GM Files Bankruptcy
[Guest post by DRJ]
We can call it Government Motors from now on, since the U.S. government will own 60% and the Canadian government 12%.
Who will be in charge of the new GM for the U.S. government? The Obama Administration has chosen a 31-year-old in his first government job: Brian Deese, “a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.”
— DRJ
What could possibly go wrong?
Rich Fader (295108) — 6/1/2009 @ 3:05 pmIt’s not like he can do any worse.
Gerald A (e0a107) — 6/1/2009 @ 3:13 pm“What’s good for GM is good for the country.”
The US is going to declare bankruptcy and someone is going to bail us out? Who is going to be running ….
htom (412a17) — 6/1/2009 @ 3:19 pmThis is freakin’ unbelievable.
SPQR (72771e) — 6/1/2009 @ 3:25 pmEdward Deming just rolled over in his grave – again.
Dmac (1ddf7e) — 6/1/2009 @ 3:35 pmA perfect choice for President Obama. a peron with no background knowledge of the industry, no experience in management but he did spend the night in a Holiday Inn.
Longwalker (4e0dda) — 6/1/2009 @ 3:37 pmSorry! My finger slipped. It should read person not peron.
Longwalker (4e0dda) — 6/1/2009 @ 3:39 pmLook up Monica Lewinsky on wikipedia, she’s actually more qualified for the job.
SPQR (72771e) — 6/1/2009 @ 3:39 pmOff-topic, but such a perfect headline I couldn’t resist:
Man who beheaded bus passenger a public menace: MD
Now we know, and if they got an MD to confirm it, then I guess it must be true. At least they didn’t dilute their journalistic standards by quoting anonymous “experts.”
ras (20bd5b) — 6/1/2009 @ 3:44 pmYouth is the future of the state- controlled populace. Obama needs folks under 50. Old people need to go away.
Vermont Neighbor (efb5a9) — 6/1/2009 @ 3:45 pmIt’s a nice fluff piece by the NYT, but this guy is little more than a yes-man to the Administration. He is not going to be trustee-in-bankruptcy or even Third Assistant Vice President for Toilet Supplies Procurement at GM.
I do agree with “Government Motors”.
nk (157acd) — 6/1/2009 @ 3:51 pmPrediction: Deese will soon be revealed as having no real authority. Even Obama wouldn’t trust the automotive industry acumen of a wet-behind-the-ears rookie who’s never run so much as a popsicle stand.
Rather, Deese’s job will be to act as front man, delivering orders mandated by others. If he steps out of that role and tries to actually make decisions himself, he’ll be turfed.
So who’s the real power behind the throne? Who most needs a puppet to hide behind? Michelle? Ehmanuel? Obama himself?
ras (20bd5b) — 6/1/2009 @ 3:54 pmWhat is the difference between a “not-quite graduate” and a “dropout”?
John Galt (fde9ed) — 6/1/2009 @ 4:03 pmMy question is, will Ford end up thriving because of all of the people who want nothing to do with a government made car, or will Ford get taken out at the knees since they are competing with those who make the rules.
Really, if Obama deals with business competitors like political rivals (Can we say “Ryan” and what’s her name whose state senate seat he out-maneuvered for), it is get them out of the way. My guess is either Ford flops and dies, flops and
gets taken overis reconstructed post bankruptcy, or exists in a token presence to show the government doesn’t have a monopoly on the automodile industry. (Which raises the question, just who would be able to go after the feds on anti-trust charges even if there was a good case for it?)I heard that a former Romanian official who was in charge of the auto industry under Communist rule has said that government run car companies don’t work.
Also heard that the Chinese openly laughed at Geiger when he told them the US f9inancial system and bonds weresolid, and they could feel safe continuing to invest in the US.
What a world.
MD in Philly (3d3f72) — 6/1/2009 @ 4:15 pmThis will just serve to set up the ‘real’ bankruptcy in 5-10 years, from what I’ve been reading the last week or so from a variety of finance pundits. First, the private bondholders had to be run off the road, and compared to the Treasury bond ‘vigilantes’ these particular guys came off as truculent as a bunch of One Bullet Barney Fifes. Although, I’m sure some details will surface later that will explain their capitulation in terms of threats and innuendos from the usual sources. It had to be something pretty serious to make them walk away from their money. Regardless, with them out of the way, the rest of the story promises to be a slo-mo wreck as it unfolds. Think Amtrak, USPS, etc.
allan (fbbd31) — 6/1/2009 @ 4:17 pmMD, the laughing was thanks to Americans being so scrutable, or screwable. OK, both.
allan (fbbd31) — 6/1/2009 @ 4:24 pmThere’s no one dumbest thing about this. One remarkably dumb thing though is that dirty socialists are markedly less likely to buy a domestic car than for real Americans are. There is actual data what shows this. Me I’ll never buy a car what a greasy UAW thug pawed all over ever again, and that includes Ford. It’s just too distasteful. That little boy on Baracky’s dirty socialist dream team better have a plan for how to make dirty socialists want to drive crappy American cars I think.
happyfeet (71f55e) — 6/1/2009 @ 4:30 pmAs Glenn Reynolds would say:
“The country’s in the best of hands.”
Just another reason to absolutely refuse to own another GM vehicle.
Dr. K (0fdffa) — 6/1/2009 @ 4:34 pmWTF??? This guy is less qualified than Obama — and that’s saying something! Holy Crap are we **cked!!
Capitalism dies with a wimper… Pravda: Of all the fricken places I gotta read the Truth in PRAVDA!!!!
http://english.pravda.ru/opinion/columnists/107459-0/
American capitalism gone with a whimper
It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.
True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.
Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.
First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.
Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.
These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, loses and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?
These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties and powers of the American congress (parliament). Again, congress has put up little more then a whimper to their masters.
Then came Barack Obama’s command that GM’s (General Motor) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.
So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK’s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.
Again, the American public has taken this with barely a whimper…but a “freeman” whimper.
So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance and control how private companies give out pay raises and bonuses? Senator Barney Franks, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.
The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.
The proud American will go down into his slavery with out a fight, beating his chest and proclaiming to the world, how free he really is. The world will only snicker.
J. Raymond Wright (e8d0ca) — 6/1/2009 @ 4:40 pmYeah, J Raymond. Guess you missed that 5/29 on the Jury Talks Back.
Dr. K (0fdffa) — 6/1/2009 @ 4:42 pmDoes he own a car?
American?
Model?
How long has he held a license?
Auto industry experience: He once
“…slept in the parking lot of the G. M. plant in Lordstown, Ohio,”
I should run the LA Times for Obama… I’ve read it.
SteveG (c99c5c) — 6/1/2009 @ 4:46 pmWow.
Now that I look at things through the eyes of the Obama Administration, I can do anything.
When JFK exhorted us to “Ask not what your country can do for you, but what you can do for your country” I think he sort of assumed that if some kid with no auto experience beyond driving home from college offered to run GM for his country, the President would say ummmm “not yet, love the enthusiasm though”
His lack of talent is more than compensated my his enthusiasm.
This is so wrong on so many levels.
Dr. K (0fdffa) — 6/1/2009 @ 4:48 pmWe’ve only got a few month’s Iraq war funding invested in GM and we got 60% of the company for our money.
Sounds like a pretty good long shot bet to me.
poon (093c46) — 6/1/2009 @ 4:50 pmI’ve said it before and I’ll say it again:
I can run any company in the country into the ground at less than half the price current executives and experts are being paid.
Just let me know.
Ag80 (425b0a) — 6/1/2009 @ 4:52 pmWe got 60 percent of a money-losing, bankrupt company, with $173 billion in liabilities and just $82 billion in assets — a true triumph of business, Obama-style.
Brother Bradley J. Fikes, C.O.R., (a29db1) — 6/1/2009 @ 4:58 pmLiberals are turning America into a communist hellhole.
What else is new?
Dave Surls (af5780) — 6/1/2009 @ 5:05 pmThe news media will give him a pass on this, like all the other times, but what happens when the GM cars don’t sell in two or three years? They will be designed by political consultants and we will be strongly encouraged to buy them. Personally, I think there will be a lot of people driving the car they currently own ten years from now.
Mike K (2cf494) — 6/1/2009 @ 5:05 pmWhere’s that can do American spirit, Bradley?
The debts will be taken care of in bankruptcy court…and green cars to compete with the Prius will soon be rolling off GM production lines.
GM is such a good bet, I picked a few extra below $1.00 shares to add to the ones I own as an American taxpayer!
poon (093c46) — 6/1/2009 @ 5:11 pmNow poon’s over here raving incoherently…
I feel for everyone here trying to discuss issues with substance…
Prepare yourself for sophmoric taunts and schoolyard insults; it’s how he rolls…
But, you know, he’s probably a good man, just like his idol Obama…
Bob (8afff9) — 6/1/2009 @ 5:19 pmThere are plenty of experienced and available liquidation CEO specialists out there.
Some also are short term types who specialize in reorganization and then handing it off to a new CEO.
No reason to go with a green kid on this.
DayTrader (ea6549) — 6/1/2009 @ 5:20 pmAh poon – the liberal mindset in action.
Who exactly do you thinks pays for the BK? Everyone who relies on credit to fund businesses and mortgages. With the government, that means taxpayers ultimately pick up the tab.
But I guess tht’s OK, since you probably are just another slug sucking on the government teat.
Dr. K (0fdffa) — 6/1/2009 @ 5:20 pmAfter pouring $1 trillion+ into Iraq with no hope for a return, I like getting a little equity this time around, Dr. K.
The fact that this investment may actually help Americans is a plus, too.
poon (093c46) — 6/1/2009 @ 5:31 pmYou are truly an idiot.
Dr. K (0fdffa) — 6/1/2009 @ 5:34 pmI am interested on how they will recapitalize this company. After the way the actual investors were treated this time around, who in their right mind would be willing to put their money into this company. Couple that with government’s perfect track record on running companies, and it seems like it would be any broker’s fiduciary duty to make sure that their client’s steered clear of this.
The troll infestations at all of the sites I regularly read it at a crescendo. In referring to JD’s 1st Rule of Trolls, this does not look good for Teh One.
JD (6675bb) — 6/1/2009 @ 5:38 pmThis kid is not qualified to run a Subway, and they have him out in front of this? Sadly, he is no less qualified than Rattner.
JD (6675bb) — 6/1/2009 @ 5:39 pmJust another sterling example of the quality education available at government schools.
AD - RtR/OS! (465dbd) — 6/1/2009 @ 5:46 pm#36…refers to “poon”
AD - RtR/OS! (465dbd) — 6/1/2009 @ 5:47 pmHey, JD.
Thought of anything intelligent to add to the discussion yet?
“After the way the actual investors were treated this time around”
How should have the investors in a failed company been treated, BTW?
poon (093c46) — 6/1/2009 @ 5:48 pmI have a feeling the last time this guy got any “poon” was when he was coming out his mothers diseased twat.
Mr. Pink (b0e177) — 6/1/2009 @ 5:50 pmWell, poon, the SECURED bondholders would have been at the FRONT of the line BEFORE the government and union.
Any idiot should know that.
But you must be a SPECIAL type of idiot.
Dr. K (0fdffa) — 6/1/2009 @ 6:00 pmSo, does not-quite-graduate mean he still has to take his finals or he flunked them and said the heck with it?
I’m sure the Obamas had a wonderful “date night” on Friday. That’s all that counts.
PatAZ (9d1bb3) — 6/1/2009 @ 6:02 pm“SECURED bondholders got stock just like everybody else.”
Why, Dr. K?
Looks like you don’t understand that investments come with some risk.
Unchecked Capitalism is now as discredited as unchecked Marxism.
Looks like Obama’s trying a new way.
Good for him.
poon (093c46) — 6/1/2009 @ 6:09 pmpoon – Explain to us why the UAW got rewarded ahead of the secured creditors. Looks like Obama is trying a new way – that is true, outside the boundaries of bankruptcy law, rewarding unsecured creditors before secured creditors, and to a greater degree. It is new, yes. Looks like you do not understand bankruptcy. That makes the list of things you have demonstrated a complete lack of knowledge about to be about 1.837 miles long.
JD (6675bb) — 6/1/2009 @ 6:15 pmYeah. Every country should have a leader who negotiates Chicago style.
This poon is an obot, so I don’t blame him. And Obama is a tyrant — a coddled figurehead primed to do his bosses’ work. The ones I really blame are the media. These stories have hit the saturation point. Someone at the editor’s desk should have enough balls to print what’s going on, even if Fear Leader has to handle some straight talk from his foot soldiers.
Vermont Neighbor (efb5a9) — 6/1/2009 @ 6:25 pmWith Obama pixie dust, all that GM debt disappears magically. The taxpayers pick up the tab, so it’s not real money. And his union cronies at UAW get the assets. What a presidency!
Brother Bradley J. Fikes (0ea407) — 6/1/2009 @ 6:28 pmIf you do not know the rules, you should educate yourself before you demonstrate your ignorance of the subject.
In the old days (before Obama – OB), bankruptcy gave priority to secured creditors, unsecured creditors, and stockholders for a reason.
I understand it – do you? Seems not.
Equity investors – stockholders – get a share of the profits and take the highest risk. They also expect the highest reward.
Secured investors – bondholders – get interest payments and eventually are supposed to get their money back. A significantly lower return for significantly lower risk.
Unsecured investors are typically short term obligations such as suppliers and vendors and workers. They get paid on a regular basis, but have no claim on the assets.
Here the government and unions – the UNSECURED creditors jumped ahead of the Secured bondholders. And were paid off first with the majority of the shares in the new company.
Which brings up another point. Bondholders are forced to take worthless shares for their bonds – getting screwed twice for the price of one – they get less than they should have AND they are offered MORE risk.
And who do you think gets screwed? How about any pension fund that was invested in GM Bonds. That could very well be the retirement of your parents.
So the people guilty of “unchecked capitalism” are the retirees who invested in GM Bonds expecting a safe return.
Well done, numbnuts
Dr. K (0fdffa) — 6/1/2009 @ 6:29 pmSomeone at the editor’s desk should have enough balls to print what’s going on, even if Fear Leader has to handle some straight talk from his foot soldiers.
I’d guess most of the editors are too fearful to challenge the status quo. They either don’t understand that the status quo of biased, inaccurate stories is part of their problem, or, worse, they welcome the Obama stenography.
Brother Bradley J. Fikes (0ea407) — 6/1/2009 @ 6:36 pmDr K – I know that one of the State of Indiana pension funds is still trying to fight the GM fiasco. Given Teh One’s strong-arming of everyone involved, it shows some spine that they remain willing to fight this travesty. I believe there are a few others that are doing so as well. This really is theft and a huge political transfer payment, being done right in front of our eyes, and the MSM just nods their head and continues to praise Teh One.
JD (6675bb) — 6/1/2009 @ 6:38 pm“If you do not know the rules”
Dr. K.
GM went bust.
The bondholders are lucky to be getting anything.
Are you a GM bondholder, or do you just enjoy squealing?
poon (093c46) — 6/1/2009 @ 6:39 pm#48 – JD
Why should the press do anything but nod? They, like poon, believe that it was profiteering and taking inordinate risk.
Dr. K (0fdffa) — 6/1/2009 @ 6:40 pmIf a Troll leaved a bunch of poon in the forest, would anyone smell it?
Dmac (1ddf7e) — 6/1/2009 @ 6:47 pm#49 – You are still and idiot.
You still don’t know the rules.
What’s worse is that you don’t care to learn them.
So that makes you an ignorant idiot.
No, I do not own any GM bonds to my knowledge (but a fund holding some retirement money may have some).
But that’s not the point.
If investors cannot be sure that they will be treated fairly in bankruptcy, where is the incentive to invest capital in bonds?
That is a much larger question that your tiny gnat’s brain cannot even begin to comprehend.
Dr. K (0fdffa) — 6/1/2009 @ 6:49 pmpoon – Most people in your situation, after having demonstrated a sub-childish knowledge of the subject they comment on, when called out on same, change the subject or simply quit digging. Kudos for trying to prove even more forcefully how big of a mental midget you are.
JD (6675bb) — 6/1/2009 @ 6:49 pmDr K – Teh One is making up new rules, and poon is happy. That is all its single celled brain needs to know.
JD (6675bb) — 6/1/2009 @ 6:50 pm#49 – And, oh yeah, but the government and the unions were far LUCKIER because they cut in line.
Dr. K (0fdffa) — 6/1/2009 @ 6:50 pmJD – Does an amoeba have a brain? It is simply responding to the stimulus provided.
Dr. K (0fdffa) — 6/1/2009 @ 6:52 pmDr K – It is not luck when you get to make the rules that benefit you and your political allies. Just sayin’
JD (6675bb) — 6/1/2009 @ 6:55 pmSorry folks, but your capitalism didn’t die.
Larry Reilly (45e7a4) — 6/1/2009 @ 6:57 pmIt committed suicide. And not without a bunch of innocent bystanders being hurt.
What’s happening now is just the mop-up operation, albeit misquided.
And not that it will do any good.
But hey, you had your chances. ESCALADES for everyone! Eh? As George Will said on the Sunday yak-fest: GM simply made the cars we wanted. (Never mind the government subsidies for the hugely profitable oil companies, and the orchestrated stanching of anything that showed possibility of energy efficiency.)
Keep whinin’ in here dudes. It doesn’t impinge on real reality.
poon demonstrates his ignorance of bankruptcy law with this: “The bondholders are lucky to be getting anything.”
Showing your ignorance of bankruptcy law and the law of priority like that is not impressive. Ignoring that the Obama administration has been using extortion to gain an unlawful advantage for the unions hardly gives you any credibility.
SPQR (26be8b) — 6/1/2009 @ 6:58 pmLarry, conspiracy theories don’t substitute for actual economic knowledge.
SPQR (26be8b) — 6/1/2009 @ 6:59 pm“You are still and idiot.
You still don’t know the rules.”
Dr. K.
You obviously don’t know the rules of civil discourse.
As for “the rules” as they apply to GM…I believe is that the government makes the rules.
Why is that so hard for the failed Capitalists to understand?
You had your shot, you almost destroyed us all.
JD,
Keep spewing, you just might come up with something intelligible.
poon (093c46) — 6/1/2009 @ 7:02 pmLarry, you are correct. Capitalism didn’t just die.
It was murdered by Obama and his cronies.
Dr. K (0fdffa) — 6/1/2009 @ 7:02 pmThe more I read of its comments, the more I am convinced poon is Staunch Brayer.
Paul (creator of "Staunch Brayer") (290fb9) — 6/1/2009 @ 7:04 pmpoon – I’m just speaking truth to stupidity.
Seriously dude, stop digging. And recall what Twain said: “Better to keep your mouth shut and be thought a fool than to open it and remove all doubt”.
Dr. K (0fdffa) — 6/1/2009 @ 7:05 pmpoon, just when did Congress amend the Bankruptcy statutes to favor unions?
SPQR (26be8b) — 6/1/2009 @ 7:06 pmNo, the Govt doesn’t. At least, not on the fly.
Bankruptcy law, as it actually exists, says that Secured Bondholders go ahead of Unsecured Bondholders. You pay extra money for secured status.
Explain the logic that says a minority holder of unsecured bonds should get better treatment than a group that holds MORE of a company’s debt in SECURED bonds?
Scott Jacobs (90ff96) — 6/1/2009 @ 7:07 pmScott:
“I won”.
Dr. K (0fdffa) — 6/1/2009 @ 7:11 pm@Poon:
Read the following link in it’s entirety. I will quiz you to make sure you have done so.
Scott Jacobs (90ff96) — 6/1/2009 @ 7:12 pmI believe the government makes the rules.
poon loves it some authoritarian totalitarianism.
Scott – It cannot explain it. It does not know a thing about it. It is a fountain of idiocy.
JD (6675bb) — 6/1/2009 @ 7:12 pmDr. K,
Patterico is now in the vanguard of a logical, rational, resurgent Republicanism.
I suggest your kind of gutter talk might be more comfortable at an outpost of the old guard.
Try Goldbrick’s site.
JD can show you the way.
poon (093c46) — 6/1/2009 @ 7:13 pm@Poon:
Read this.
Scott Jacobs (90ff96) — 6/1/2009 @ 7:14 pmpoon:
Stupid is as stupid does.
And son, there ain’t no fix for stupid.
It’s quite simple. If you don’t like being called stupid then don’t act stupid.
You’re welcome.
Dr. K (0fdffa) — 6/1/2009 @ 7:16 pmpoon, so you are making up stuff again?
SPQR (26be8b) — 6/1/2009 @ 7:16 pmWho is Goldbrick? And why does poon insist on being so dishonest?
JD (6675bb) — 6/1/2009 @ 7:17 pmI love it when people that lie, mischaracterize, call names, distort, and engage in all sorts of intellectual dishonesty complain about a lack of civility. The unintentional irony is always so rich.
JD (6675bb) — 6/1/2009 @ 7:19 pmDr. K,
Again, if you want to be taken seriously, learn to write like an educated person.
I can’t take your gutter spew seriously.
JD,
You know where Goldbrick’s site is.
Is he back from spending the money he collected in his fundraiser yet?
Pretty neat trick, beg for money to keep your site open, then take a nice vacation from writing.
poon (093c46) — 6/1/2009 @ 7:26 pmPoon, you were asked a direct question. Please answer it. It would be to your benefit to attempt a discussion.
Scott Jacobs (90ff96) — 6/1/2009 @ 7:28 pmWho is Goldbrick? Is this some codeword for something?
JD (6675bb) — 6/1/2009 @ 7:29 pmCodeword only for poon’s delusions.
SPQR (26be8b) — 6/1/2009 @ 7:31 pmJD,
Brother Bradley J. Fikes, C.O.R. (0ea407) — 6/1/2009 @ 7:31 pmIt’s a codeword for “I’m a banned troll, but I have no life of my own, so I’ll just keep on infesting Patterico.”
Gotcha. I asked earlier what the multitude of names were for this one. I could be wrong, but the longer it hangs around, the more tmj, sniffles, parsnip-ish it seems to be.
JD (6675bb) — 6/1/2009 @ 7:33 pmAfter pouring $1 trillion+ into Iraq with no hope for a return, I like getting a little equity this time around, Dr. K.
A little equity is right. Good luck cashing out. They don’t make a denomination that small.
Mike K (2cf494) — 6/1/2009 @ 7:42 pmI remember back when Chrysler was trading around $3.00 a share, MikeK.
Then the government bailed them out and its shares went up to, what?
$70.00 a share?
Good times.
poon (093c46) — 6/1/2009 @ 7:46 pmIn their world, Mike K, increased taxes, transfer payments, and subsidized vehicles are “equity”. Their view of the systems of capitalism are so distorted.
JD (6675bb) — 6/1/2009 @ 7:47 pmLast chance, Poon…
Scott Jacobs (90ff96) — 6/1/2009 @ 7:49 pmAll of that bailout money, and they still wound up in bankruptcy, which is what was being sold to the public, that we could not have the automakers go into bankruptcy. Then, once there, Gattner and Deese, a combined zero days of experience running a business, much less the auto industry, begin the government takeover of GM, etc …
JD (6675bb) — 6/1/2009 @ 7:50 pm“Sorry folks, but your capitalism didn’t die.
It committed suicide.”
Capitalism will never die, but you can stunt its growth by attempting to replace it with state controlled economies.
They always fail (not some of the time, all of the time), but hey, if you want to live like people in Vietnam, the PRC, North Korea, Cuba…enjoy.
Dave Surls (af5780) — 6/1/2009 @ 7:50 pm____________________________________
Who will be in charge of the new GM for the U.S. government? The Obama Administration has chosen a 31-year-old in his first government job: Brian Deese,
I’d swear that information actually was a bit of parody from a late-night comic or certainly a fervent anti-Obama individual or group. That it is, in fact, an authentic story — that it’s honest-to-goodness reality — heightens the sense that America over the next X number of years is headed into some kind of Twilight-Zone-ish stupor and idiocy.
Obama is like a case of life imitating art (and very bad art, at that).
Mark (411533) — 6/1/2009 @ 8:18 pm“I’d swear that information actually was a bit of parody from a late-night comic or certainly a fervent anti-Obama individual or group. That it is, in fact, an authentic story”
Hey, dude, Barack Obama is president of the United States. Nothing could top that.
Dave Surls (af5780) — 6/1/2009 @ 8:23 pmThe UAW members who work for GM are officially on welfare as of today, in my view.
voiceofreason2 (f237cf) — 6/1/2009 @ 8:36 pmI’ll keep supporting non-union workers by buying Toyota — consistently better product first and no hidden tax to support 80K a year line workers such as at Ford or GM.
Has Deese paid his taxes or has he ever earned enough money before to pay any taxes? Enquiring minds want to know if he is just another Obama tax cheat.
daleyrocks (5d22c0) — 6/1/2009 @ 9:08 pm“Explain the logic that says a minority holder of unsecured bonds should get better treatment than a group that holds MORE of a company’s debt in SECURED bonds?”
We don’t know how GM’s secured and unsecured bondholders are going to get treated in bankruptcy yet, Scott.
poon (093c46) — 6/1/2009 @ 9:50 pmWell, would you say it is logical to assume that they would be treated in a manner similar to the way they were treated at Chrysler?
Scott Jacobs (90ff96) — 6/1/2009 @ 9:56 pmComment by poon — 6/1/2009 @ 9:50 pm
No, but we know how the Gov’t wishes to treat them, and it isn’t in line with accepted, and lawful, BK practices.
AD - RtR/OS! (465dbd) — 6/1/2009 @ 9:59 pmEventually we’ll find out whether or not the Judicial Branch is willing to overthrow Constitutional protections as easily as the Chi-town Mob is.
We can only hope that today’s jurists’ have more back-bone (and staying power) than did the leading jurists during the New Deal.
Scott,
It’s my understanding than GM and Chrysler issued different types of bonds.
And it was logical to assume that the government would bailout Lehman Brothers just like it bailed out Bear Sterns.
Logical, but wrong.
poon (093c46) — 6/1/2009 @ 10:05 pmYour understanding is flawed, then. Secured Bonds are Secured bonds, period. There isn’t a difference from one company to the next. While a company could choose to not have secured bonds, if they have them, then they are treated the same, company to company, and have the same rights and expectations.
Now, from what you said, am I correct in assuming that you disagree with how the Government/Chrysler (assuming there was any difference at that point) treated the UAW verses the Secured Bond-holders?
Scott Jacobs (90ff96) — 6/1/2009 @ 10:09 pmMany of those who worked for Bear didn’t consider that a bail-out, anymore than a bank take-over by the FDIC isn’t a bail-out either – which is about what happened to Bear.
AD - RtR/OS! (465dbd) — 6/1/2009 @ 10:11 pmScott,
Do you have a problem with the government aggressively negotiating with GM and Chrysler’s debtors to get the best deal they can?
poon (093c46) — 6/1/2009 @ 10:15 pmScott @ #96. That would be one hell of an assumption to make. poon wants Teh One to change things, including making up his own version of the bankruptcy laws as they go along. It could not care less about secured creditors, or unsecured creditors. They won, and they are going to change sh*t. Deal.
JD (6675bb) — 6/1/2009 @ 10:16 pmSee? It is not the least bit bothered that the government is doing what it is doing, in fact, it thinks it is doing the right thing. poon, please explain to us how the unsecured folks @ the UAW got placed in line, with a larger stake, than the secured creditors. Then, explain to us how that tracks with existing bankruptcy laws, not the laws as you and Teh One would wish them to be at some point in the future. Until you have demonstrated even a base level of understanding of the topic, it is clear that you are engaged in a progressive asspull, that none of us really care to watch.
JD (6675bb) — 6/1/2009 @ 10:18 pmWhen those aggressive negotiations include threats of the bully pulpit, and hurt everyone BUT the democrat-supporting UAW, yes I do.
Though to be honest, I do have a problem stepping in and interfering in private enterprise. Bankruptcy court exists to handle this, not the Govt. It short-circuited the system that has been in place for quite some time, and done well enough.
I suspect that it did so, btw, because the UAW would have gotten no where the sweet deal it got (forget the simple stock gift, it got multiple seats on the BoD).
Scott Jacobs (90ff96) — 6/1/2009 @ 10:19 pmJD, you’re my buddy, but I would thank you to not ACTUALLY insert words into Poon’s mouth. He’s being civil, and is engaging in a fairly honest discussion. I would hate for that to change because of snark.
🙂
Scott Jacobs (90ff96) — 6/1/2009 @ 10:21 pmWhatevs … this one has been trolling sites for days, puking out its claptrap. It may be engaging honestly for the moment, but that will change. It is also engaging from a position of ignorance, and shows no inclination to learn.
Mock and scorn, my friend. Mock and scorn. Point and laugh, even.
JD (6675bb) — 6/1/2009 @ 10:26 pmSo long as he is civil and at least attempts an honest discussion, I’m willing to give him a chance.
Scott Jacobs (90ff96) — 6/1/2009 @ 10:27 pmScott,
I don’t share your hatred of the UAW.
If the UAW getting GM stock is such a good deal, why is the government getting GM stock such a bad deal for taxpayers?
poon (093c46) — 6/1/2009 @ 10:28 pmMaybe I spoke too soon.
I never said that I hated the UAW. I’m not a member of their fan-club, but I hardly hate them.
It’s a bad deal because the people who SHOULD be getting that stock are neither the UAW or the Govt. The stock should go to private investors who held Secured Bonds. Like the State of Indiana’s pension system. They got the shaft along with “Hedge funds” while the UAW made out like bandits.
Scott Jacobs (90ff96) — 6/1/2009 @ 10:33 pmScott – See comments 23, 32, 42, 49 & 61. I was not actually putting words in its mouth, I was outlining the positions it has taken in this very thread.
JD (6675bb) — 6/1/2009 @ 10:34 pmMaybe because the UAW is not entitled to any? Ever think of that? And even if it is argued that they are entitled to that, why in the world would they be entitled to more than the secured creditors, when the default position for the UAW in a bankruptcy like this would be zip, zero, nada, zilch?
JD (6675bb) — 6/1/2009 @ 10:36 pmGood night, all. Have fun with the trolls. Play nice 😉
JD (6675bb) — 6/1/2009 @ 10:39 pmActually, JD, the UAW WOULD be entitled to some compensation, but only after the Secured Bond-holders had their bite at the apple. Usually, that means there is nothing left, but such are the risks…
Scott Jacobs (90ff96) — 6/1/2009 @ 10:41 pmJD,
The idea that the retirees have less rights than the bondholders do is…not one that I share.
Especially if every group agreed to their share of the New GM.
Wouldn’t the government be on the hook to pay some of what the GM retirees were owed if they didn’t get anything out of bankruptcy?
Certainly a motivator for the government to help the UAW get a chunk.
poon (093c46) — 6/1/2009 @ 10:45 pmHmmmm. Dunno why it did that… I’ll try again.
Actually, that’s not really how the pension system works for the UAW, and anyways half the damned problem for the Big Three are the costs added on to each car to pay those legacy costs.
Which come from very sweet contracts long forced on the automakers by the Govt during mediation.
But what if those groups agreed only after they were threatened with abuse from the Bully Pulpit? “Agree to this, or we will get up at press conferances and DESTROY YOU. We will send the SEC and the IRS to dig through every page you ever put a number on, and if you misplaced a single nickle, we will drag you into court and destroy you regardless of whether it was a mistake or intentional.”
Would you have a problem with such agreements then?
Scott Jacobs (90ff96) — 6/1/2009 @ 10:57 pmScott,
I don’t mind the government negotiating aggressively. It is the entity putting up $30 billion? in fresh cash to keep a bankrupt enterprise going. And I just like the idea of the government getting the taxpayer’s a good deal.
I read the bondholders wanted to get a 58% equity stake and give the UAW 42%.
Sounds like they’re both getting considerably less.
Couldn’t the bondholders just have said no and taken their chances in court?
poon (093c46) — 6/1/2009 @ 11:00 pmBut what about the taxpayers who had long since giving billions of their own money to GM, with the expectation (and agreement from GM, frankly), that they would get that money back? Why don’t they get any due consideration? Why do they take a back-seat to people who gave GM no money?
They are. However, those numbers sound about right judging from who held GM’s debt (actually, the Secured Bond-holders held far more than 16% more debt than the UAW). Now, if it was just “they are both getting less”, I would be less upset (though still peeved that the Govt is short-circuiting existing bankruptcy law). however, the UAW will end up with more stock than the Secured Bond-holders, plus more seats on the BoD.
That is not equitable, and I would love to hear an explanation for why that would happen that doesn’t involve “playing favorites with the UAW”. I really would, because it’s all *I* can think of, and it REALLY makes me mad that the Govt would a) do that and b) be allowed to do it.
Scott Jacobs (90ff96) — 6/1/2009 @ 11:07 pmWell Scott,
You certainly seem to value Capital far more than you do Labor.
Let’s hope for both their sakes that GM’s shares rise considerably in value.
poon (093c46) — 6/1/2009 @ 11:16 pmHere’s the other thing… It should never have entered into the process. Even if I allow that the bailout money was a good idea (I don’t, btw, and I called this as the eventual outcome when the first money was given), the Govt should not have used threats to force people into giving in. Would you think it was ok for me to say “Either you sell me your car for 50% what you were hoping to get, or I’ll start telling everyone you know and work with about our gay afair, including detailed lies about where, when, and how”?
Sure, it wouldn’t be true, and you could easily defend yourself, but there would still be a hit to your reputation.
Technically, yes. But when the Govt wants to get you, they. Will. Get you. Ask Scooter Libby. During an investigation into the Plame leak, he confused a few dates, and was tried for obstruction. The entire weight of the federal system came down on him, and found something to use. Ignore that they knew who the leak was (no one in the Bush Admin), they wanted a body, so they got one.
Also, consider that Hedge Funds largely trade on their rep. If it gets out that you are being investigated by the feds, the people who gave you money to invest take it back and go elsewhere. Even if it is malicious and absolutely unfounded – even if the prosecutor later appologizes and admits it was a witch hunt, you will always be connected to an investigation, and people will only very slowly come back.
Such things RUIN companies. It doesn’t matter that they would be innocent, because not only can pretty much ANYTHING lead to a perjury or Obstruction charge, but the investigation alone (even if it doesn’t find anything) is enough to ruin some people. That’s why such things are supposed to be secret (but in a DoJ that’s apparently very politicized, such things rarely STAY a secret).
Scott Jacobs (90ff96) — 6/1/2009 @ 11:17 pmThe bankruptcy process encourages parties to negotiate rather than litigate but negotiations should be based on the legal claim status of the parties under the Bankruptcy Code. Instead, in the Chrysler bankruptcy, the Obama Administration used its political and governmental power to force superior claimants like the bondholders to subrogate their claims to the UAW. It’s nothing more than the secular Golden Rule: “He who has the gold, makes the rules.”
DRJ (180b67) — 6/1/2009 @ 11:20 pmThey did, by objecting to the sale of the Chrysler assets to Fiat/new Chrysler. They lost and then (as I understand it) they negotiated in lieu of appealing the sale. However, I think the Indiana pension funds are appealing the denial of their objections to the federal district court.
DRJ (180b67) — 6/1/2009 @ 11:23 pmI could list the reasons why I really don’t think that will happen, and why I think the Govt will have to keep pumping money into GM (throwing good money after bad) for the foreseeable future.
Here’s the biggest two reasons why I think the stock won’t rise.
1 – The cars Obama wants to have them make (am I the only one who sees the irony with govt-ordered production from a guy named “car czar”?) will cost more and have fewer desired features that cars made by Toyota and such. If they do manage to have the features people want, those will lag a full year at LEAST behind the inovations by other car-makers. That is because a fully privately-owned company has an incentive to anticipate the market, and to respond very quickly to consumer demands. Also, they can more freely steam-line production to save costs (thus keeping price down) than those who are run by a body that is almost 50% made up of people who refuse to even take a 10% pay cut to save a company. The UAW won’t steamline because it would mean removing workers, which lessens it’s membership, which lessens it’s power.
2 – No private person will be willing to invest in a company (or even an industry) where those who get secured bonds can be forced to give up their claims. Why would ANYONE wish to hold a company’s debt when the govt can change the rules regarding how you collect on that debt? This will kill investment, at least in Chrysler and GM (and frankly I think in a lot of other places).
Scott Jacobs (90ff96) — 6/1/2009 @ 11:26 pmDon’t forget the U.S., Canadian and Ontario taxpayers are kicking $40 billion into GM’s coffers as part of the deal.
GM shouldn’t have to sell bonds for quite a while.
Innovations are nice, but I believe financing sells cars, too. GM should be in a position to offer nice financing packages with all the government cash in the bank.
poon (093c46) — 6/1/2009 @ 11:47 pmConsidering they burned through what, 100 billion in less than 6 months, I don’t think it will go as far as you think it will…
Scott Jacobs (90ff96) — 6/2/2009 @ 12:38 amIn finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest and to repay the principal at a later date. A bond is a formal contract to repay borrowed money with interest at fixed intervals.
In simple terms, the US Govt just stepped between the GM bondholders and GM the corporation which was indebted to the bondholders. In essence, their actions severely reduced the ability of the bondholders to be repaid both interest and principal on the money they loaned to GM. Evidently, the bondholders as a group agreed to a renegotiated financial agreement which would provide some, but not all, repayment of monies loaned to GM in the form of bonds. Not only does this reek of govt intervention in a private contract, but will virtually guarantee that higher risk premiums will be required to compensate future bondholders for the added of risk of such govt interference going forward. I have learned ways to profit from these dastardly actions, but I would much prefer living in a nation where legal contracts are protected from extralegal action taken by govt entities.
It is not a question of valuing capital over labor. Rather it is valuing the rule of law, laws which apply to both capital and labor. Capitalism is at its core a system whereby individuals can freely participate in an economy whether through their labor and/or their excess capital beyond expenses, or through capital borrowed. They are free to act individually or enter into group enterprises. Capital is nothing more than a means of facilitating transactions within an economy. A very simple concept which has been complicated and often abused by a host of different political interests and ideologies, from democracies to dictatorships, and everything in between.
allan (0c9912) — 6/2/2009 @ 12:39 amThat isn’t GOVERNMENT cash in their banks, that’s MY cash. YOUR cash. That’s the problem! It wasn’t the Govt’s money to use like this. That’s Highway money. That’s Bluecross/blueshield money. Not “try to get into manufacturing” money.
Scott Jacobs (90ff96) — 6/2/2009 @ 12:41 ampoon, you ignorant slut.
Please enlighten us as to where labor can get a paid job if it were not for capital.
Unions are dying in this country, and this is the reason why.
By having the government step in, labor has not had to give anything up as far as their contracts go. And THAT would have been dictated by a real bankruptcy.
Dr. K (0fdffa) — 6/2/2009 @ 2:48 am“Unions are dying in this country”
Union Membership Up Sharply in 2008
http://www.nytimes.com/2009/01/29/us/29labor.html
Are you ever right, Dr. K?
Scott,
Sounds like you’ve gone back to wishing things were how they “should” be instead of accepting how they are.
GM will be getting the cash, they should use it in the best manner they can.
poon (093c46) — 6/2/2009 @ 7:46 amYes, if government expands, then the union rolls will expand.
Union membership in the private sector is another matter.
Steverino (69d941) — 6/2/2009 @ 7:51 ampoon, you seem to have no idea what GM’s burn rate is.
SPQR (72771e) — 6/2/2009 @ 8:03 amHe seems to have no idea.
Period.
Dr. K (eca563) — 6/2/2009 @ 8:12 amMeanwhile, more double-talk from Obama about the govt “not running” GM when in fact he is running GM.
Is anything this guy says truthful?
SPQR (72771e) — 6/2/2009 @ 8:20 amYeah.
“He won”.
Dr. K (eca563) — 6/2/2009 @ 8:31 amYeah.
“I won”.
Dr. K (eca563) — 6/2/2009 @ 8:32 am“Welcome to Argentina!”
AD - RtR/OS! (f5973e) — 6/2/2009 @ 10:32 amPeronista, viva!
SPQR (72771e) — 6/2/2009 @ 2:32 pmAnd Michelle has better arms than Eva, but is not as Hot as Evita!
AD - RtR/OS! (f5973e) — 6/2/2009 @ 2:46 pmViva, Obamanista Peronista! Viva!
SPQR (72771e) — 6/2/2009 @ 2:49 pmI think right about now, Hugo is feeling neglected.
AD - RtR/OS! (f5973e) — 6/2/2009 @ 2:52 pm