Chris Kelly at the Huffington Post brings up a good point this morning. Chrysler is just one of more than fifty companies in the corporate Hades that is Cerberus Capital Management, L.P. They don’t have to bark publicly about their holdings, but have admitted to $25 billion under management in funds and accounts, with investments generating more than $60 billion in annual revenues worldwide. So why can’t one head of the beast help out another? Why can’t the dog ditch their Japanese bank, Aozora; their German bank, Handel und Kredit Bankhaus; a reinsurance company, Scottish Re, some of their seven TV stations or slice of their 65,000 apartments in Berlin? If their 250 Burger Kings were going under would Congress be rushing to save them? Why is Cerberus begging the Feds for scraps like some underweight cocker spaniel, when they’ve got so many bones buried out back?
On second thought, that’s a silly question. Why are we allowing it? Now that’s a question.
I’ve pondered this very thing recently. Why indeed..?
This has been discussed before. Why bail out a hedge fund that has made a bad investment etc. etc. etc? The answer is they should lose money and go down on their own stupidity like all other bad investments by other businesses.
The reason is simple. The bail-outs for GM and Ford couldn’t take place without including Chrysler. If two wrongs don’t make a right, then maybe three wrongs do?
Remember, this debate is not framed by who benefits the most, or who gets the ultimate CYA for terrible mistakes of yore. Please turn away from the actual receivers of all this money behind the accidentally opened curtain to your left. Please look at the Michael Bay-esque Fear Factory we have prepared to market this appropriation of your and your children’s future earnings instead:
Fear of eleventy billion jobs being lost within eighteen nanoseconds of GM’s Chapter Eleven filing. That sure is a lot of jobs! GM’s own research think tank said so, so it must be true like all their other pronouncements.
Fear of lost revenue: None other an automotive industry expert than Rick Wagoner, a master of finance, (Harvard MBA even!) said that the Treasury would lose $120 billion in revenue over the next couple of years if the Treasury don’t give $50 billion or so to the Big Begging 3 now. Its like credit-card miles or Camel Cash – the more you spend now, the more you earn…someday! Might even have enough for the Joe Camel snooker table someday, but only if you buy lots of smokes today.
Oh, and wouldn’t you know it, GM runs the Sun. No more GM, the SUN WILL BURN OUT!
Tom,
Two wrongs don’t make a right……..but three lefts do!
Tex
p.s. I’m looking for humor anywhere I can find it as I ponder my tax dollars being pissed away!
I actually asked this a few weeks ago.
I bought some investments that have lost money. I would like a bailout please.
Cerberus made a bad investment. Sorry.
If Cerberus is not interested in using cash from its other investment to help Chrysler overcome incompetence and mismanagement the current economic environment, I recommend a simple solutions that can be done today without a penny of those pesky string attached government loans…
Chapter 7
Re: tom:
“The reason is simple. The bail-outs for GM and Ford couldn’t take place without including Chrysler. If two wrongs don’t make a right, then maybe three wrongs do?”
Why not, Bear Stearns was bailed out and Lehman was left to go Chapter 11 going on 7.
Bailing out GM is a mistake because it will make their restructuring much more expensive, but Chrysler has no current products and no future products, there is no possible justification for bailing them out.
I’d love to hear from TTAC’s bankruptcy expert if Cerberus could be required to provide financing for Chyrsler by a bankruptcy judge should they file CH11. If not, mustn’t there be some way they can be forced to actually invest in their investment?
They have the money to save the company, just not in the Chrysler bank account. The rat bastards shouldn’t get a cent of my money.
They have the money to save the company, just not in the Chrysler account. The rat bastards shouldn’t get a cent of my money.
Cerberus is Republicans (Snow, Quayle, etc)
that’s why they’ll be at the party
No one will support bailing out Chrysler and precisely for this reason. You want 7 billion? You know where to get it. Cerberus better pony up, because Chrysler isn’t getting jack once the fed sees how much cash daddy has stashed away.
I think people in the U.S. have a lot of growing up to do to be able to make healthier choices about money. We need to expand our perspectives and changer our attitudes and behavior to some degree. Perhaps I’m to see quite a bit of change. I better just accept people as they are and take my chances in this world. I just feel so alone.
The Suppliers and Auto companies seem to be holding the economy hostage. I see workers have taken their own selves hostage and will not make a move till we give them something they want. Its just like a kid crying over a toy. Not that anyone is humiliating to themselves or others, just that they are in need of some tough love to some degree. I wish the American people had more protecting from these types of practices. What about this protection. That is one of the many tough questions to start asking. We are being treated like is our responsibility other adults are crying over their toys (non necessities). Americans have wonderful opportunities for growth, and we will get more fertilizer, I mean even more wonderful opportunities. We need to learn when its prudent to be tough on loved ones. We have a lot of fertilizers to choose from, and will continue to have some for the foreseeable future.
Cerberus props up Chrsyler, Exxon-Mobil looks after GM and Chevron funds Ford … works for me!
At the risk of sounding like a broken record.
Type Cerberus, Snow, Paulsen, Goldman Sachs in the google search line and hit return. Your questions will at least be partially answered.
Also I would imagine (but don’t know for sure) that the principles at Cerberus have very little of their own money tied up in Chrysler. If Chrysler goes under they will however have some very unhappy (and well connected) clients.
If Congress is going to do all this, now would be the time. After all, the massive run on every single currency on Earth with the exception of the USD and JPY won’t last forever.
Apparently, I’m on the other side of the fence on this one. First, let me say I’ve been arguing all along for a CH11 as a PREREQUISITE for any help. And GM’s CEO and Board MUST GO.
But as for the argument that Cerberus doesn’t deserve any help, CERBERUS ISN’T GETTING ANY HELP… CHRYSLER WOULD GET THE HELP.
I don’t hear anyone bitching about the major banks and holding companies that hold, umm, how much? GM debt andor stock getting bailed out. Why not? How much of the bailout billions given to GM would go straight to the banks they owe money to? Likewise with Ford.
For some reason, while it’s popular to bash (rightly so for the most part) the Begging 2.8, it seems to be UBERCOOL to crap all over Chrylser-Cerberus at every possible opportunity. I don’t get that one. If Cerberus had any sense (or balls) Chrysler COULD come out of this as the best American auto company left standing.
In a Chrysler CH11, wouldn’t Cerberus be treated more or less like any other debtorstockholder? I really don’t know on that one. But it’s clear that Cerberus and Chrysler are NOT the same entity. Any more than GM and J.P. Morgan are.
But Wolven, here’s the thing….Chrysler is a dead company with OR without a bailout. They have almost no market left, few current products, and no new products forthcoming. Chryco R&D is non-existent. There have no turnaround plans, no modernization forthcoming, nothing but more layoffs and closures on the drawingboard. Given money, they will STILL be carved up and sold off come this time next year (or the year after), just as soon as someone can be found to pay more for ’em than Cerberus has invested.
It’s just pump and dump, or strip and flip (depending on the current economic environment).