Posts filed under “Legal”

30 Years Later: A Belated Chrysler/GM Bankruptcy

I am in Philadelphia today, speaking at my friend David Kotok’s The Financial System, Banks & Economy: After the Storm…Where Are We Now? conference, and I may just have to throw away my notes and wing it to speak about the Chrysler bankruptcy . . .

“President Barack Obama aims to announce [Thrusday] that Chrysler LLC will be placed into Chapter 11 bankruptcy, leading to an alliance with Italian automaker Fiat SpA, people involved in the matter said.

Administration officials are still resolving outstanding issues, and the plan isn’t finished, said one of the people, who declined to be named because discussions are private.

As part of negotiations, the U.S. Treasury raised its offer to Chrysler’s lenders to $2.25 billion in cash to forgive $6.9 billion in secured debt, two other people familiar with the matter said. The previous offer had been for $2 billion in cash.”

In the latest proposal, the UAW would (eventually) own 55% of the stock in a restructured Chrysler under a deal reached by the two. Fascinating.


Chrysler Chapter 11 Is Imminent
WSJ, APRIL 30, 2009

Obama Said to Plan for Chrysler Bankruptcy, Alliance
Mike Ramsey and Christopher Scinta
Bloomberg, April 29 2009

Category: Bailouts, Legal, Markets

The Big Picture Conference: Capitalism After the Crash

I mentioned a few weeks ago we were hosting a conference in NYC on  June 3 2009. The conference is coming together nicely, with some terrific name guests committed: • Former CNBC anchor Dylan Ratigan is the master of ceremonies; • Black Swan and Fooled by Randomness author Nassim Taleb is the morning keynote •…Read More

Category: Bailouts, Legal

Weekend Without Bernie

Reporter David Segal looks at the town that might have lost more money per square mile than any other in the country because of the downturn in the economy and the Ponzi scheming of Bernie Madoff.

Category: Legal, Video

The Prisoners Dilemma: John Thain vs Ken Lewis

“Regulators are supposed to tell you to obey the law, not to disobey the law. If you’re the CEO, your first obligation is not to your regulator, it’s to your institution and shareholders.”

-Jonathan R. Macey, deputy dean of Yale Law School


I have not commented on the allegations by Bank of America CEO Ken Lewis that he was forced into making a disastrous acquisition of Merrill Lynch.

Why? Because they appeared to me be utter and shameless nonsense, an attempt to worm out of responsibility.  Indeed, the very statements by Bank of America CEO Ken Lewis appeared to be excuse-making for a lousy acquisition (which Bof A has quite the history of). Its the sort of weasely responsibility evading CEO speak we have come to expect these days. To be blunt, I was astonished anyone took them very seriously.

Yet they were taken seriously, by quite a few people — including a huge front page Wall Street Journal article. The mere accusation means that we are likely to see former Treasury Secretary Hank Paulson — a major cause of the credit crisis and a horrific bailout steward — up for a major grilling in Congress.

This morning, in the same WSJ venue, we learn that many of the statements Ken Lewis made under oath were directly contradicted by former Merrill CEO John Thain (but not under oath). Thain claims these understandings were in in writing.

One of these  two CEOs is lying, and if its the guy who was doing so in sworn testimony, he may have a very big problem on his hands.

Read More

Category: Bailouts, Legal, M&A, Regulation, Taxes and Policy

The Mortgage Netherworld

I meant to mention this NYT article from Thursday, with a wild graphical depiction of MERS — Mortgage Electronic Registration Systems — that holds over 60 million mortgages on American homes: > click for ginormo graphic via NYT The full article is worth reading . . . > Source: Tracking Loans Through a Firm That…Read More

Category: Credit, Legal, Real Estate

Delinquencies Rising at Fannie & Freddie

No surprise here: Even amongst the most credit worthy borrowers — aka “Prime” — defaults are rising rapidly. Job losses, debt problems, loss of income are the primary causes. Prime borrowers at least 60 days behind on mortgages — “Delinquent” is the official term for this period — rose from 497,131 in December to 743,686…Read More

Category: Credit, Legal, Real Estate

Goldman Sachs Sues Blogger “”

Today, I added a new blog to the blog roll for the first time in months. I urge you to do the same. Why? Because they were sued by GS for criticizing the firm: “Goldman Sachs Group Inc. has been called many things over the years. Plenty of people have raged against its power and…Read More

Category: Bailouts, Legal, Weblogs

SEC: Credit-Rating Agencies Require More Oversight

Ever notice the guys who crash planes into the sides of mountains don’t get to do the review of what went wrong? Same thing with other gian calamities: The Captain of the Exxon Valdez didn’t do the crash review; The Challenger Shuttle engineers weren’t the ones who determined it was the O rings, etc. A…Read More

Category: Bailouts, Credit, Legal

Voluntary Foreclosure Abatements Ending

So much for voluntary foreclosure abatement: “Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put their own programs in…Read More

Category: Credit, Legal, Real Estate

Taxpayer Funded GS Profits

Note: By coincidence, this post was written in International Waters a few miles off the coast of Grand Turks and Caicos. If Goldman Sachs wants to sue anyone over this, send your process server to the wreck of the B-29 bomber, off the north coast, approximately 80 feet below sea level . . . ~~~…Read More

Category: Bailouts, Legal, Markets, Taxes and Policy