There weren't massive bank failures. There weren't drastic price swings in energy like we experienced in the last 8 years. This deregulation helped cause the Enron and auto industry crises and bank failures. And what the union members got out of the mess was chump change compared to what the politicians, CEO's, and stockholders got. Incidently, the driving force behind passage of the Commodities Future Modernization Act of 1999, Sen. Phil Gramm (R-TEX) stepped down from the Senate after his term expired to accept an Exec. VP position with an investment bank that lobbied for and benefitted from the Commodities Future Modernization Act of 1999 at a salary that made his Senate salary look like chump change. And the rest of us common folks are left to clean up the mess with little to work with.

 

Greg, I wonder what the tightening of credit did to the auto market for the past 6 months?

A lot, I suspect.

 

The tightening of the credit market basically snuffed out any hope that the auto sales would bottom out last fall at about 12m or so and not nearly as severely as they have so far. Had the regulations on the financial markets and banks that was passed in 1933 (Glass-Steedle Act) remained in force we probably would not have seen the excesses and huge cyclical swings in the economy that we've experienced over the last 8-10 years. And the credit market would not have dried up so severely had the large banks been following good business practices right along instead of pushing the envelope beyond the max. I mean I don't care what Congress or a President says, you don't make a loan to someone without income verification and a basic credit check. And good bankers don't lend money assuming that everything will go along as it has in good economy. Of course the political leadership for the last 25 years hasn't helped either.

 

Oh, it was a lot worse then that. Anyone up for a NINJA loan?