Posted on 06/09/2009 4:28:47 PM PDT by Para-Ord.45
Edited on 06/09/2009 4:38:36 PM PDT by Admin Moderator. [history]
High court won't block Chrysler sale
WASHINGTON (AP) - The Supreme Court has cleared the way for Chrysler's sale to Fiat, turning down a last-ditch bid by opponents of the deal.
The court said late Tuesday it had rejected a plea to block the sale of most of Chrysler's assets to the Italian automaker. Chrysler, Fiat and the Obama administration had warned that the high court's intervention could have scuttled the sale.
A federal appeals court in New York had earlier approved the sale, but gave opponents until Monday afternoon to try to get the Supreme Court to intervene.
Justice Ruth Bader Ginsburg ordered a temporary delay just before a 4 p.m. deadline on Monday.
Excerpt.
It’s not the key part of anything. As he said, it is a moot point because the sale will be done after tomorrow. The SCOTUS voted ‘present’ on this and in doing so threw the rule of law under the bus. Whether it was on the merits or not is meaningless.
I got you now, thanks. My other question is why people are talking about a massive US bonds sell off tomorrow?
Think of them as mortgages. You buy a bond for a fixed price. Businesses guarantee an annual, or semi annual, payment during the life of the bond and at the end the principal is repaid in return for the bond.
Bonds used to be conservative investments that offered a better return than C/D's and money mkts, but had some risk because they were offered by private businesses and are not insured. Ratings agencies would offer a rating on the bond. The higher the rating the less risk and lower the yield (interest).
In this case the bondholders were moved to the bottom of the lienholders "list" so the company that was taking over Chrysler does not have to make the bondholders whole. In this case unsecured creditors were given priority.
Bonds are supposed to be a "safe" investment with a low return. That made them attractive to retirees, because they could always count on the money being there no matter what happened to the economy. Like "money in the bank".
Not anymore.
Because they are supposed to be secure and the government has just changed the rules and stiffed the secured bond holders. If they can do it to Chrysler, they can do it to any company. I don’t know if there will be a big sell off or not, since many of these people are really slow on the uptake, but you would have to be insane to trust corporate bonds in any company that deals with unions or is in any kind of financial trouble.
Bondholders are being stiffed in this bankruptcy (it is argued and believed) then all bonds issued by anyone inthis country are in danger of being repudiated just for the hell of it.
Foreign and domestic investors should flee from bonds.
The whole thing is irrelevant to the markets anyway. The SC did not take the case or make any ruling on the merits of the case (which was the key point he made). The last minute appeal failed and no one expected anything to stop the sale anyway. So the people yapping about the markets tanking because of this so-called revelation are in lala land.
OH!!!! Thanks for clarifying that!! I was totally freaking!!
Foreign investors will bolt if we play too many games like this...
Thank you both. I cannot believe that for now the evil of socialism has triumphed.
Didn’t mean to make you work for... I just saw where you asked for the link.
It’s pretty funny.
So if I buy a 1000 dollar chrysler bond, they’d have to pay me off before they could file bankruptcy, or would I have to be fully paid first out of the bankruptcy before they paid anyone else?
WAR!
see #334
I don’t claim to know what the markets will do, but I’m willing to bet that a lot of folks were betting that the SCOTUS was going to weigh in on this and stop it at some point. Now, things strongly suggest that they will do nothing. There is now NO check at all on Obama’s power over the private sector. I’d think that would wake up a couple of people. Maybe not.
Either way, you’re way too caught up what’s on or off the merits. I don’t think you are quite grasping the importance of what happened here. These bondholders were right under the law and they were denied an opportunity to be heard. Sounds like they didn’t give a crap about merits to me.
Contract law is nullified, just like that? That's a primary reason that government exists at all. Holy #$%^&%$ing #%^$.
Fiat is an apt name to be mixed up in this story. Having gutted any meaning out of contractual protections, there's effectively no law anymore, just fiat. Poof. Gone.
Before Obama, yes. Now, it all depends on how much money you donated to his campaign.
see #231
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