"W.H. discusses possible bankruptcy" - WH is focused on the Bondholders taking a haircut.

[Pirate Smile]

Aides to President Obama say a bankruptcy filing for GM or Chrysler may be the only way for the firms to force stray bondholders to agree to a deal, often called a cramdown, that could see them receive only a fraction of the face value of the original debt.

In a conference call with reporters Monday, a senior official said the bankruptcy procedure would be used to enforce an agreement, even if not all bond or debt holders can be persuaded to reduce their demands. The aide called it a way to avoid the company being blackmailed by a few creditors.

Speaking on condition of anonymity, the official acknowledged that if a bankruptcy filing takes place, the administration will give up control of the process to a judge who has to approve all of the company's expenses and is the only one who can void existing debt or contracts.

However, Obama aides said they expected the court would defer to and quickly approve any bankruptcy plan that comes in with the White House’s backing, something quite unusual for bankruptcy court.

http://www.politico.com/politico44/perm/0309/no_gm_stick_up_f56a0831-87f0-4838-89d4-40afc4b95287.html

The White House seems focused on the bondholders!

[depakid]

1. Bondholders to the Obama administration:

We double dog dare you....

[JayMusgrove]

2. Any one who holds a GM or Chrysler bond...make sure

you diversify your investments by tomorrow.

Think 20 cents on the dollar.

[we can do it]

9. We're There Anyway-

[quiller4]

12. 20 cents on the dollar is optimistic. If it actually goes to

court the "cram down" would more likely be 8 to 10 cents on the dollar.

[Pirate Smile]

3. I've read for the past couple of months that the Bondholders were playing chicken with the Obama

Administration - the question was - who would blink first. Obama didn't blink. It's the Bondholders move now. Tic toc.

[Kdillard]

4. They are really playing games with the wrong man.

[Pirate Smile]

6. It drives me crazy to see people around here saying Obama is trying to bust the Union. The Unions

have already given a ton and want the same done by the other parties - like the bondholders. The White House wasn't talking about the unions in that conference call. They were focused on how Bankruptcy may be necessary to do a cramdown on the Bondholders.

[enough]

5. Mish Shedlock believes this also at work in the Obama-Geithner approach to financial corporations.

http://globaleconomicanalysis.blogspot.com/2009/03/geithners-plan-can-succeed.html

snip>

Make no mistake - we are selling off our future and the future of our children to prevent the bondholders of U.S. financial corporations from taking losses. We are using public funds to protect the bondholders of some of the most mismanaged companies in the history of capitalism, instead of allowing them to take losses that should have been their own. All our policy makers have done to date has been to squander public funds to protect the full interests of corporate bondholders. Even Bear Stearns' bondholders can expect to get 100% of their money back, thanks to the generosity of Bernanke, Geithner and other bureaucrats eager to hand out the money of ordinary Americans.

snip>

much more

[Pirate Smile]

7. Obama is trying to force the bondholders to take a loss. He isn't trying to prevent it here.

GM can't be viable without getting rid of some of the debt.

[slipslidingaway]

16. Kick! n/t

[Pirate Smile]

8. kick

[MasonJar]

10. Why not ditto for the Wall Street/banks? I am not ready to give my hard-

earned money to those millionaires and their disastrous policies.

[FrenchieCat]

13. What do you think was done with AIG?

They replaced management early is all.

We own 80% of it....and are waiting for regulation to make it complete.

[girl gone mad]

19. Management was not replaced at AIG.

Hank Greenberg was forced out, but that was about all. The rest of the management team was left in place, along with the board.

If anything, forcing Greenberg out early hurt efforts to unwind the derivatives and move forward. Martin Sullivan was not an effective manager from the start and he essentially allowed AIG employees to systemically loot the company through the use of "retention" bonuses and other schemes.

The AIG bailout was NOT handled well, and as others have noted, bondholders have not been required to take so much as a $.01 haircut.

[amandabeech]

22. Nor have bondholders at Citibank and BOA been forced to give up a penney.

I don't see any excuse for bond holders at the financial institutions to get one more cent of my tax dollars until everyone involved in those institutions takes as much a hit at people at GM.

You know that white collar workers have given up money and benefits at GM, too, in most instances.

What's wrong with give-ups on Wall Street?

[Jennicut]

11. So he is not a complete corporate George Bush part 2 union buster?

Its kind of obvious that he is trying to save GM, not total it.

[Pirate Smile]

14. I know.

I can't believe some of the crap I read here now.

[SpartanDem]

15. Of course

the thread that proves this very point sinks to bottom.

[Kool Kitty]

17. Kick.

:kick:

[avaistheone1]

18. My understanding from listening to the various pundits is that if the auto manufacturers go bankrupt

the workers' loses their pensions. That would be terrible.

[geek tragedy]

20. I thought that Obama was the enemy of the American worker.

And a tool of corporate interests!

I read it at DU!

[HopeOverFear]

21. Ha!

[high density]

25. Didn't you hear that Obama = Bush?

Where have you been??

[adamuu]

26. Visitors from FR are getting tiring. n/t

[ellie]

23. Kick

[Pirate Smile]

24. Brian Fredline, UAW Local 602, on MSNBC just said that if a strategic and surgical

bankruptcy is necessary to force the bondholders then so be it. He said the union has made concessions that haven't even been announced yet.