Well played Hedge Fund managers. Your strategy of rejecting every offer, then trying to smear the White House and work the refs is really paying off:
The judge overseeing the bankruptcy of Chrysler on Tuesday took a significant step toward allowing the sale of most of the automaker to Fiat, approving the bidding procedures advocated by the company and backed by the Obama administration.
The decision by the federal bankruptcy judge, Arthur J. Gonzalez, is a setback for a group of Chrysler creditors who have argued that liquidation of the company or some other transaction could yield greater value. These lenders, primarily investment firms, have said that the plan for the Fiat transaction ran afoul of bankruptcy law and would chill efforts by others to produce competing, potentially higher bids.
But Judge Gonzalez disagreed, saying, “The court concludes that the bidding procedures are appropriate and necessary.”
The judge’s decision was a victory for Chrysler and the government, which together argued that a speedy sale was the only way to protect tens of thousands of jobs and help along the American economy.
“It’s a very big first step,” said Howard Seife, the head of the bankruptcy practice at the law firm Chadbourne & Parke. “It’s clear that the company is moving down the road to a Fiat sale.”
The judge’s decision was the second blow dealt to the holdout lenders during a marathon hearing on Tuesday that began mid-afternoon and ended at 11 p.m.
And just so we are clear, since there will no doubt be a couple more breathless letters whinging about “the rule of law” and the “sanctity of contracts” and “this is America,” nothing improper has been done. Not one law has been broken or violated. This is playing out exactly according to the law, the Constitution, and anything else you want to chuck out.
So when you read the bleatings of some hedge fund manager echoed on every wingnut blog, just remember, no laws have been broken, nothing unethical has taken place, and they only have themselves to blame. Which is, of course, why they are squealing so loudly.
And one final thing. I adore hearing about the sanctity of contracts, because it just cracks me up. Where was all this concern about the sanctity of contracts when the entire Republican caucus was trying to destroy every auto union contract out there? Where was this overabiding concern for the sanctity of contracts every time the autoworkers have made concessions the last couple of decades? Why are there hundreds of thousands of lawyers out there spending every day trying to litigate their client out of contracts or trying to litigate more favorable terms for their clients? Just plain silliness.
The hedge fund managers gambled that they could push Chrysler to liquidation so they could possibly get a few more pennies on the dollar while destroying tens of thousands of lives, and lost. Twice. Sorry, fellows, but just close your eyes, bite the pillow, and think of the Bank of England.
slag
Is a pension a contract? Because isn’t a pension what these carmakers were trying to screw their employees out of?
Napoleon
The hedge fund managers were banking on one thing and one thing only, that Obama was a wuss that didn’t have the balls to pull the tigger on a bankruptcy and so would ultimately pay them what was in effect ransom to let a restructuring go forward. They lost that bet.
What will be interesting is to see how they now act relative to GM.
Bootlegger
I read one letter written by some of these firms claiming that their investors, who would lose under the government’s initial offer, were teachers, policemen and other common folks who had their retirment money with the firm.
Really? Who would be so irresponsible as to invest a retirement portfolio with a hedge fund?
I met with my TIAA-CREF rep yesterday and told them how much I appreciated how they handled my money. Yeah, we’ve lost value along with the stock market, but they didn’t make any risky plays in the credit securitized derivatives, the “toxic assets” that are killing everyone now. He told me that the first rule of finance is to think in the long term and not about short term gains. I remarked that the people running the other financial firms apparently slept in when that was taught at finance school. He just smiled.
The Moar You Know
They already got their lube and the reach-around. They can live without the mint on their pillow.
Leo v.2.0
@slag: A pension isn’t necessarily a contract, but a pension that is agreed to as part of an overarching collective bargaining agreement effectively has the status of a contract. So, yes, the retirees are also creditors and also should be protected by the sacred, sacred, sanctifity of contract.
Hunter Gathers
Won’t somebody please think of the children, I mean the poor destitute hedge fund managers!
Napoleon
@slag:
Yes it is. My bankruptcy law may be a little rusty, but during the 80s there were some particularly egregious examples of companies using bankrupty to void union contracts (I am assuming that the pensions in question are primarily collectively bargained). My Senetor, Howard Metzenbaum got a law enactied that made it harder to change/void union contracts.
That said my impression was that the union has preagreed to changes that will be made in bankrupty. When Obama talked about the Chrysler bankruptcy as being “surgical” he really is talking about what they typically call “prepackaged”. Basically the reorg plan is ready to go when the bankruptcy is filed with enough of the right creditors on board with it going in to pass a vote of the creditors.
Cat Lady
More Obama – fu.
Some day all these self-aggrandizing fuckers are going to stop underestimating the smart reasonable skinny guy, and will over-correct and start overestimating him, leading to out-thinking themselves. Works for me either way.
The Moar You Know
@Bootlegger: Every goddamn investor in America, looks like. CalPERS did.
Slim Tyranny
It is also important to remember that the “sanctity of contracts” comes with a big caveat: bankruptcy.
If they are doing their job correctly, these secured creditors already accounted for bankruptcy (and the related risks that entails to their collateral, their contractual rights, etc.), and such accounting is reflected in the loan pricing, terms, etc.
Pretending now that this is “unfair” ignores the fact that (1) they knew bankruptcy was a possibility, and (2) negotiated the deal accordingly.
Napoleon
By the way John, I have seen you post that you think this is what the hedge funds were motivated by, but I think you are wrong. I know that some of them have made noise to this effect, but that is misdirection. Whenever you negotiate you always try to tie your position to some arguably “fair” reason that you should get what you are asking for. What is not a “fair” reason is to simply state “because we have you by the balls and if you don’t fold we will f- everything up for you”. So they came up with the liquidation argument, which is ridiculous on its face, but if somehow they are actually right about the liquidation value then it is “fair” to ask to be compensated accordingly. So with that arguement they are able to look Chrysler (and by extension really the US government) in the face and say that is why they were holding out, even though everyone in the room would know it was because they thought they had Obama by the short hairs.
It has been reported elsewhere though that apparently the thinking in the hedge funds was that the US would not let Chrysler go bankrupt in a million years so they could use the debt they purchased at around 30 cents on the dollar to squeeze the feds for more.
Ken G.
There’s a BIG difference between the hedge-fund managers’ contracts and those union contracts, pensions etc.
You do NOT, in America, violate the right of the ruling class to make as much money as they possibly can at everyone’s expense.
Those auto workers, as you should well know, chose not to go into finance. They became the servant/peon class by choice. Their pensions belong by right to the shell-game hucksters and the bankers.
Get it straight: REAL Americans are lawyers and financiers. The rest of us eke out a living to serve them. When a sacrifice is needed, it is we serfs who will throw ourselves on the pyre, mighty ones!
anonevent
I hope more judges – and I wish American law would – recognize that there’s more value to a company than just what it can be sold for as parts. Businesses in America are not just about how much money can be given to shareholders, but about employees as well. These two sides need to be balanced. I still think that one of the worst Supreme Court decisions was when they ruled against Henry Ford and stated that the primary concern of a public company is to operate at a profit for its stockholders.
cleek
what these people need is someone to stand up for them, the way Michael Hiltzik is standing up for the credit card companies.
Taibbi
4tehlulz
ZOMG SOC1AIZM OBAMA HAET LAW REVOLUT10Nelevently101010101011111
John Cole
@Napoleon: Oh, I’m fully aware that this was little more than an attempt to squeeze the treasury for more money and that liquidation was just the public face on things. Obama said as much last week.
Besides, the notion that liquidation would yield anything is absurd. One estimate today said their assets are worth next to nothing. Who the hell is in the market for used auto plants right now? Anyone? Bueller?
This all boils down to the Masters of the Universe trying to play hardball for a few more dollars, and someone told them no. They then whinged in the press, and the wingnuts picked it up as a purely partisan matter.
Nothing more, nothing less.
Walker
Yves had a guest post on her site about Section 363 and how this meant that the investors were screwed. They played a game of chicken and lost.
Adrienne
I called it yesterday in JC’s “Spare me” post in response to Kay:
I think I pretty much nailed it.
Bootlegger
@The Moar You Know: Damn. I sure am grateful for TIAA-CREF.
R. Porrofatto
But but but… the game’s been rigged our way for years! You can’t come along and change the “rules” on us just like that! It’s like you plied us with deregulation and seduced us with unlimited bonuses and drugged us with bailout money only to have your way with us! This is just like date-rape… or is that bipartisanship?
lilysmom
Couldn’t happen to a more deserving bunch of folks.
Also, condolences to the Cole family regarding the loss of Sid Cole. He looks like my old cat, Toy, and clearly was fierce guy with a great heart.
Comrade javafascist
First they came for the hedge fund managers, but I said nothing because I was laughing too damn hard (since that’s about all the entertainment I can afford these days.)
Bootlegger
@anonevent: Farther back was a SCOTUS decision (can’t find it now) that defined corporations as individuals with the same rights, without there being any individual responsible. Andy Jackson said back in his day that this would be America’s undoing, I think I hear the ol’ hell-raiser guffawing in his grave.
Ted the Slacker
The hedge fund managers gambled […] and lost.
Precisely.
Though a Slacker by name – and nature – I have in the past been involved in bankruptcy-related brinkmanship. This is the nature of the beast. You sometimes take the offer on the table, you sometimes take your chances in court.
I would however venture this in relation to the 20 Chrysler hold-outs (aside from the fact they are totally misreading the political climate with their DeSantis-esque naivety). If they, as likely, had a strong opinion advising them that they stood to gain more from Chapter 11, then they may bizarrely be better off having not accepted the deal.
Fund investors could have had grounds to sue if the managers had accepted the deal… but, yeah, no sympathy for this mob, this is the nature of the business they choose to be in. Sometimes you lose; so stop crying bitches.
geg6
@Bootlegger:
Yup. I had the same experience when our rep came to campus a month or so ago. TIAA-CREF may be the only fund out there that has an ounce of common sense and some sense of fiduciary responsibility toward its participants. Thank the FSM that we university employees have access to the only one around, apparently.
I’m wondering if their compensation and bonus structure is actually based on long-term results rather than the quarterly earnings reports. I’m guessing, yes.
bago
Now I got to show ya how the west coast rocks.
Really, get past the first two verses.
leo
Has Jake DeSantis quit yet?
Michael
@anonevent
There’s no other way rational way to do it when the goodwill value as an ongoing concern collapses. At that point, all you have left is the skeleton to part out.
That’s what sensible regulation is for.
Bad cases make bad law. Ford was deliberately screwing a set of minority shareholders by squeezing their return on investment at the time (while getting some good PR by paying the squeeze money to employees), and that is a legitimate government concern, too.
flyerhawk
I think this was my favorite part of the article
Methinks these lawyers should stop posting on Internet message boards because they seem to have forgotten that anonymous postings on websites are not, in fact, legitimate.
bago
Perhaps This??
Kirk Spencer
@Bootlegger: Uh, Andrew Jackson never commented upon this. He was dead (in 1845) by the time this happened (1886).
The case was Santa Clara County v Southern Pac. R. Co., 118 U.S. 394 (1886).
Sadly, I agree with the sentence the court used that kicked this off, but think it poorly constrained, which is why it’s done us all so ill in the long run.
Napoleon
@flyerhawk:
Holy s–t. I don’t believe he didn’t kick them right out of court.
So some attorneys show up in his court room, refuse to say who they represent then cite some postings on the internet as evidence. It is something you would expect some winger blogger to do.
Michael
BTW – is anybody counting down the moments until the shit-stirring dung beetles start crawling all over this bankruptcy judge?
Bootlegger
@geg6: I asked them about that, actually they volunteered it. My rep was being evaluated by his supervisor so we had a very enlightening (for me) discussion. They do not give ANY bonuses based on gain. They are a non-profit entity and people get paid to do their jobs, period. If they don’t do their jobs they are looking for work. If they do their jobs they are well-compensated.
I also got some good info on their “social choice” investment, which interestingly only lost 24% compared to the 40% average loss.
John PM
Because shut up that’s why!/silk stocking lawyer
Seriously, however, as one of those hundreds of thousands of lawyers dealing with contracts, a contract is only as good as the parties to it. Typically, a party can breach a contract for any reason. The law does not award punitive damages or any type of penalty for breaching a contract, so if a party decides it is more advantageous to breach a contract, that party will do so. The other party to the contract can them pursue the breaching party for damages, but the non-breaching party also has a duty to try to mitigate its damages by, for example, finding another buyer. If you get a better deal than you would have under the original contract, then you have no damages and no cause of action. Of course, the rules are somewhat different for contracts of adhesion (credit cards, insurance policies) where one party drafts the contract and has most of the power, but in typical business contracts, you always have to take into account the reality that the other party may breach the contract.
That will be $200. I accept Visa and Mastercard.
kay
@flyerhawk:
It was my favorite, too. The whining that Obama was “overturning” bankruptcy law was making my head spin.
Add to that the ridiculous spectacle of the lawyer for the hedge fund managers hinting at “death threats” on FOX and I was really getting upset.
I’m actually surprised that they were relying on comments posted to a web site. I thought they would at least have an email.
It was so transparent, so clearly a tactic, and presented so completely dishonestly. The financial news services were worse. How can they BE “financial news services” and get it so wrong? How can they not differentiate between an offer and an actual bankruptcy proceeding, when presenting this? That’s a really crucial distinction, and they blew right past it. That’s deliberately misleading, and they know it.
NickM
Napoleon wrote:
Probably the most notorious example of a company abusing bankruptcy to void union contracts, and the example that forced a change in the bankruptcy laws, was the Continental Airlines bankruptcy in the early 1980’s, engineered by Frank Lorenzo. Continental was widely understood to have entered bankruptcy just to whack its unions. Under then-existing law, Continental’s collective bargaining agreements were immediately voided.
The outcry was so great Congress created Section 1113 of the Bankruptcy Code, which required an employer seeking to void its union contracts to demonstrate that the concessions it had sought from its unions were reasonable and that it had negotiated for those changes in good faith. Unfortunately, while 1113 was created with the best of intentions — I understand that a number of liberal lions being associated with the legislation and Metezenbaum certainly was a liberal lion — it has, not surprisingly, become little more than a speed bump on the way to the voiding of union contracts. In practical effect, what 1113 now means is that unions get to negotiate with the employer about how to cut wages and benefits, etc. – but have little leverage to affect the total size of the cuts, or argue against their necessity.
InflatableCommenter
Hedge fund managers: America’s new outcasts.
Mexicans with flu, dirty fucking hippies, and tax and spend liberal terrorist sympathizers can stand down.
Bootlegger
@Kirk Spencer: Sorry if my comment about Jackson was miscontrued. I meant that Jackson was commenting on the fact that corporations could not be held responsible like an individual could. As I said, I couldn’t recall the specific case.
slag
@Napoleon: Good to know.
This was my impression as well.
4tehlulz
@flyerhawk: I expect the lawyers to counter that they fear being attacked by /b/tards with Guy Fawkes masks.
“Your honor, we need to permanently seal these records because, as illustrated in Exhibit /a/, Anonymous Never Forgives.”
Brick Oven Bill
Those TIAA-CREF managers are some pretty smart managers. This is because they manage government worker money. The brain power is basically a process of osmosis. And the outlook is even better:
“The TIAA Real Estate Account invests primarily in high-quality, directly-owned commercial real estate, including office, retail, industrial, and apartment properties. These commercial real estate holdings have no direct relationship to Fannie Mae or Freddie Mac-issued debt or mortgage-backed securities, the underlying collateral of which consists primarily of single-family residential properties.”
I also hear that TIAA-CREF is going to get a cut of the Air Force One photos, when they are auctioned on EBay following the Freedom of Information Request. When these returns start rolling in, perhaps geg6 will be charitable.
Davis X. Machina
Your pension stipulated under a collective bargaining agreement may have the force of a contract if it’s with a private corporation, but it certainly does not if you work for a state.
Ask any Maine schoolteacher.
Michael
@kay
I’m actually a little sad – there should be more death threats AND they should be credible, with a few successful efforts sprinkled around.
I’m convinced that nothing less will really start getting the attention of the Masters of the Universe.
These are the kinds of guys whose malfeasance disrupts the labor, savings, hopes and dreams of honest people across generations – and when presented with rage, they expect their victims to back down by whining “its just business. Why be mad enough to beat me over business?”
Basically, they piss all over the social contract, then use the sloppy mess as a shield to ward against their victims’ rightful wrath.
Me, I’m looking for reading about random face punchings and beatdowns outside Wall Street office buildings.
Bootlegger
@Brick Oven Bill: BOB are you really that obtuse? Yes, that’s a rhetorical question.
TIAA-CREF is a good company because they didn’t expose its investors to the crazy risks during the last 10 years. This means that while the other financial “giants” are begging for bailouts they can claim with a straight face that they are doing just fine thank you.
Of course some of their funds went down with the markets, but most of their funds are beating the indexed averages. So suck it BOB.
angulimala
I’d like to phrase my response in the form of a song (imagine the melody).
Suuck iiiit!
Suuck iiiit!
Su – uh- uh- uh -uh -uck it!
Suck it! Suck it!
Suck it! Suck it!
Suck it,
you bitches!!!!!!!
Montysano
Mark “The Great One” Levin had spittle flying in all directions last night, saying that the Chrysler/hedge fund deal means that we’ve officially become a “soft tyranny”, whatever the fuck that’s supposed to mean. I think it’s just code-speak for “we got our asses handed to us in the last election and I don’t like it.”
I mean, even David Fucking Frum is advising the wingnuts to dial back the crazy.
BTW: the title of this post if full of Win.
xyzzy
For god’s sake, John, I can’t take it anymore. I swear I’m not a grammar nazi and I really have tried to hold my tongue, but you’re driving me crazy over here! The verb is whine, not whing, so the present participle is whining, not whinging.
GAH! I guess I AM a grammar nazi! Such a slippery slope. One minute you’re perfectly respectable, and the next you’re putting the thumbscrews to some poor fellow… okay, just call me Cheney and be done with it.
Kirk Spencer
@Bootlegger: Ah. So not about them being individuals, but the oft-metioned:
Note that it’s probably not Jackson who said it. A nearly similar quote is attributed to Edward Thurlow about 50 years earlier. There are indications he, too, was paraphrasing a statement from a predecessor.
Napoleon
@NickM:
Section 1113 was exactly what I was thinking of.
Bootlegger
@xyzzy: I think he’s making a pun. Think “wingnut”, then “wing”, then “whing”, then “whinging”, aka, whining by a wingnut.
angulimala
I wrote a nice little diddy but either it got caught in the spam filter or Ive now been banned from nearly every blog on the innertubes.
…..
Test successful. Sweet.
Bootlegger
@Kirk Spencer: Quote, no quote, Jackson had lots of anti-corporation rants premised on this sentiment. There’s no doubt he believed it regardless of who first said it and he was probably the first (and maybe last) president to attack the idea of corporations.
harlana pepper
why i luff john cole (platonically, of course):
he doesn’t bitch at us if we go off topic and on tangents, i have been a blogwhore in the past so i know of what i speak
But then, John, must you counter your magnanimosity with pics of Ann Coulter in the morning, my God, i am on my third cup and i still wasn’t ready for it, jeebus, have some pity, it’s like seeing the creature from Alien first thing every morning — they have the same jaw line, hmmm
PS, i luff Tunch, too (platonically, of course)
hp
kay
@Michael:
Basically, they piss all over the social contract, then use the sloppy mess as a shield to ward against their victims’ rightful wrath.
More and more I’m thinking it’s not all that complicated. They never had a sense of social contract, so that was never an issue.
It’s about them, personally and indivually, and their compensation next month, and next quarter and next year.
The lone lefty in the WSJ, Frank, has a funny editorial today. He wants to outsource CEO’s. He wants to try using “frugal European managers”, perhaps. He thinks we’ll all benefit if we take CEO wages global, and have them compete with “workers” of comparable status in Bangalore.
someguy
@ Michael
Just out of curiosity, are you going to throw a few federal and state regulators on your list, and some politicians, and maybe some shareholders and holders of subprime mortgages while you’re at it? Seems to me there were a lot of people involved in making this all happen.
The thing is, I think we may be on the road to finally getting over this capitalism obsession and evolving a more human and higher order of economics. So maybe the hedge fund managers and mortgage brokers should be given medals. And then shot.
scav
xxzzy, or, it’s a perfectly appropriate past tense of whinge
Bootlegger
@kay: Got a link?
Maude
@xyzzy:
It’s the Brit version of whining.
Bootlegger
@scav: Damn, all this time I thought it was a great pun.
scav
@Bootlegger: It can still be a great pun, it’s just a well-spelled one.
Adrienne
Two points:
1) Mexicans need not have the flu to be outcasts.
And…
2) You forgot the negroes – the perennial outcasts. When something goes wrong, they always blame it on the black and brown.
Bootlegger
@scav: Making it a GREATER pun!
Xenos
@xyzzy: Check the OED on that – ‘whinge/whingeing’ is common usage across the pond.
Brick Oven Bill
Bootlegger, TIAA-CREF is not a bank that gives out loans, it is a private company that panders to government workers, thus it does not need bailing out. It just gives back less than it takes in.
It’s primary function is to take your money, charge you a commission on that money, and to give you a percentage of your money back, depending on how the market did. A percentage of what you give them out of your paycheck goes to fund those TV commercials, where they assure you that they are working for the greater good.
For instance, their Growth Fund, which seems representative of all of the funds, has lost on average 1.3% per year since its inception. Its reported ‘net change’ is exactly the same as the S&P 500, at a minus 0.37%. This is before the effects of inflation are taken into account.
In addition to this service, TIAA-CREF charges you just shy of a percent more per year to assure you that your decision to give them your government worker money really was for the greater good. Thus the genius of the managers.
These government workers are very smart, you see. They work for the greater good, you see. There are no evil sales commissions at this investment company, they just take a percent. In this regard, TIAA-CREF is not like the others, because they are honest.
Shygetz
@xyzzy: No, the verb is not whine, it’s whinge, and it’s British.
whinge: to complain fretfully (Merriam-Webster)
If you’re going to be a grammar nazi, at least be a correct one.
kay
@Montysano:
I am honestly confused about the tyranny charge. The federal government put up a bunch of money to finance ongoing operations. The union put up 10 billion they were owed. An offer was made. These 30% refused the offer, based on the leverage they had, which was their somewhat questionable contention that bankruptcy law gave them an (eventual) advantage that Obama was not factoring in. Then they went to court.
I can offer anyone anything, before we get to court. It’s just an offer. It’s not “governed” by anything at all. It’s a little silly to call that process “tyranny”.
John Cole
I used whinging instead of whining because in my mind’s eye, whinging sounds more deep-throated than whining and because it went better with the play on the Victorian era phrase that I used as my title.
So there.
Adrienne
@John Cole: Oh whatever JC you use “whinge” a helluva lot! Either way, it does indeed sound better – more forceful in a British fu-fu kind of way.
The Moar You Know
@Shygetz: Goddamn. Here I have been thinking for years that spelling it “whinge” is result of an utter inability to spell. I am stunned, chastised, and thank you for correcting my misconception.
This is one example of the reason I keep coming back here. Best commentors on the web.
InflatableCommenter
@John Cole:
Trust me, the Don Drysdale approach is the way to go.
Just throw one at their heads, and tell them to “bite me.”
Quicker, and always gets the job done.
“Why waste four pitches on an intentional walk when I can hit ’em and put ’em on with one?” — Drysdale
Krista
@John Cole: You’re the first North American I’ve ever met who regularly uses “whinging” instead of “whining”. It’s neat, although I prefer “whining” myself, as it’s more onomatopoeic.
J.A.F. Rusty Shackleford
@xyzzy:
“Whinge” is British slang for “whine”.
Shygetz
@InflatableCommenter: +1 on the Drysdale quote.
geg6
@Brick Oven Bill:
Sorry, BOB. Gotta correct you. I am not a government worker. I am not paid by the commonwealth of Pennsylvania, I am not allowed to participate in the state retirement system, and less than 8% of our budget comes from state funding. That’s less than Halliburton/KBR gets in government funding. My university is a strange entity that I have only seen in PA, called a state-related university. State universities are completely owned and operated by the state, unlike state-related. In addition, my sister who is a professor at a completely private university, like all her other co-workers, participates in TIAA-CREF.
But yes, I’ll agree with you about TIAA-CREF being great money managers. I have not yet had a negative quarter throughout this entire economic debacle. Which is the total opposite of the experience of all my friends and relatives who are not so fortunate as to be able to invest their precious retirement funds with a non-profit fund. None of them have lost less than 40%. Thankfully, my TIAA-CREF rep advised me a couple of years ago that, at my age, risky investments like real estate funds and most stock funds were not the best choices for me. I’m glad I got good advice and glad that I listened to it.
scav
Krista, um, judging by the crowd here, I think there are more of us than John. Granted, it may be like attracting like or just being horribly inbred, but…
Actually, this might be a good time to be very very frightened by the implications of this.
Dave S.
I believe the correct phrase is “the sanctity of MY contracts.” Your contracts, not so much.
Hunter Gathers
@InflatableCommenter:
This is totally off topic, but Alex “Bitch Tits” Rodriguez better be damned thankful Drysdale doesn’t pitch anymore. As it is, half the league is going to be gunning for his head once he come back from his ‘injury’. The treatment he’s going to get from the fans when he goes on the road is going to be brutal. Hell, I’d be surprised if the Yankee faithful don’t boo his prima-donna ass. Taking steriods is one thing. Tipping pitches is something completely different. You don’t do that, at any level. He might as well put a target on the back of his head when he goes up to bat.
Drysdale would have aimed for his neck on every pitch.
cliff
I’d really be curious to know how many of these hedge funds held credit default swaps (that would only pay with bankruptcy) and Puts on the common.
don’t worry, they made millions by pushing it into bankruptcy.
cliff
nevermind on the puts, its private, but I bet they held lots of CDS.
Dr. Squid
It is amusing watching the Randroids and conservatives bitch about Obama being both fascist and socialist simultaneously. Apparently their definition of fascism is when the government does, with respect to corporations…. something. And we all know their definition of socialism is when government does… something to help someone other than corporations.
stickler
Listening to Levin and Savage has been sixteen kinds of fun this week. “Fascism,” “tyranny,” “Stalinism,” you name it, they’re throwing it out there. Hilarious. And when Savage got banned from travel to the UK he sounded like he was going to infarct on the air. He actually told his listeners to buy copies of all his books, and mail them to the UK Embassy with protest letters inside. Cynical bastard. And I’ll bet a few dozen members of his addlepate audience do it, too.
I sure hope Obama is really going to take on Wall Street, and that this isn’t just a bunch of bullshit kabuki.
Joel
@John Cole: Whinge is an awesome word. Australians use this term all the time. And no one fucks with Australians.
Brachiator
Fixed.
The whining, squealing and infantile tantrums are international phenomena.
John S.
Must be a day that ends in ‘y’.
DougJ
How can you close your eyes and think of England when you don’t even know who’s on the team?
–Billy Bragg
One of my favorite quotes.
Bootlegger
@Brick Oven Bill: Dumbass, I was talking the so-called “investment banks” like Goldman et al. that we’re bailing out for their stupid decisions.
You obviously can’t read a table, most of their funds are +5% or better since inception and that is counting last year’s 40% deop.
Finally, its a privately owned, non-profit company. I’ve loss far less on my retirement than everyone I know.
jenniebee
I always thought that Victoria’s quote combined with John of Gaunt’s speech from Richard II made for some interesting reading:
This royal throne of kings, this sceptred isle,
This earth of majesty, this seat of Mars,
This other Eden, demi-paradise,
This fortress built by Nature for herself
Against infection and the hand of war,
This happy breed of men, this little world,
This precious stone set in the silver sea,
Which serves it in the office of a wall
Or as a moat defensive to a house,
Against the envy of less happier lands,—
This blessed plot, this earth, this realm, this England.
Oh England! England! Ohhhhhhhhh…
terry chay
@Bootlegger: Here here! I’ve lost a lot of paper money in TIAA-CREF recently and back in 2001, but as a whole it’s done exactly the investment the various CREF options have claimed to do.
Calouste
@slag:
It’s not really a contract if it is with the
serfslittle people.sparky
dunno if this is kabuki or gen-u-whine [sic] whinging by hedgies. they made a fortune on CDS in the first place, then they made more when the UST decided to honor them (TARP/TALF & the various other UTT (under the table) funding mechanisms). it may be that this is just well choreographed crap as we shovel more $ to the FIRE sector. on the other hand it could be somebody complaining that they had to take more of a haircut than they thought they ought to. if that’s the case then they really are as stupid as they seem.
still, i am starting to get the sense that the Obama people are also engaging in a little misdirection generally, and that people are lunging for it because they are desperate for any crumbs of “better” policy post Bush.
terry chay
BTW, since BOB is polluting the debate as per usual Here is the TIAA-CREF portfolio. All of their CREF funds have had a positive net return since they’re inception. BOB was cherry picking the worst performing fund and comparing it to their index fund—any student of Random Walk on Wall Street knows the deception in that! BTW, you can’t compare the funds directly since they have different inception dates: funds like “CREF stock” are very old, while “Social Choice” are relatively new. In addition TIAA-CREF has had a number of more traditional annuity-driven accounts for years under the TIAA label.
TIAA-CREF manages the retirement of many higher educational institutions, not the government. In my case, my portfolio was inherited on the death of my mother, a University of Pittsburgh professor—I believe Bootlegger has already explained the intricacies of how Pennsylvania chooses to participate in its funding. When I was employed there for a year, I had a choice of either pension or TIAA-CREF. The fact that TIAA-CREF has outperformed nearly always beat the pension option is a testament to how well managed their funds are. After all, we can’t say that about almost all 401ks out there (my 401k picks have be an exception).
This leads to a general observation of the unfairness regarding the structure our entire retirement system. As an well-educated, well-paid person, I’ve managed to do very well for myself. The 401k-based retirement system (and TIAA-CREF) is biased heavily in the favor of someone with enough disposable income to take advantage of it and the intelligence to invest it wisely and know to roll over to an IRA when I change jobs. Others (like BOB) will depend on their social security stipend for most of their retirement.
This is sadly not very egalitarian.
James Hare
What’s funny is these guys represent about $300mn of $6.9bn debt. How they can command so much attention is beyond me.
Mnemosyne
@Brick Oven Bill:
And that makes them different from Fidelity or Vanguard … how, again? I’m at a private company so my 401(k) goes through Fidelity — why am I supposed to be getting indigant that TIAA-CREF takes people’s money and charges fees when Fidelity is doing the exact same thing to me? Is it because they do their work for the — GASP! — government employees instead of private sector employees, so therefore they’re soaked in evil?
asiangrrlMN
I love the word whinge. Thank you all for pointing out its merits (even though the damn spell check doesn’t like it). I also love the word snarky.
As for the hedge fund managers, I can only offer a tired “Bite me”. I am still dispirited. I hate spring/summer. I want my snow and freezing temps back!
@Dave S.: Love this. Yes, it’s only their contracts that matter, not anyone else’s.
Mnemosyne, I gotta say, I’ve seen you comment on other sites, and I always enjoy reading your posts. Love your handle, too.
grumpy realist
…as I said, these guys shot themselves in the balls, jumped into a war, and disarmed themselves, all at the same time.
And anyone who laments about the poor, poor, picked-on investors in a hedge fund, better take a look at the definition of a Qualified Investor (which is the class of investor hedge funds limit themselves to.) $1M+ in assets or $200K income a year. Yeah, that’s the “ordinary person” all right. Hedge funds are deliberately set up to take advantage of a collection of Safe Harbor clauses in the SEC regulations. (Basically, the SEC says you don’t have to worry about security regulations if you’re raising a small amount of money *or* if you are an investor with enough money. The first clause allows people to invest in mom-and-pop stores; the second clause assumes people who are rich enough also don’t need to be protected from losing their money.)
CALPERS et al. may have decided to plunk a chunk of money into a hedge fund, but that’s something to take up with CALPERS and their playing in the tank with the sharks. Hedge fund investors are NOT “ordinary people.”