This Chrysler announcement yesterday has left me very troubled. If I am thinking about this correctly, President Obama and Car Czar Rattner tried to ram through a deal that was grossly in favor of the UAW at the expense of the company's creditors, secured and unsecured. When it came time to stand up to The Administration to fight for their rights, creditors like Perella Weinberg Partners stood up and suddenly found their fellow creditors, some of the nations largest banks, still sitting in their chairs, mumbling incoherently and staring at their shoes. These are the TARP banks! This vote was going to be like the kind they have in North Korea every few years! The TARP banks were already given their marching orders;
- Vote yes for the government plan.
- Send a message to the rest of your brethren that they better get in line.
The non-TARP creditors didn't get in line and ended up getting called out on the carpet by the President worse than the idiot in his administration who flew a jumbo jet up the Hudson at downtown Manhattan this past Monday! What does tell this you about buying distressed debt? Who the hell knows what the government has in store, what their agenda is, and who might be pulling strings for them. The government has a zombie bank ARMY now! If I were a firm like Perella and Weinberg I would really start to worry about my banking relationships. Who knows if behind closed doors these "rogue" creditors are getting told, "Good luck getting financing in this town again. We're not going to forget what you did here today and we'll make sure our Zombie Bank Army (the "ZBA"!!) won't forget either."
Suddenly, I really can see Paulson and Bernanke telling Ken Lewis that he better take Merrill AS IS, or else! I wonder if we can get "Night of The Living Dead" creator George Romero to work on the movie version of "The Attack of the Obama Zombie Bank Army!"