Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

U.S. Tactics Spark Worries Over Lenders' Rights
Wall Street Journal ^ | May 1, 2009 | Serena Ng and Angelena Lobb

Posted on 05/01/2009 6:41:00 AM PDT by reaganaut1

click here to read article


Navigation: use the links below to view more comments.
first 1-2021-25 next last
Obama will exacerbate the credit crunch for businesses by shafting creditors, and the Dems are doing the same for consumer credit by tightening the screws on the credit card companies. Maybe the ultimate goal is to encourage direct borrowing from the government, as is already proposed for student loans. Of course, there will be strings attached, and favored groups will have their loans forgiven.
1 posted on 05/01/2009 6:41:00 AM PDT by reaganaut1
[ Post Reply | Private Reply | View Replies]

To: reaganaut1
It's almost as though The Dims pick and choose who wins and who loses rather than going by established principles of law. But it couldn't be that.

/sarc

2 posted on 05/01/2009 6:52:57 AM PDT by BipolarBob (I FReep therefore I contribute to the FReepathon.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1
As El Rushbo says, ‘elections have consequences’

Many of these banking and financial institutions see the writing on the wall and are trying to give the TARP money back, but the Obama Administration is calling for a “stress test”, something that will allow Obama to decide who is fit to survive.
In other words, Obama wants to grab the banks.

He already owns most of the auto industry,
except for that hold out FORD.

Health care is next.

History will declare the election of the Most Merciful Barack Hussein Obama, the moment when America became a socialist state, and likely will call this the Fall of America.

3 posted on 05/01/2009 6:59:42 AM PDT by IrishMike (Liberalism is a psychological disorder and a dangerous mental illness.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

You are correct about stifling credit by shafting bankers. Thank goodness the Senate rejected the bankruptcy cramdown bill. If you view that bill in conjunction with Obama’s Homeowner Affordability and Stability Plan, it basically puts a gun to lenders to take write-downs on mortgages entered into in good faith, effectively enacting widespread coercian of banks to hand over bank capital to repair the balance sheets of undisciplined individual borrowers.

Had that legislation passed, any borrower with a debt-to-income ratio greater than 31% would have had a much, much more difficult time obtaining credit, else the bank would be risking cramdown in bankruptcy. I assure you, many bank loans are made successfully in the 30% to 45% DTI range. Part of the effect of Obama’s “plans” have had the effect of borrowers viewing government as an ally against the bank or an eventual savior to bail them out. Defaults have gone up as a result.

Are Obama and the rest of the libtards in government REALLY wanting to increase the availability of lending? As usual with liberals, their words say “yes”, but their actions say “NO”.


4 posted on 05/01/2009 7:00:12 AM PDT by RatRipper (I HATE tax & spend liberals)
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

of course the response should be for investors to park their money where the government doesn’t look likely to take it away from them.

Thats gonna be bad, huh?


5 posted on 05/01/2009 7:02:16 AM PDT by GeronL (TYRANNY SENTINEL. http://tyrannysentinel.blogspot.com LIBERTY FICTION at libertyfic.proboards.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: IrishMike

and FORD will probably be punished one way or another


6 posted on 05/01/2009 7:03:21 AM PDT by GeronL (TYRANNY SENTINEL. http://tyrannysentinel.blogspot.com LIBERTY FICTION at libertyfic.proboards.com)
[ Post Reply | Private Reply | To 3 | View Replies]

To: reaganaut1

The major creditors who agreed to be subordinated and take an outsized haircut were wards of the state - strong-armed by Timmy G in Treasury. The others didn’t have the fed entanglements and therefore are able to insist on the rule of law over fascism.


7 posted on 05/01/2009 7:07:06 AM PDT by uncommonsense (liberals see what they believe and conservatives believe what they see)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GeronL

“and FORD will probably be punished one way or another”

and if that happens, I can see Ford moving its headquarters to Europe or Asia.


8 posted on 05/01/2009 7:09:33 AM PDT by dmanLA
[ Post Reply | Private Reply | To 6 | View Replies]

To: GeronL

>and FORD will probably be punished one way or another
Already are. The are left to compete against liquidation
prices of Chrysler and GM. Banks will be foreclosing on
many, many dealerships soon. Look for auto auctions of
new cars starting at %20 off, then next week at %40 off,
then next week at %60 off.

How can Ford compete against that?


9 posted on 05/01/2009 7:10:54 AM PDT by oldpass
[ Post Reply | Private Reply | To 6 | View Replies]

To: reaganaut1
If this stands, what private investor will be interested in buying bonds?

If this stands, from now on, the only available source of credit will be the federal government -- which seems to be exactly the plan, for the complete socialization of the economy. This is VERY big.

10 posted on 05/01/2009 7:27:25 AM PDT by PapaBear3625 (The problem with socialism is that you eventually run out of other people's money -- Thatcher)
[ Post Reply | Private Reply | To 1 | View Replies]

To: BipolarBob

The lamestream media Obama cheerleaders just parrot his ‘evil hedge funds’ line, while totally ignoring the rule of law. Yesterday the Senate narrowly defeated the ‘cram down’ bankruptcy provision which would have given judges the right to screw the holders of mortgages of people who filed for bankruptcy. The left has no regard for law when it comes to contracts, but they do not realize the unintended consequences will be a diasaster for our country.

Does anyone seriously think China or the Arabs will continue to buy our debt if they think the terms and amounts can be changed by the whim of Obama? Of course not, which is why long term interest rates are spiking upward in spite of hellicopter Ben buying huge amounts of Treasuries. The curtain has been pulled back, and the world sees the mighty OZLIKE Ben Bernanke is as foolish as wht wizard of OZ, frantically pulling leversm to no affect.


11 posted on 05/01/2009 7:31:04 AM PDT by milwguy (........)
[ Post Reply | Private Reply | To 2 | View Replies]

To: RatRipper

I agree with your post - but I wanted to mention your tagline. It is incomplete.

It currently reads, “I HATE tax & spend liberals.”

It should read, “I HATE tax & spend liberals; conservative ones too!”


12 posted on 05/01/2009 7:40:02 AM PDT by ExTxMarine (For whatsoe'ver their sufferings were before; that change they covet makes them suffer more. -Dryden)
[ Post Reply | Private Reply | To 4 | View Replies]

To: reaganaut1

Of course those “secured creditors” will either relent to Husseins blackmail or face years of investigation, hearings, IRS audits....get the picture?? Ain’t it great to declare a permanent holiday for law and justice??


13 posted on 05/01/2009 7:40:37 AM PDT by Oldpuppymax (AGENDA OF THE LEFT EXPOSED)
[ Post Reply | Private Reply | To 1 | View Replies]

To: PapaBear3625

If this stands, what private investor will be interested in buying bonds?...

For the long term, that is the crux of this matter. If politicians can distort the law to overturn contracts, be they mortgages or bond agreements, then there is no way to evaluate the risk in debt instruments and,hence, no way to price them. The secondary markets will dry up immediately and liquidity will disappear.
The law is the last bulwark of free market. If the judges fail us now what is left?


14 posted on 05/01/2009 7:49:31 AM PDT by Old North State
[ Post Reply | Private Reply | To 10 | View Replies]

To: ExTxMarine

Your point is correct and well taken . . . fixed it.


15 posted on 05/01/2009 8:00:55 AM PDT by RatRipper (I HATE tax & spend politicians)
[ Post Reply | Private Reply | To 12 | View Replies]

To: reaganaut1

This has been superseded by events — the Chrysler situation has now gone to NY bankruptcy court.


16 posted on 05/01/2009 8:31:25 AM PDT by expatpat
[ Post Reply | Private Reply | To 1 | View Replies]

To: reaganaut1

What keeps haunting me is, “How is this legal?” Under what law, what power, does the President do this? Isn’t coercing the TARP banks into accepting adverse conditions against their fiduciary responsibilities to their investors and creditors illegal? Certainly Congress could pass laws to allow this, but have they? Who has standing to sue to put a stop to this?


17 posted on 05/01/2009 8:43:24 AM PDT by dalight
[ Post Reply | Private Reply | To 1 | View Replies]

To: IrishMike

So strange to live through the end of the era of America. We were once the greatest nation the world had ever known. Hard to believe the Great One could destroy us so quickly. RIP the land of the free.


18 posted on 05/01/2009 1:03:23 PM PDT by RichlandChristian
[ Post Reply | Private Reply | To 3 | View Replies]

To: RichlandChristian
Hard to believe the Great One could destroy us so quickly. HOLDONNOW! You can call BHO a lot of things - "The Great One" is simply not allowed. There one and only TGO and his name is Mark Levin. Please, make a note of it.
19 posted on 05/01/2009 1:05:59 PM PDT by don-o (My son, Ben - Marine Private First Class - 1/16/09 - Parris Island, SC)
[ Post Reply | Private Reply | To 18 | View Replies]

To: dalight; penelopesire; BulletBobCo; seekthetruth; television is just wrong; jcsjcm; BP2; ...
Following his speech, OppenheimerFunds said it was willing to make sacrifices but added it had to protect individuals in its mutual funds. The government's offer "unfairly asked our fund shareholders to make financial sacrifices greater than those being made by unsecured creditors," it said.

*snip*

Ty Anderson, global head of high-yield strategies at DB Advisors, Deutsche Bank's institutional asset manager, said that the government's involvement "could become a risk factor for investors, as there's a significant difference between what the government thinks is good for the country and how that could affect lenders' contractual rights."

~~~

0 has no qualms about manhandling and overlording every single segment of business and society, including subverting legal and binding contracts. This is truly bizarroworld.

20 posted on 05/02/2009 10:16:05 AM PDT by STARWISE (They (LIBS-STILL) think of this WOT as Bush's war, not America's war- Richard Miniter)
[ Post Reply | Private Reply | To 17 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-25 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson