September 9, 2009

Jack Webb Schools Barry on America

Filed under: Activism,Health Care,Taxes & Government — Rose @ 11:46 pm

Jack Webb Schools Barry on America (From Tom — This can be seen partially as a response to the POS [Pretty Obstinate Speech] Obama foisted on a joint session of Congress tonight):

That’s a fact, Jack.

A $2 Billion Chrysler Double-Cross? If So, It’s Virtually Invisible

ChryslerFiat0609The Obama administration and its car-czar group appear to be intent on teaching someone who got in their way a brutal lesson.

If there’s another way to interpret what is going on involving the “Old Chrysler,” the company’s first-lien secured lenders, and the US Treasury, I want to know what it is.

Readers may recall that in early May, the car-czar group, in what columnist Michael Barone accurately characterized as “an episode of Gangster Government,” bullied those same lenders into accepting payment well below that to which they were entitled. At the time, attorney Tom Lauria, representing a group of what he called “non-TARP lenders,” told Detroit talk host Frank Beckmann that his group was willing to accept 50% payment of their claims (despite their entitlement under contract law to 100%) to avoid forcing Chrysler to liquidate.

The government had already convinced Chrysler’s first-lien TARP lenders (so named because these lenders are among those forced by Hank Paulson in October 2008 at figurative gunpoint to accept government “investment”) to settle for 29%. Treasury and Barack Obama’s car-czar group insisted that the non-TARP lenders do the same, in the interest of giving unsecured creditors, principally the United Auto Workers union’s health care trust (whose rights under contract law were junior to those of the secured lenders) a bigger share, much of which was converted into stock of “new Chrysler.” Under what Lauria described to Beckmann as an atmosphere of direct threats and intimidation, most of the holdouts buckled. After unsuccessful court appeals, the deal giving secured lenders $2.0 billion of the $6.9 billion involved went through.

Secured creditors’ claims stayed in the “Old Chrysler,” which was stripped of most of its value. The ownership structure of “New Chrysler” that emerged turned out to be the following, according to this September 4 Bloomberg report – U.S. Government — 9.85%; Fiat Motors — 20%; Canadian government — 2.46%; the UAW’s health care trust — 67.69%. Secured creditors have no stake in “New Chrysler.”

An inherent assumption in all of this was that “Old Chrylser” would not repay the government bailout money that was “lent” to it, as described in this CNNMoney.com item from early May (“Chrysler LLC” is “Old Chrysler; “New Chrysler” did not yet exist):

Chrysler LLC will not repay U.S. taxpayers more than $7 billion in bailout money it received earlier this year and as part of its bankruptcy filing.

This revelation was buried within Chrysler’s bankruptcy filings last week and confirmed by the Obama administration Tuesday. The filings included a list of business assumptions from one of the company’s key financial advisors in the bankruptcy case.

Some of the main assumptions listed by Robert Manzo of Capstone Advisory Group were that the Treasury would forgive a $4 billion bridge loan given to Chrysler in the closing days of the Bush administration, a $300 million fee on that loan, and the $3.2 billion in financing approved last week by the Obama administration to fund Chrysler’s operations during bankruptcy.

An Obama administration official confirmed Tuesday that Chrysler won’t be repaying the loans ….

“Old Chrysler” is still in bankruptcy, and in the process of liquidating. The proceeds from that liquidation, up to $2 billion, are supposed to go to the secured lenders first.

But guess what? The same Bloomberg article by Linda Sandler and Erik Larson referenced earlier tells us that the government apparently now wants the $3-billion plus in bankruptcy financing back (bolds are mine):

The U.S. Treasury has sent the bankrupt remains of Chrysler LLC a default notice, saying the company failed to pay back a loan due June 30.

Treasury sent the notice of default on Aug. 13, said old Chrysler, now known as Old Carco LLC, in a bankruptcy court filing today. The U.S. government lent Old Carco $3.34 billion to complete its bankruptcy, according to the filing.

Old Carco said it was negotiating with Treasury to “address” the default. The best assets of the old company were sold to a group led by SpA. Old Carco has now reported an $11.8 billion loss on the Fiat sale, leading to a net loss of $10.2 billion in June, court records show.

The company’s private creditors, who lent Chrysler $6.9 billion and expected to get about $2 billion back from the Fiat sale, might get nothing if the Treasury demanded payment of its loans, said the lawyer for a group of creditors who tried to block the Fiat deal earlier this year.

“Having stripped Chrysler’s first lien lenders of $5 billion in connection with the sham sale of Chrysler’s assets to a shell corporation, Treasury is now trying to make it difficult for the lenders to recover any of their losses from the scraps that were left behind,” said Thomas Lauria, who represented the group, in an e-mail today.

Treasury spokeswoman Meg Reilly declined to comment.

‘Nothing at All’

“Neither Chrysler nor the government could have expected the loan would actually be repaid that quickly,” said Lynn LoPucki, who teaches bankruptcy law at the University of California, Los Angeles and Harvard.

“What they must have intended was that the bankruptcy estate of old Chrysler would be at the mercy of the government. In the current negotiations, the government will decide how much, if anything, it will leave in the estate for other creditors of Chrysler — including the professionals working in the case. That can be nothing at all,” he said.

The new automaker run by Fiat, Chrysler Group LLC, would be unaffected by a Treasury demand for payment ….

A Google News search on “Chrysler Lauria” (not in quotes) shows no other press coverage of these developments other than Bloomberg’s Friday before a holiday weekend report. A similar search on “Chrysler default” has very few items. A Detroit Free Press article reporting the government’s default notice makes no mention of the potential disappearance of what secured lenders thought they would receive.

It would appear that both the TARP and non-TARP lenders will be equally affected if Treasury carries out what is from all appearances an outrageous $2 billion double-cross. But the compliant TARP lenders are big money-center banks who are at the tender mercies of Obama administration and other government regulators. Perhaps they’ve been told that going along with a complete washout is in their best long-term interest (“nice bank you have there; it would be a shame if something were to happen to it”).

The non-TARP lenders, on the other hand, as Lauria described them back in May, are “pensioneers, teachers’ credit unions, personal retiree accounts, retirement plans, college endowments.” If it occurs, a zero-out will likely devastate many of these people and entities. It’s hard not to think that from the government’s point of view, a wipeout would teach them, their uppity lawyer, and more importantly anyone else who might want to challenge the omnipotent Uncle Barack & Co., that there will be a terrible price to pay for standing in their way.

It’s hard to see how anyone knowing the facts and sordid circumstances of the Chrysler bankruptcy and its aftermath can defend buying a vehicle from “New Chrysler.”

Cross-posted at NewsBusters.org.

Listening to a Liar ….

Thomas Sowell nails Obama’s desperate attempt to save face tonight, before he even utters a word…

Listening to a liar

The most important thing about what anyone says are not the words themselves but the credibility of the person who says them.

The words of convicted swindler Bernie Madoff were apparently quite convincing to many people who were regarded as knowledgeable and sophisticated. If you go by words, you can be led into anything.

… One plain fact should outweigh all the words of Barack Obama and all the impressive trappings of the setting in which he says them: He tried to rush Congress into passing a massive government takeover of the nation’s medical care before the August recess — for a program that would not take effect until 2013!

… If this is such an urgently needed program, why wait for years to put it into effect? And if the public is going to benefit from this, why not let them experience those benefits before the next presidential election?

… If we do not believe that the president is stupid, then what do we believe? The only reasonable alternative seems to be that he wanted to get this massive government takeover of medical care passed into law before the public understood what was in it. Moreover, he wanted to get re-elected in 2012 before the public experienced what its actual consequences would be.

… There are lots of people in the Obama administration who want to do things that have not been done before — and to do them before the public realizes what is happening.

Read the whole thing here. It is brilliant as usual.

Lucid Links (090909, Morning)

Filed under: Lucid Links — Tom @ 8:40 am

Camille Paglia mostly gets it about Obama’s school speech yesterday, with a larger point (bold is mine):

Who is naive enough to believe that Obama’s plan would be deficit-neutral? Or that major cuts could be achieved without drastic rationing?

…. An example of the provincial amateurism of current White House operations was the way the president’s innocuous back-to-school pep talk got sandbagged by imbecilic support materials soliciting students to write fantasy letters to “help” the president (a coercive directive quickly withdrawn under pressure). Even worse, the entire project was stupidly scheduled to conflict with the busy opening days of class this week, when harried teachers already have their hands full. Comically, some major school districts, including New York City, were not even open yet. And this is the gang who wants to revamp national healthcare?

The “mostly” part is that the school speech was inappropriate in the first place. Those who point to a Reagan speech to kids in November 1988 as a counter-example forget that someone else had been elected the next president already, and that the Gipper’s work, with the help of Thatcher and Walesa and John Paul II, that led to the collapse of the Soviet Union less than a year later, was already done.

But Paglia’s bolded points are critical, and tie together. In general, government has no business being in the health care business, because as with virtually everything except the military, they screw it up. There is little doubt we’d be better off as a nation today if Medicare had never passed — is that $50 trillion-plus unfunded liability an unfortunate bug or a statist feature (forcing us to retain the program even when it’s bankrupting us)?.

But the people in this administration are especially pathetic. They can’t orchestrate a school speech without, in their determination to politicize and indoctrinate, botching it. They can’t run a simple auto-purchase rebate program without creating paperwork snafus and chronically late payments. They think that managing a “stimulus” project consists of putting up gaudy self-promotional highway signs (properly characterized as “the president’s marketing plan“) while absolutely nothing happens for weeks and weeks (see Reed Hartman Highway in the Cincinnati suburb of Blue Ash for just one of many such examples).

Of course, government shouldn’t be in the business of rationing health care in the first place. But putting the largely incompetent ideologues in this administration in charge of rationing, especially given that authoritarian utilitarians like Zeke the Bleak Emanuel and John Holdren would be hanging around, is sheer madness.

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About the Obama birth certificate issue, I wrote on July 20 that:

I think that either the concerns being raised are valid — or that this is the Mother Of All Sucker-Punches, in which case the full release of proof, if ever deemed necessary, will be delivered when the crescendo hits its db peak to maximize embarrassment. I wish I knew which one it is.

We may be closer to finding out which one it is (“Judge orders trial on eligibility issue”). The judge involved, who “tentatively scheduled a trial for Jan. 26, 2010,” is David O. Carter, a United States District Court Judge for the Central District of California.

Delicious fact of the day: Judge Carter is a Clinton appointee.

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As has been the case for quite a while, Fox News wiped the floor with the other three cable news channels on the Friday before Labor Day. The big news is that Glenn Beck’s 5 PM show led the Fox parade by a mile, not only overall, but also in the 25-54 demographic.

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Yet another reason why the United Nations can’t be taken seriously (and shouldn’t have been by George W. Bush in the run-up to the 2003 Iraq War) — “UN Declares Fidel Castro the “World Hero of Solidarity.”

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In advance of the ObamaCare speech tonight, I guess it’s time to bring back the June questions nobody would answer a while ago about a so-called public option insurance arrangement “competing” with private companies who already provide it. The questions illustrate just how absurd and unfair out of the gate the whole idea is.

Here they are:

  1. Will the “public plan” pay income and other taxes like the companies who run private plans must? (Example: Aetna alone incurred $790 million in income tax expenses in calendar 2008, and over $3.5 billion in the past four years. The company’s most recent 10-K indicates that this expense is almost entirely related to its Health Care and Group Insurance.)
  2. What will anyone do to keep the “public plan” from taking advantage of other unfair breaks, which could at least include general government absorption of administrative costs, sales-tax exemptions, property-tax exemptions, “public service” advertising, and much more?
  3. Will the “public plan” be just as vulnerable to class-action and no-limit malpractice lawsuits as private plans currently are?
  4. If the answers to Question 1, 2, or 3 are “no” or “I don’t know,” how can you possibly claim to know that the “public plan’s” competition against private plans will be conducted on a level playing field?

The dirty little secret that doesn’t survive five seconds of scrutiny is that “public option” isn’t about “competition,” it’s about elimination of private health insurance coverage under rules of the game that are so obviously unfair it’s amazing that anyone can take the blather about it seriously.

Positivity: N.Y. Responder Breaks Window, Saves Woman From Fiery Wreck

Filed under: Positivity — Tom @ 7:17 am

From Lockport, NY:

September 7

It was a fiery crash Aug. 29 that could have taken a life.

But Niagara County Sheriff’s Deputy Roger Schreader broke a window and pulled a trapped woman from her vehicle and to safety. He said he was “just at the right spot at the right time.”

“I was lucky. I was a minute away. If I was anyplace else, five minutes away, it would have been a different outcome,” said Schreader, who also happens to be the recently appointed Cambria Volunteer Fire chief.

Charlene Cescon, 45, of Lockport, had stopped at 5:30 a. m. for an iced tea on her way to her job as activities director at Bristol Village Retirement Community in Amherst. At 5:45 a. m. on South Transit Road near Rapids Road, her Ford Escape was hit head on by a Jeep, which crossed the center median. The Jeep’s driver, Gary Miles, 29, of Gardenwood Drive, Lockport, has been charged with driving while intoxicated.

“I don’t believe in luck. [Schreader] was there for a reason,” said Cescon’s cousin, Terry Roberts. “He acted swiftly and professionally and knew what to do. I’m so grateful he was there. Thank God.

“He saved her life, and so did the nurses [who also stopped on the scene].”

Roberts spoke for Cescon on Thursday, as she had trouble breathing while recovering from her injuries in Erie County Medical Center. Her injuries included a large head laceration and six broken ribs. She underwent surgery Friday on her right heel and ankle, which will need plates and pins, and she is expected to spend another week and a half in the hospital.

Jamielee Reynolds of Newfane, a nurse’s aide from Brothers of Mercy in Clarence, was also on her way to work and saw the accident unfold.

“Of course I stopped. I wouldn’t have been able to live with myself if I didn’t,” she said.

And right behind her were two other passers-by who felt the same, David E. Smith of Lockport and Kelly Duffy, a contract nurse from Lockport who works in Medina.

All three were searching for something to break a window to get Cescon out of her vehicle.

“[Smith] was doing everything he could and it just would not break. He even wrapped a blanket around a chair. We were even throwing things,” said Duffy. “I felt so helpless. I had nightmares about it. It got engulfed so fast. I was looking for burns when she got pulled out. It was just seconds. It just haunts me,” Duffy said.

“If it were not for [Schreader], she wouldn’t be alive today. He didn’t think twice. He sprayed the fire extinguisher to bring the flames back a little,” Duffy said.

Schreader, a deputy for the past six years and the Cambria fire chief since June said, “When you work midnights you live with your flashlight, so I just grabbed my flashlight. I just got my fire extinguisher out of the trunk and punched out the window with my flashlight. Knocked down the fire a bit with my extinguisher and reached in the window a bit. By luck it just opened right up.”

“I don’t care what kind of injuries you have. We’ve got to get her out of the vehicle before she gets hurt,” Schreader said. “You do what you have to do and get her out as fast as you can.

“The newer style cars are made of plastic and do burn a lot hotter and a lot faster. A few minutes later [Cescon's] passenger compartment was consumed in flames. Our little fire extinguishers we do carry are not going to put out a car fire.”

Duffy said she plans to get a hammer so she can be ready for a future emergency and said she attended to Cescon on the scene with her medical bag until the ambulance arrived, and even checked out her condition at ECMC afterward.

“It was weighing on my heart and my mind for days. It was all so surreal. It seems like forever, but it was just minutes,” Duffy said. …

Go here for the rest of the story.