Posted by: rotenochsen | April 28, 2009


Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” —Ronald Reagan

The blatant lie hat Mr. Gibbs told to the press corp recently is an example of the duplicity and double talking that is coming out of the “Chicago Style” White House daily.He said this:”We strongly back an auto industry that we believe can and should be self-reliant. It is not our desire to either own or run one of the auto companies.”

Well, the President just joined forces with the UAW union to take over the Chrysler Corporation. And in doing so committed a crime of drastic proportions in that they reduce the Bond holders share of the company that they owned last month, to a ten percent share!

Under the agreement, the four banks will forgo claims to their portion of Chrysler’s $6.9 billion debt in exchange for $2 billion in cash when the deal closes.

The Treasury needs to persuade all 46 banks and hedge funds that hold Chrysler debt to go along. If not, a bankruptcy filing could still be possible for the nation’s third largest automaker.

If the remaining debt holders agree to the deal, that leaves a partnership with Italian automaker Fiat Group SpA as the lone remaining hurdle to Chrysler meeting a government-imposed deadline Thursday to complete a number of major restructuring steps and become eligible for further government aid.

The UAW reached a deal over the weekend that would give it a 55 percent stake in the company and assurances over issues like health care. At no cost to the union I should remind all who bother to read this post! While the Bond holders get the shaft!

Chrysler has been living off $4 billion in government funds since the start of the year and would likely need more to avoid bankruptcy.

The people familiar with the matter said a “surgical” bankruptcy is still possible if all of Chrysler creditors don’t go along with the deal, but that it was not the preferred option for resolving Chrysler’s problems. Has any one bothered to ask individual bond holders who they want running the company? I am sure they would not say the union or the President, who has not even run a candy store!

The debt holders and the Treasury Department have been trading proposals in the past several weeks but had remained far apart on how much the creditors would recoup in a Chrysler restructuring. Debt holders last week offered to reduce their debt to $3.75 billion in exchange for a 40 percent stake in the company. Treasury has offered much less generous terms. What the government is offering is a Chance to take part in the first, but certainly not the last step, in Obama’s change of the free Enterprise system to that of a socialized economy run by a non-responsive government.
The people close to this deal, said the government told the debt holders that they could lose everything if no deal was reached.

This is a blatant falsehood! A bankruptcy court would certainly not give the union controlling interest in Chrysler. It would certainly nullify the union contracts and make the union slash their benefits package for themselves and the retirees.That is reality as the world of economics knows it. Not the fairy tale system that Obama has used very effectively to slip the USA into the beginnings of a socialist system, and pay back a debt to one of the group’s that helped him get elected, The UAW.

First Obama went around the world apologizing for America being a “bad” country under the Bush administration. Then he went to South America, and not only did he listen for 50 minutes silently while Hugo Chavez lambasted the USA, he then accepted a book damning America from Chavez that any patriot would have thrown in the trash. Now he is in the process of trashing the free enterprise syestem in the name of “CHANGE AND HOPE” that violates every principle of the Constitution and Bill of Rights that he is sworn to defend and protect!


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