Chrysler

Chrysler has filed for bankruptcy and will emerge with the UAW owning 55% of it. I have a feeling in my gut that this may not be the best way to ensure long-term market viability for this company.

I'll ask again, why couldn't they simply be allowed to enter normal Chapter 11 like every other business unable to sustain itself? Why are the US and Canadian governments going to own 10% when all's said and done?

Obama took the occasion to blast hedge funds that had invested money in Chrysler. I'm utterly sick and tired of this president trying to intimidate private business. These are Chicago thug tactics and are completely unacceptable in this country. I really don't know who the hell this guy thinks he is, but I've had enough of this heavy-handed Mafia-wannabe crap.

I encourage you to read the article above and the hedge funds' response statement for more details, but here's a quick overview.

These hedge funds represent many of the country's teacher union retirement plans and school endowments, which invested in secure loans to Chrysler through the funds. The way that repayment is supposed to work during a liquidation or bankruptcy is that senior secured creditors, such as the funds, are repaid in full before junior creditors, common stock holders, and so forth can try to recoup their investments. These funds, which have a fiduciary duty to their clients to look out for the best interests of the clients, offered to accept $.60 on the dollar. They were instead offered $.33 on the dollar, even though other groups lower on the legal priority chain (ahem, UAW?) were being given recoveries of up to 50%.

It was their proper duty as representatives for the clients listed above to turn this down and fight for more in court. Bottom line, these companies walked away from a piece of crap deal and for Obama to pull these mob tactics by trying to bully private businesses in front of the cameras and incite a public backlash is a disgrace to him and the office he holds.