BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

[blazespinnaker]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Isn't a bankruptcy, in and of itself, the flouting of contracts?

I mean, when you go bankrupt, nobody has any rights and it's really up to the judge to decide who gets what?

[ricket]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

ADD:
THIS WAS A FULL COURT ORDER, NOT JUST GINSBURG.

There were not enough Justices in the poll to uphold the appeal or consider hearing the case.

Our Constitution just died.

Good thing there's lots of reality TV on to keep the sheeple occupied.

You sir, just got pwned.

So it wasn't Lincoln, it wasn't the IRS, the Federal Reserve, the New Deal, Lincoln ending Bretton Woods, the drug war, the domestic war on terrorism, project Echelon, the national ID card, etc. etc. that killed the Old Republic and the Constitution, it was President Obama and his move against Chrysler bondholders?

haha

Yeah, all these "oh my god, Obama is ruining America!" folks who pretend that he's only beginning to ruin America *now*...they realy, really, really annoy me. We've been traveling down the road of ruin for quite a while now (since 1913 and the establishment of the FRB --i.e. since we lost control of the issuance of our own money). It was only a matter of time before a group of those in charge of our money were dumb enough to try and rob us blind and think we wouldnt find out or that it would work indefinitely.

When you hear/read/watch politicians talk about cuts to "essential" services such as fire, police, etc, you should ask yourself if paying interest on debt (which goes directly into bank coffers) is an "essential" service. Because the *only* reason cuts to fire/police are being enacted now is because all of the money has previously gone to servicing a mathematically unpayable debt in the first place (only the principal was created in the original loan transaction, and not the interest required to service the debt).

You should scream out to the television/radio: "HOW MUCH OF YOUR BUDGET IS NOW GOING TO PAY INTEREST ON DEBT? HOW COME YOU NEVER TALK ABOUT THE DEBT?!?! HOW MUCH OF THE SERVICES COULD BE RESTORED IF YOU STOPPED PAYING THE INTEREST ON THE DEBT AND ONLY PAID THE PRINCIPAL AND/OR WAS REIMBURSED FOR ALL THE PREVIOUS INTEREST PAID?!?!"

[johngaltfla]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Isn't a bankruptcy, in and of itself, the flouting of contracts?

I mean, when you go bankrupt, nobody has any rights and it's really up to the judge to decide who gets what?

By law, believe me I know as an Unsecured Creditor in a corporate bankruptcy, bondholders are always first in line and entitled to 100% or the greatest percentage of reimbursement attainable in a reorganization or liquidation.

Judges until tonight did not have the right to reverse the takings clause of the 5th Amendment. Read the Radford case from 1935 and the history behind it for a greater perspective.

150 years of the rule of law have been changed in one month. Contract law is about empathy, not binding agreements if the Government now so chooses.

[fliped42]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

By law, believe me I know as an Unsecured Creditor in a corporate bankruptcy, bondholders are always first in line and entitled to 100% or the greatest percentage of reimbursement attainable in a reorganization or liquidation.

Judges until tonight did not have the right to reverse the takings clause of the 5th Amendment. Read the Radford case from 1935 and the history behind it for a greater perspective.

150 years of the rule of law have been changed in one month. Contract law is about empathy, not binding agreements if the Government now so chooses.

I agree. The rule of law has been changed. Precedent has been set and every unsecured creditor with a good attorney will be craming down the secured. This is not good for lien rights at all. Obama has taken the power given to him by the Bush Administration and is carving out his chunk of the constitution. He is very vocal on the need for the government specifically the federal judges to take into account the plight of the common man. Pure Socialism. Justice is blind and is their to interpret the laws not make them on a case by case basis because they feel bad for one litigant or another.

[WildspitzE]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Will other nation invest in a country willing to dissolve contract law for unsecured creditors in favor of secured creditors?

By nation, do you mean other countries (meaning, the sovereign institutions themselves)? Or people/private institutions from other nations?

I agree that this is a significant development in the US debt capital markets, and it's another drop in the bucket for US contract law.

While some of us have been forecasting that the corporate debt market will be an ugly step child in the years to come, this certainly adds fuel to the fire. Existing corporate debt was already on its way to get squeezed by rising inflation premiums and lack of support a la QE. Also, in the long run, the higher cost of financing, coupled with expected lower economic activity, was expected to widen credit spreads (in addition to the issues re: liquidity).

To try to monitor the effect of this ruling, I would not only look at the existing yields on secured debt, but I would also try to monitor spread convergence between secured and unsecured debt (comps and market), as well as new secured debt issuance volumes (and failed deals, or cancellations of new issuances). This is easier said than done, given that the market is pretty dead re: new issuances, and spreads are influenced by a ton of other relevant factors. Also, how much of this has the market factored in, and what will be the ultimate legal workarounds (if any) that will get investors "blissfully" comfortable to walk through a credit committee until the next show drops?

Anyway, welcome to the rest of the world! The banana-republic that is the US is wearing no clothes.

Going back to the quote above, and my questions, people buy debt from countries that trample contract law (not to mention all kinds of other "laws") all the time. They do factor in an increased credit premium. Also, it typically narrows the base of those willing to invest in such countries (however, it's also a matter of historical precedent, and relative risk). Lower liquidity leads to increased liquidity premiums. If it's the governments that you're talking about, the answer is: it's political.

[WildspitzE]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Isn't a bankruptcy, in and of itself, the flouting of contracts?

I mean, when you go bankrupt, nobody has any rights and it's really up to the judge to decide who gets what?

Not really. It's complicated, and often times specific to the financing contracts themselves. I'm sure that there will be plenty of legal briefs written by people who are getting paid to write them that can and will be posted here to elucidate the bankruptcy process and the ramifications this has. If I run into any of them, I'll post.

[WildspitzE]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

So it wasn't Lincoln, it wasn't the IRS, the Federal Reserve, the New Deal, Lincoln ending Bretton Woods, the drug war, the domestic war on terrorism, project Echelon, the national ID card, etc. etc. that killed the Old Republic and the Constitution, it was President Obama and his move against Chrysler bondholders?

haha

This is just another drop in a large bucket.

[WildspitzE]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Pure Socialism.

Fascism in Socialism clothing.

The end result is the same.

[Munger]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

ADD:

THIS WAS A FULL COURT ORDER, NOT JUST GINSBURG.

There were not enough Justices in the poll to uphold the appeal or consider hearing the case.

Our Constitution just died.

Good thing there's lots of reality TV on to keep the sheeple occupied.

Dude ... settle down. The Supreme Court deciding not to hear a case no precedential effect. Zero, zip, nada, didn't rule on the merits, none, zilcho. Now stop hyperbolating and go back to your gulch.

[dummass]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Thank you, johngaltfla

You have taken great effort to educate the iTulip members on the ramifications of this decision, the affect it has on constitutional law and the risk it presents to corporate bond holders. I, for one, got the message!

[Munger]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Thank you, johngaltfla

You have taken great effort to educate the iTulip members on the ramifications of this decision, the affect it has on constitutional law and the risk it presents to corporate bond holders. I, for one, got the message!

I will say it again - the precedent of not hearing a case by the Supreme Court is zero, none, nada, nothing, zilp, zilcho, zero. There are myriad reasons SCOTUS won't hear a case, including ambiguous facts, lack of preservation of important issues, lack of circuit court split, etc etc etc etc. SCOTUS has said innumerable times that it means nothing, and they said specifically in this case that they did not examine the merits.

[dummass]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Yes, but the way I understand it, the prior Court's ruling holds. Doesn't this create precedent? Not every important decision comes from the SCOTUS. The fact that they won't hear the case, leaves the door wide open.

[BadJuju]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Yes, but the way I understand it, the prior Court's ruling holds. Doesn't this create precedent? Not every important decision comes from the SCOTUS. The fact that they won't hear the case, leaves the door wide open.

It does not create legal precedence; however, it may signal that the judicial system will avail itself of being entangled in this mess, likely for political expediency.

[dummass]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

Are you an attorney? Are you speaking with authority?

[metalman]

Re: BRKG NEWS 6/9 1924: Chrylser and America dies Supreme Court Rejects Bondholders

I will say it again - the precedent of not hearing a case by the Supreme Court is zero, none, nada, nothing, zilp, zilcho, zero. There are myriad reasons SCOTUS won't hear a case, including ambiguous facts, lack of preservation of important issues, lack of circuit court split, etc etc etc etc. SCOTUS has said innumerable times that it means nothing, and they said specifically in this case that they did not examine the merits.

hitting up the supreme court to kill your competition's deal is a big balls move. give 'em metalman's big balls prize for trying!