Your posts lack a basic understanding of financial management, fiduciary responsibilities, and free market capitalism. It's astonishing really.
I see two discussions in this topic. One, Chrysler's debt restructuring and two, wasteful government investment in the company. The latter is germane to Chrysler being a profitable entity. If they cant accomplish that goal no more public money should be invested FIAT was garbage. Basically a tin can with 2 squirrels in a cage for a motor. I have no idea what they plan on producing in the US but it better be equivalent to Toyota, Honda, etc. Historically Italian cars have been the epitome of polarization. Great high end cars like Alfa Romeo and Ferrari but their low end has been cheap crap. Im the last one that wants to see Chrysler fail. I drive the top of the line 2008 Jeep Grand Cherokee. I dont want my car to be worthless less than a year after I bought it.
This says nothing. Explain it all to me. What do you disagree with, and why do you disagree with it? I have already put my thoughts out there. If you've read my posts here the last few years, I've demonstrated a good understanding of the markets. I'll let it stand at that.
Where do I begin? Ah, here's a good spot. Dear God no!!! Someone is trying to maximize their gain? How dare they? Of course they're trying to maximize their gain. Ever heard of fiduciary duty? Legally, they have to do everything they can to maximize the gains of their investors. They're in the business of making money. They took a risk, now they expect to get paid. Gasp! This is the lack of understanding of fiduciary responsibility I was referring to. I don't see the problem. They are doing what they have to do to maximize their gain. It's not a debtholder's responsibility to secure the continued viability of a company which has demonstrated itself to be unviable. How is the Hedge fund to fault for trying to get the money that is owed to them, by any means possible. If they can get an extra penny by liquidating the company, they should press to do it. In fact, they already offered to make serious concessions to keep Chrysler going. 40% write down on senior debt. yet they're villified by those who drink the kool aid. And here is the fundamental problem and my reference to your lack of understanding free market capitalism. If Chrysler cannot pay its debtors and is not viable without government intervention, it should be allowed to fail. The idea that senior debtholders are shaking down the taxpayers of America is completely misplaced. The white house bailing out an insolvent unviable company is the shake down. And you're damn right they're negotiating with the government who has overstepped it's bounds and gotten into the middle of this. It goes back to their fiduciary duties to investors. It's not up to the hedge funds to keep Chrysler going. Why should the hedge fund work to save the UAW's jobs? Here's an idea, the UAW could work to save its own jobs by lowering their demands. Ah, but they got the president elected, he can't foresake them now. I agree with this except for the point that the merger will definitely go through. I don't know that to be true. However, watching the UAW have no one to blame would be worth the price of admission. not familiar with this but could have a repeat. I find it hilarious that you are bragging about doing the exact same thing as the "scum sucking hedge fund managers". You don't feel like other debtors who lost money should get some of the money you made through a wise buy? Of course not, but you expect the hedge funds to do that. Not sure what this means. I like following the money though. Now we get to the lack of understanding financial management. Are you familiar with LASERS? Would you agree they represent mom and pop? After all they control the retirement investments for state workers in LA. I assume you would answer yes to both of these questions. Well, they invest in hedge funds and in high yield fixed income. So yes, mom and pop are very much involved in this. What you are asking is for Mom and Pop to take a hit to their 401k so the Unions can continue to pay their employees tremendous legacy costs. Why don't we just skip the middle man and transfer the money directly from Louisiana Teacher's retirement accounts directly to the UAW. We could probably save on transaction fees.:thumb: Totally irrelevant and once again beating on the hedge fund managers for getting a discount on the bonds and making money when you admit to doing the exact same thing. Think back to your situation, do you remember why you bought those bonds so cheap? If not, i can tell you. You bought them cheap because you were taking on an enormous amount of risk. Same as the hedge funds. High risk, high reward. And as you pointed out, you don't even know if these hedge funds are making money or losing their butts on this. I agree totally, unfortunately, they have already overstepped and BO is trying to placate the UAW at the cost of normal bankruptcy processes. Totally irrelevant and exhibits more of the lack of understanding of free market capitalism. You don't cap gains on investments because others lost money on those investments. Newsflash, every time you make money on a stock, someone loses. It's part of the game. no need to reconcile at the end to make everyone happy. Alright, so probably not much more out of me today. I was up til 2AM playing poker and my caffeine crash is coming soon.
I am going to stand corrected on the mom & pop hedge fund investing. I quit serious market investments years ago and went another route (real estate, which is another story) however, hedge funds back then were normally for ultra rich individuals and companies. After discussing hedge funds with a good friend who is in the banking business he informed me that beginning in the late 90's many pension funds started to invest in hedge funds. So yes, it would seem at least some retirement accounts are at risk with Chrysler. The exact amount we do not know but its likely a substantial number.
I've read it elsewhere but in the article quoted by DRC in post #11 of this thread is the following: also, this article from WSJ Chrysler Creditors Plan Counteroffer - WSJ.com in part: There is a dispute as to the value of the junior creditors deal but it lies somewhere between $.29 and $.50 depending on who you listen to. Either way the $.14 first offer is less than both and the $.32 second offer is just slightly above the low range of the junior creditor deal.
That is one OUTSTANDING commentary and articulates Tirks point perfectly. If this behavior by the government, and the White House in particular, isnt disturbing enough then I dont know what is. If you keep drinking the Obama kool aid its going to turn to pi$$ soon enough. Wake up people and recognize this as a power move of historical proportions. Capitalism Be Damned should be this administrations new battle cry.
