Saturday, May 02, 2009
Self-hating Wall Streeters
Hedge funds are irritated because -- surprise, surprise -- Barack Obama is picking on them.
Hedge funds and investment managers were irate at Obama’s description of them as “speculators” who were “refusing to sacrifice like everyone else” and who wanted “to hold out for the prospect of an unjustified taxpayer-funded bailout.”
“Some of the characterizations that were used … to refer to us as speculators or to say we’re looking for a bailout is really unfair,” said one executive who spoke on condition of anonymity because of the sensitivity of the matter. “What we’re looking for is a reasonable payout on the value of the debt … more in line with what unions and Fiat were getting.”
Of course, Wall Streeters were famously generous to the Democrats, including the Obama campaign, so they are undoubtedly feeling betrayed. The question is whether, having been demonized, they will close up their wallets, or will they react like a victim of abuse and pour even more money into Democrat coffers to protect themselves from even worse treatment?
I hope that Wall Streeters get some self-respect and realize that the Democrats, unfettered by serious Republican opposition, are going to ask for their boots to be licked for years to come. And, anyway, there are few things more irritating than a self-hating financier.
11 Comments:
By 
, at
Sat May 02, 10:26:00 AM:
"No unicorns or rainbows for Wall Street" -- B.O.
It is cool to be liberal until it starts to hurt you personally.
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By , at
Sat May 02, 10:44:00 AM:
I'm seeing stuff that suggests that Obama & Co may want to jam the hedge fund creditors by using a section 363 sale of the good Chrysler assets -- this would be subject to a vote ... but the vote would include Chrysler's bank creditors -- guess what ... 70% of the debt is held by a handful of TARP recipients currently being stress tested.
I don't know Ken Lewis but have a strong sense that he's a prick -- he grew up as Hugh McColl's hatchet man, so how could he not be.
But you ain't seen nothing until you've seen a bloodless self-righteous DC bureacrat on the warpath. They don't feel bound by law ... to them it's just a bludgeon.
So now imagine what's going on between Obama's jug ears.
He's Keyser Soze -- he wants us to underestimate him.
Link, over
By Escort81, at
Sat May 02, 11:41:00 AM:
Link - what are the "good Chrysler assets" -- real estate?
What happens in a sec. 363 sale if there are cross-collaterlization agreements?
Asking the above out of ignorance, but remember that after Daimler split the scene, Chrysler was eventually taken private, so I assume everything and the kitchen sink was pledged as collateral.
By , at
Sat May 02, 01:12:00 PM:
Link:
The Chrysler - Fiat deal is relying on Section 363, perhaps in novel ways. Sayeth Obama: "To execute this agreement, Chrysler will use Section 363 of the bankruptcy code to clear away the remaining impediments to its successful re-launch."
I've heard of "363 deals" done as follows: An initial "stalking horse" bidder negotiates an asset purchase deal for a business segment -- and gets a break-up fee and expense reimbursement. Others can then come in and make competing offers. Importantly, the winning bid gets the business segment free and clear. The business segment can be pretty big -- I'm not sure if it can be the whole company -- in practice I've heard of it being used for divisions and brand name products -- I think "Vlasic pickles" got sold this way. Idea is that selling a viable line of business as a whole can maximize value for the bankruptcy estate. I don't know if secured creditors get a preference on the proceeds, or who has to vote on what when, etc -- but ... as far as I know ... cross-collateralization and security interests don't factor in the process -- bankruptcy can be rough justice.
The Chrysler deal may not have some of the features that usually make a 363 deal equitable. Can you can get a fair auction in these circumstances? Is there a necessary vote of creditors? ... has the vote been pre-packaged by strong-arming the TARP bank lenders?
By , at
Sat May 02, 03:32:00 PM:
The large banks and financial institutions now have a "partner", the government, whether they like it or not.
In a bankruptcy involving claims by the large, the unions, and the small who is going to be get the best deal when the government is backing the unions and the large?
The Chrysler case will be decided under existing bankruptcy law. Law which does not totally ensure the outcome will please the government.
But that won't matter.
The government can then just change the law. And if by some amazing chance Congress will not comply then O will employ goons rather than lawyers next time.
K
By Mark in Texas, at
Sat May 02, 03:33:00 PM:
I understand that part of the Chrysler - Fiat deal includes plans for Chrysler to make a copy of the Fiat 124. It will be called the Lada.
By , at
Sat May 02, 05:28:00 PM:
You reap what you sow or if you lie down with the you are going to be Fracked, I know they were used to making big bucks in return for supporting the Dhimmi's but now they are not needed you see the govmint owns them now so the can bleed them dry of bribes uh I mean campaign contributions with out giving anything back.
By , at
Sat May 02, 09:20:00 PM:
Link again. More on Section 363 sales.
This is a good initial analysis: http://www.bankruptcylitigationblog.com/archives/bankruptcy-in-the-news-chrysler-files-bankruptcy-part-ii-testing-the-limits-of-section-363-sales.html
Charitably put, Obama & Co are testing the limits of Section 363. It's not supposed to be used as an end-run around the requirements for a reorganization plan of the entire company -- a "sub rosa" or "de facto" plan -- but instead can be used for quick sales of business segments, subject to a market check on the selling price.
"You don't have to be a bankruptcy maven to see from the face of the [Obama] term sheet that the proposed sale dictates the provisions of a future plan of reorganization and sure has the feel of a "sub rosa" or "de facto" plan ..."
Could be a court battle ... Developing.
By , at
Sun May 03, 12:02:00 AM:
refusing to sacrifice like everyone elseI have the impression that if the law was followed after the senior creditors (the holdouts) received what is due there would be little if any left for the rest.
Yet somehow the UAW receiving 50+% of Chrysler instead the crumbs leftover is called a sacrifice.
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