Get to know a "speculator" (UPDATED)

(UPDATE #1):

The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor, sources familiar with the discussions said.

Oh goody. We wonder which group of creditors is going to get the shaft this time around. And then there is this from a separate article on the same subject:

GM would aim to win bankruptcy court approval by July 1 for a plan to separate its good brands and assets into a viable company, which could then emerge from bankruptcy on a rolling basis. Officials have been cheered by the speed of Chrysler’s bankruptcy process, but hopes that GM can follow a rapid path through court are being dimmed by a building backlash from lawmakers. Some are claiming that creditors’ rights are being given short shrift while others complain about job cuts and the closure of dealerships.

Short shrift..? Who cares? That Officials are cheered should be the only thing that matters.

(here endeth the update)



Sorry, we’re not letting this one go. It’s going to continue to stick in our craw for a while.

Recall how the Chrysler bankruptcy cram down dissident bondholders were openly ridiculed by the President as being merely “speculators” who were standing in the way of progress by not stepping aside for the unions. So, just who were these speculators? Greedy Wall St. types? Nope. It turns out that many of these first-in-line secured investors that were forced to take 29 cents on the dollar were teachers and other public servants.

Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government," reports Mr. Mourdock

There was a time when being a secured investor meant you got taken care of ahead of everyone else. Ancient history, we suppose.