Miken

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

DonFurio

It is amazing that ANYONE would try and defend hedge fund traitors, excuse me, traders. The UAW is taking flak for be $15/hour too high compared to Toyota, Honda, etc. Auto CEO's are taking flak for making $10-15 million in decent years, and the fact that 5 hedge fund traitors made over $1 BILLION last year hardly gets any mention. Scandals, too many to mention plague Wall Street from Bernie Madoff to John Thain go on and on. But you're worried about the UAW getting more than their share??

I for one am sick and tired of the financial sector skating by with TRUE bailouts, with out any hope of repayment, while the auto industry constantly gets hammered. I'm sorry we don't live in Manhattan or are some of the beautiful people in CA that can't manage their own state. But you know what, I've been to both places and wouldn't live in either one if you paid me enough to make up for the absurd cost of living.

And by the way, I am not part of the UAW, never have been. In fact, for a career I fought them everyday. The only people I can't stand more than them are you suddenly self righteous financial people who, along with your friends Christopher Dodd and Barney Frank (both from eastern states I might add).

The "Dean" of investment advisors Art Cashin from UBS, predicted that there would be a severe pullback in the markets before Friday...didn't happen. How many people lost money on that charlatan's advice? Nobody in the entire investment community saw this coming with the exception of Peter Schiff. They are all a bunch of frauds. Anybody who listens to these people deserves to lose everything. And don't give me this stuff that Grandma's and Grandpa's have there life savings invested with the hedge funds. There are no rules in that game, so buyer beware.

So go on with your indignant rants about your rights being usurped, I'm not listening.

By the way, if you really are a Don, I would gladly kiss your ring instead of ending up with cement overshoes in the Long Island Sound.

On May 01 04:12 PM DonFurio wrote:

> Miken,
> If you do not believe in the rule of law and claims in bankruptcy,
> that's fine, but besides being one of the pillars of capitalism,
> just understand the consequences, higher credit costs for everyone
> and more restrictive covenants. Lenders will not take equity risks
> for debt returns, it's that simple. The US is still the largest
> economy by far, and if you weren't over-exposed in this cycle, you
> have an opportunity to do just fine the next 5-10 years. Remember
> if you have debt, it's not your money.
>
> I don’t doubt that the unions may have helped workers 40-50 years
> ago, but many companies and employees have long realized that it
> stifles innovation and why pay 10% of your paycheck to “union dues”.
> Yea, maybe you get a higher salary this year, but since the companies
> can’t fire anyone, it becomes much more difficult for anyone to try
> and get ahead because everything is based off of “seniority” or “for
> the good of union”. Think about it, it basically forces companies
> to overpay for people, if the employees were really worth what they
> think, then they should be able to move to the next firm that can
> hire them at that price. Of course the unskilled like it because
> it pays them more than they are worth, however it also causes all
> prices to rise, including cost of living for everyone.
>

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

DonFurio

"To me it is ridiculous that the UAW gets anything considering they were a major factor in the collapse (of GM)".

Let me rephrase your comment a little:

"To me it is ridiculous that the hedge funds get anything considering they were a major factor in the collapse of the U.S. economy"

What goes around, comes around.


On Apr 30 09:15 PM DonFurio wrote:

> This is horrific, the lenders who are secured, should be ahead of
> everyone. I hope they do well in court. To me it is ridiculous
> that the UAW gets anything considering they were a major factor in
> the collapse and when other heavily unionized companies went through
> CH 11 including just about every major airline besides AMR and CAL
> (they re-worked the bonds out of bankruptcy court), the employees
> who weren't retired, had to have their pension sent to Federal Pension
> Beneficiary where they will get a fraction of their previously unrealistic
> pension. Besides most of Chr’s cars are quite simply not very good,
> and if you were to live in anywhere besides the mid-west, you would
> have realized that people liked and drove around Toyota’s and other
> foreign cars, and steered away from the Big 3. For far too long these
> companies believed that they could do what they want and people would
> “buy American”, but people were smart enough to go for quality and
> also realize that many foreign owned cars are actually made in America.
>
>
> I have disagreed with this author on other articles, but I feel he
> did a nice job analyzing this situation and the article was well
> written.

Credit Default Swaps May Be Playing a Supporting Role in Chrysler Bankruptcy Filings

Wolverine:

The Detroit News is reporting that the following three entities did not come to Chrysler's party:

Oppenheimer Funds
Perella Weinburg Partners Xerion Capital Fund
Stairway Cap Management

Whatever you think of their actions, they will face some 'image' issues in the days to come.

www.detnews.com/articl...


On Apr 30 03:34 PM wolverine27 wrote:

> i would love to see the list of hedge funds who voted against this
> deal . some stated they were getting 33 cents and that they could
> get more in courts ......i want those results published.
> poetic justice is if they get less from the courts.
> i still cant believe there are people on this board supporting hedge
> fund billionares......these guys are the problem not the solution.
>
> they use favorable tax codes to skirt taxes which we pick up , so
> when gwynn cries about a sitting president ....please lets not shed
> a tear for this idealogical phony.

GM's Tough Treatment Should Be a Model for Other Bailouts

Treatment of the auto companies vs the banks and Wall Street will never be the same for two reasons:

1. The auto companies are not part of the east coast elitists. They are primarily a mid west concern. If there's any doubt about that, simply look at the market share of the Detroit 3 on the east coast. Even in the face of irrefutable data on quality, market share has not grown. It's simply not cool to drive a domestic car. For proof of that, I can provide a link that shows what the Auto Task Force members are driving for their personal cars.

2. You have to follow the money. I can also provide a link showing how much money the financial services industry has given to congressmen, senators, and Presidents.

So, to expect that there will be similar treatment is not likely.

How Bailouts Are Messing with Capitalism

As I am writing this, apparently the Obama administration has decided that the CEO of GM should be terminated. I agree that someone should be terminated, however, their zip code should be between 20001-20599. Please see reasons 1,2,3 below.

Actually, I thought that was the job of the BOD and shareholders.

If this makes them feel better, so be it.

Who is John Galt?


On Mar 29 09:49 AM Miken wrote:

> With regard to the auto companies, I believe that everyone is overlooking
> the fundamental issues. I don't think there is any doubt that the
> current Wall Street fiasco has damaged the ability of the American
> based, and even foreign based companies to survive. But even before
> the Wall Street mismanagement, the American companies were in a state
> of decline. The central question should be why the American companies?
>
>
> I don't think the simplistic answer is management or unions. I believe
> the simple answer is a view of the people running the country, and
> those on both coasts that a healthy manufacturing sector is passe
> and not important. The reasons I have drawn that conclusion are
> the following:
>
> 1. There is no articulated industrial policy. What do we think a
> manufacturing base should look like? What are the policies that
> should shape our industrial policy? Have we developed the infra
> structure to support our vision? There apparently is no appetite
> in Washington, or anywhere else in the country to have a dialogue
> on this.
>
> There certainly is in countries that are emerging as the new manufacturing
> base in the world order. In countries such as China, Mexico, South
> Korea, Japan, Thailand, etc. there is a very clear priority given
> to the manufacturing sector because they recognize the economic value
> stream connected with making things.
>
> 2. More fundamentally, is a manufacturing base important? Or should
> the country try to exist on retailers, services, and shuffling other
> people's money around (Wall Street)? I don't think so. See the
> value stream discussion in item 1.
>
> 3. What is our energy policy? The beginning of the current crisis
> for the American based auto companies was the sudden spike in gasoline
> prices because we have continued to let ourselves vulnerable to foreign
> despots and royal families whims to control energy prices. At $1.50
> per gallon, customer preferences are significantly different than
> at $4.50 per gallon. Were the American companies asleep at the wheel,
> or were they better at building larger cars and trucks than the foreign
> companies? Were they callous or were they giving the customers what
> they wanted? The evidence suggests the latter. Toyota, Honda, Nissan,
> BMW etc. all where trying desperately to break into the truck market
> without much success.
>
> When our foreign dependence allowed a drastic change in energy costs,
> not only were the American companies caught off guard, but others,
> especially Toyota was closing plants delaying start ups, etc.
>
> I don't care if prices are high or low, the auto companies can exist
> in either scenario. When Washington decides to address this, it
> will help them develop better strategies. After all, most of the
> American companies have world wide operations that were doing just
> fine making small economical cars using a variety of fuels from CNG
> to ethanol.
>
> Too long for a post, sorry, but I don't buy the simplistic answers
> to the question, "what's wrong with Ameican companies?".

How Bailouts Are Messing with Capitalism

With regard to the auto companies, I believe that everyone is overlooking the fundamental issues. I don't think there is any doubt that the current Wall Street fiasco has damaged the ability of the American based, and even foreign based companies to survive. But even before the Wall Street mismanagement, the American companies were in a state of decline. The central question should be why the American companies?

I don't think the simplistic answer is management or unions. I believe the simple answer is a view of the people running the country, and those on both coasts that a healthy manufacturing sector is passe and not important. The reasons I have drawn that conclusion are the following:

1. There is no articulated industrial policy. What do we think a manufacturing base should look like? What are the policies that should shape our industrial policy? Have we developed the infra structure to support our vision? There apparently is no appetite in Washington, or anywhere else in the country to have a dialogue on this.

There certainly is in countries that are emerging as the new manufacturing base in the world order. In countries such as China, Mexico, South Korea, Japan, Thailand, etc. there is a very clear priority given to the manufacturing sector because they recognize the economic value stream connected with making things.

2. More fundamentally, is a manufacturing base important? Or should the country try to exist on retailers, services, and shuffling other people's money around (Wall Street)? I don't think so. See the value stream discussion in item 1.

3. What is our energy policy? The beginning of the current crisis for the American based auto companies was the sudden spike in gasoline prices because we have continued to let ourselves vulnerable to foreign despots and royal families whims to control energy prices. At $1.50 per gallon, customer preferences are significantly different than at $4.50 per gallon. Were the American companies asleep at the wheel, or were they better at building larger cars and trucks than the foreign companies? Were they callous or were they giving the customers what they wanted? The evidence suggests the latter. Toyota, Honda, Nissan, BMW etc. all where trying desperately to break into the truck market without much success.

When our foreign dependence allowed a drastic change in energy costs, not only were the American companies caught off guard, but others, especially Toyota was closing plants delaying start ups, etc.

I don't care if prices are high or low, the auto companies can exist in either scenario. When Washington decides to address this, it will help them develop better strategies. After all, most of the American companies have world wide operations that were doing just fine making small economical cars using a variety of fuels from CNG to ethanol.

Too long for a post, sorry, but I don't buy the simplistic answers to the question, "what's wrong with Ameican companies?".

New Candidates for the Dow Jones Average

This writer is typical of the American government and Americans in general. Today the DJIA has very little representation from the manufacturing sector. I don't care if it's GM, I doubt that they care either. The author has not recommended one manufacturing company to replace GM. It's as if the country has only banks, entertainment, and software companies.

But the DJIA is supposed to a representation of the economic health of the markets, the manufacturing sector is quickly disappearing and the suggestion is that we ignore it completely in the Dow. If we can't see the problem, maybe it doesn't exist. Show me a country without a strong manufacturing sector, and I'll show you a third rate country.

Why Capping Pay Is Likely to Work

It occurs to me that the biggest losers are skating scott free here. Sure GM is $50 billion in debt and needed a loan. But that's only because they don't have the ability to print more money.

How about the organization that is $11TRILLION in debt? Why don't we take away their executive air fleet? Why don't we limit their compensation and benefit package? After all, they have received a bailout from the taxpayers already. Are we thinking that the government will cease to attract the highly qualified people that are there now...don't make me laugh. The organization that has demonstrated a total lack of fiscal skill is making rules for everybody else.

Am I the only one that finds that odd?