{"id":14825,"date":"2009-05-05T14:05:03","date_gmt":"2009-05-05T20:05:03","guid":{"rendered":"http:\/\/proteinwisdom.com\/?p=14825"},"modified":"2009-05-05T14:05:03","modified_gmt":"2009-05-05T20:05:03","slug":"new-allegations-of-white-house-threats-over-chrysler","status":"publish","type":"post","link":"https:\/\/proteinwisdom.com\/?p=14825","title":{"rendered":"“New Allegations Of White House Threats Over Chrysler” [updated, then updated twice more]"},"content":{"rendered":"

From Business Insider<\/a>:<\/p>\n

Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats.<\/p>\n

Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said.<\/p>\n

Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.<\/p><\/blockquote>\n

Calm, sober centrism. Not fascism. No. Mustn’t stoop to the level of our political opponents and call fascism fascism. Otherwise we’re no better than they were when they were calling everything decidedly NOT fascism fascism.<\/p>\n

Oh. And while we’re at it, stop making the claim that the left is forcing us to cede control of language. Such a claim is perfectly outrageous!<\/p>\n

Ahem.<\/p>\n

The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking “end justifies the means” group they have ever encountered. Another characterized Obama was “the most dangerous smooth talker on the planet- and I knew Kissinger.” Both were voters for Obama in the last election.<\/p><\/blockquote>\n

And? Hey, fellas. He won.<\/em> Ends justifying the means is part and parcel of the leftism you voted for. Perhaps you didn’t care when that mindset was only marshaled in the service of getting elected, but how could you not see that it would spill over into every other thing the man plans to do, from reorganizing the control over car companies in favor of labor, to signaling that he will nominate judges, under the rubric of pragmatism<\/i>, that will follow the same intellectual path? <\/p>\n

One participant in negotiations said that the administration’s tactic was to present what one described as a “madman theory of the presidency” in which the President is someone to be feared because he was willing to do anything to get his way. The person said this threat was taken very seriously by his firm.<\/p>\n

The White House has denied the allegation that it threatened Perella Weinberg.<\/p>\n

Last week Obama singled out the firms that continue to oppose his plan for Chrysler, saying he would not stand with them. Perella Weinberg says it was convinced to support the plan by this stark drawing of a line between firms that have the president’s backing and those that did not. They didn’t want to be on the wrong side of Obama. Privately, administration officials have expressed confidence that other firms will switch sides for this reason.<\/p>\n

These allegations add to the picture of an administration willing to use intimidation to win over support for its Chrysler plans–and then categorically deny it.<\/p><\/blockquote>\n

— Which, that’s hardly a bad strategy when you can count on an obsequious press not only to guard your flank, but to act as your forward attack dogs, as well.<\/p>\n

Thank god for the free press protecting us from the powerful, is all I have to say.<\/p>\n

Really. Relax, folks. Olbermann’s got your backs.<\/p>\n

(h\/t bh)<\/p>\n

****
\nupdate<\/i><\/b>: More corroboration here<\/a>? Possibly. Here’s <\/a>the follow-up post.<\/p>\n

(thanks to urthshu)<\/p>\n

****
\nupdate 2<\/i><\/b>: Gauntlet<\/em>:<\/a><\/p>\n

Here’s a shock. When hedge funds, pension funds, mutual funds, and individuals, including very sweet grandmothers, lend their money they expect to get it back. However, they know, or should know, they take the risk of not being paid back. But if such a bad event happens it usually does not result in a complete loss. A firm in bankruptcy still has assets. It\u00e2\u20ac\u2122s not always a pretty process. Bankruptcy court is about figuring out how to most fairly divvy up the remaining assets based on who is owed what and whose contracts come first. The process already has built-in partial protections for employees and pensions, and can set lenders’ contracts aside in order to help the company survive, all of which are the rules of the game lenders know before they lend. But, without this recovery process nobody would lend to risky borrowers. Essentially, lenders accept less than shareholders (means bonds return less than stocks) in good times only because they get more than shareholders in bad times.<\/p>\n

The above is how it works in America, or how it\u00e2\u20ac\u2122s supposed to work. The President and his team sought to avoid having Chrysler go through this process, proposing their own plan for re-organizing the company and partially paying off Chrysler\u00e2\u20ac\u2122s creditors. Some bond holders thought this plan unfair. Specifically, they thought it unfairly favored the United Auto Workers, and unfairly paid bondholders less than they would get in bankruptcy court. So, they said no to the plan and decided, as is their right, to take their chances in the bankruptcy process. But, as his quotes above show, the President thought they were being unpatriotic or worse.<\/p>\n

Let\u00e2\u20ac\u2122s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients\u00e2\u20ac\u2122 money to share in the \u00e2\u20ac\u0153sacrifice\u00e2\u20ac\u009d, they are stealing. Clients of hedge funds include, among others, pension funds of all kinds of workers, unionized and not. The managers have a fiduciary obligation to look after their clients\u00e2\u20ac\u2122 money as best they can, not to support the President, nor to oppose him, nor otherwise advance their personal political views. That\u00e2\u20ac\u2122s how the system works. If you hired an investment professional and he could preserve more of your money in a financial disaster, but instead he decided to spend it on the UAW so you could \u00e2\u20ac\u0153share in the sacrifice\u00e2\u20ac\u009d, you would not be happy.<\/p><\/blockquote>\n

I’m wondering how long before the mainstream press finally feels pressured enough to cover any of this.<\/p>\n

The mustard is off the hotdog!<\/p>\n

(h\/t Pablo)<\/p>\n

****
\nupdate 3<\/b><\/i>: More<\/a>, from the New Ledger:<\/p>\n

Imagine telling your bank that you\u00e2\u20ac\u2122ve decided to pay off your mortgage in full, but you\u00e2\u20ac\u2122re only going to give them 35 cents on the dollar, take it or leave it. Then when they protest, you lose patience, walk out of the room, and go on national television to say that your bank is a bad actor, they\u00e2\u20ac\u2122ve exhausted your patience, and now they\u00e2\u20ac\u2122ll have to settle for a big fat zero. And by the way, maybe the White House press corps will start spreading nasty rumors about them.<\/p>\n

That analogy in no way exaggerates the situation that Chrysler\u00e2\u20ac\u2122s debtholders find themselves in. It\u00e2\u20ac\u2122s very, very hard to escape the conclusion that the President of the United States has decided to declare war on a group of people who have lent their own money in pursuit of an honest return, and are guilty of nothing more looking out for their own interests.<\/p>\n

As it seldom has before, the US government under Barack Obama is directly superseding private contracts, ex post facto. They can change the rules on anyone, anytime, for reasons they only have to explain through a cowed and uninquisitive press.<\/p>\n

The next time you have money to invest, give that some very careful thought.<\/p><\/blockquote>\n

Well, Obama did say he was going to make you work.<\/p>\n

What he didn’t say is that he was going to make you work for him<\/em>, and for free<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":"

From Business Insider: Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats. Conversations with administration officials left them expecting that they would be politically targeted, two participants in the negotiations said. Although the focus has so been on allegations that the White House threatened Perella Weinberg, sources familiar with the<\/p>\n

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