In a surprise, almost off-hand announcement, President Obama told the nation that GMAC will finance Chrysler wholesale (dealer) and retail (customer) sales, as the ailing automaker enters Chapter 11. Obama promised “fresh financing” for GMAC to do the deal. Not Chrysler Finance. The remark adds substance to rumors that the Presidential Task Force on Automobiles (PTFOA) will arrange a shotgun wedding between Chrysler Financial and GMAC, despite objections from the FDIC and the Fed. For some reason, Obama forgot to mention either the merger or the amount of Uncle Sam’s contribution to GMAC that will be needed to back up the PTFOA’s decision not to throw Chrysler into liquidation. Yet. Meanwhile, Obama reiterated his promise to stand behind ChryCo customers with a federal warranty program, details of which are still notable by their absence.
I found it interesting that President Obama urged potential buyers to “buy American” as he essentially told the owners (debt holders of Chrysler LLC) that they were screwed and would get squat under chapter 11 bankruptcy rules.
In the next sentence he endorsed a Fiat-Chrysler alliance (last I heard Fiat was one of those nasty “foreign” automakers)
So… are we supposed to “Buy American” until this partnership takes place and they become a foreign company?
I’m a little confused????
Buying a Chrysler or GM product in the midst of this journey to the Heart of Darkness is just below kissing a WHO certified swine flu patient on my list of priorities
Well since GMAC won’t provide floor plan finance for GM dealers, they may as well do it for Chrysler dealers, eh?
I watched the high-noon-time TV event where Barry declared that Chrysler has declared bankruptcy. Unsaid: another $8 billion thrown into the toilet by the administration, to provide funds which nobody in their right mind would provide to Chrysler to try to get out of bankruptcy, so some portion of it can be GIVEN away to FIAT. It’s a mad mad mad world. Barry called “certain” bondholders of Chrysler “speculators”. Fact: bonds are SECURED LOANS not speculation. But let’s not let facts get in the way of declaring people who don’t go along enemies of the ruling diktats.
If these institutions holding Chrysler bonds had OK’d pennies on the dollar while being pressured by the administration, did they not open themselves to liability (lawsuits) because of lack of fiduciary duty? In other words, it is their job to not hand the baby over with the bath-water, but fight to keep the baby even with the government pointing an empty gun at their heads and verbally assaulting them.
So now we see…..
Do we live in a nation of LAW? Or a nation of DIKTAT? (root word for DICTATOR).
Oh yes, I almost forgot. The President has declared that we’ll have a clunker trade-in law. So it’s going to happen.
The Lawyers are going to be laughing all the way to the bank, until the bank holiday surprises them along with the rest of us.
I read the story, but still very confused? Whiskey tango foxtrot
This is possibly a good sign. Hopefully this means that Chrysler Financial will be left to die on its own, with no more bailouts, now that it isn’t needed for car or floorplan loans anymore.
“Fact: bonds are SECURED LOANS not speculation.”
This is wrong on two levels. 1) Bonds are unsecured loans. 2) Secured loans can very well be speculation.
Many of Chrysler’s creditors have loans secured by Chysler assets, but a regular bond is not a secured loan.
More importantly, someone that makes a loan “secured” by Chrysler intellectual property, trademarks, outdated factories and other illiquid assets that are not valuable outside of Chysler is a speculator.
Remember, Chysler headquarters is not even owned by Chrysler.
Hell, we are in this financial crisis because of speculation on mortgages “secured” by overpriced real estate, the “safest” asset.
It sounds like rather than marrying Chrysler Financial and GMAC, GMAC is simply picking up the contracts with NewCo/Chrysler. Cerberus and Chrysler Financial get to go stick it in their ear.