Kiss GM Goodbye, Its Bondholders want Bankruptcy
Only in an thoroughly corrupt economy, overseen by a thoroughly corrupt government is it legal to create financial instruments that allow bondholders to collect more money on their bonds if a company fails than if it survives.
Industry experts euphemistically refer to these totally twisted and morally bankrupt instruments as "credit default swaps" or CDS. But, in fact, they are deals bondholders sign with the devil and seal with the blood of a corporation's workers and equity owners.
According to this BusinessWeek report "some of the bondholders own credit default swaps, which amount to an insurance policy against the debt and pay them in full if GM defaults. Those bondholders actually fare much better if GM goes into bankruptcy."
And of course, we all know what happens to workers and equity owners when a company files for bankruptcy -- they're the first to get the shaft because they're the last in a long line of people and companies waiting for their share of money from the corporate carcass.
That's what Americans get for dedicating their lives to productively contributing to the nation's economy - a U.S. Treasury Department whose aim is to get them to "go away" to make room for the demands of the nation's blood-sucking bondholders.
Bankruptcy May Be GM's Best Option
If enough bondholders refuse to budge, GM and the U.S. Treasury Dept.'s auto task force will likely see bankruptcy as the best option to dispose of the debt and solve other issues like cutting labor costs and getting more than 1,500 car dealerships to go away.
[I]f GM enters bankruptcy, it could dispose of the unwanted brands more easily, says CSM's Robinet. Dealers could still sue under state franchise laws, but good luck getting any cash when the secured creditors, parts makers, government, UAW, and bondholders are already in line.
GM also owes the United Auto Workers $20 billion for a retiree health-care trust that will pay medical benefits. Treasury and GM want to give the union a big chunk of that in stock.Unebelievable. Autoworkers work all their lives and expect healthcare in their old age guaranteed and the government and GM wants them to put it "in stock" - so if the stock goes down, so does their healthcare.
I've been saying this for years, but it's worth repeating:
Nothing will change in America or in the world until people realize that an economy cannot thrive while it caters first and foremost to blood-sucking moneylenders and gamblers.
The moneylenders, moneychangers, and gamblers must go - back to the flames of hell from whence they came.