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Politics : American Presidential Politics and foreign affairs
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To: DuckTapeSunroof who wrote (35407)5/6/2009 5:01:00 PM
From: TimF  Read Replies (1) of 71588
 
The goal is to shed debt and craft a lean, mean, survivable business.

And the favoritism given to the unions gets in the way of that goal as well as the idea of senior debt being paid first.

(Speculators are not exactly at the head of the table

They generally are and they should be if they own senior debt. This isn't just a matter of principle its also a very practical idea.

Going after the secondary market effects the future for the primary market. If you disfavor speculators who buy the debt at depressed prices, you harm the secondary market in debt, making it riskier for future primary market creditors, this will push up interest rates in the future, at least when you have other stakeholders or creditors who are likely to be favored if things go wrong.

A reasonably likely outcome is that corporations with large political influential unions will face higher borrowing costs in the future. Its possible that to a lesser extent borrowing costs in general will be higher in the future.
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