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Politics : Formerly About Advanced Micro Devices

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To: TimF who wrote (482631)	5/21/2009 10:50:53 PM
From: tejek	Read Replies (1) of 1573960

The gov't didn't do it.....the BK judge did. No, the court decision hasn't come down yet. Its a done deal. The judge had made his decision two weeks ago and ruled tonite that he won't let the Indiana Teachers' Fund delay the sale: boston.com The funds turned down the gov't's offer. They made a big brouhaha about it and that forced Chrysler into BK. And once the bankruptcy proceedings started the government rammed through a big hit to the funds over their objection. You're lying. The judge came to his own conclusions. The judge is a strong judge with an impeccable reputation. He would scream bloody murder if the gov't pressured him to something. The government isn't pressuring him (at least I don't think it is). Its pressuring other creditors. Apparently, you don't understand what happened. The gov't pressured the funds prior to Chyrsler going into BK. The pressuring failed to convince the funds....they said they would prefer to take their chances in BK court. Now they are not happy with the court's decisions. Again, this is not a precedent setting event......so your concerns are unwarranted. Not precedent setting doesn't imply no serious cause for concern. Beyond that it is new that the federal government takes such an aggressive and activist stance, doing so much to push everything to favor junior creditors over senior creditors. What is wrong with you? The gov't was protecting the interests of American taxpayers and you're not happy? You would prefer the funds benefitted over the American taxpayer? That stinks. Given what I know about car companies and their ongoing profitability, investing in Chrysler was an incredibly stupid move by the Indiana Teachers' Retirement Fund. Probably. (Definitely if they didn't make it a small highly speculative position with a high nominal rate of return, either from directly lending at extremely high rates and with contractual assurance of seniority or by buying debt from other lenders at a very deep discount.) But making senior creditors in to junior creditors by government fiat, makes all lending to companies with politically connected stakeholders/junior creditors risky and even stupid, at least as long as Obama is in office. THE GOV'T DID NOT DO IT........THE BK JUDGE DID. If I was a major lender or investor, I'd avoid lending to unionized companies after this move by the government, unless I thought that I'd get a much higher return to cover the political risk. Fine. That's always the choice they have in front of them.

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