Comments on: Supreme Court Upholds Rule of Law @ Chrysler http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler Seek to achieve sustainable wealth through superior insight into the economic universe with a clear focus and commitment to a diversified approach to long-term investing Sat, 06 Mar 2010 18:12:50 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Dee http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-71 Dee Fri, 12 Jun 2009 23:12:58 +0000 http://www.sustainablewealth.org/?p=484#comment-71 Why blame the Obama administration for any of this ??? it is the will of the people that this President and these members of congress are in charge -- afterall, it was the people who voted in a free election to put them in office, right ?? Therefore, whatever the outcome, it is the will of the majority -- and that's how a democracy functions. Don't get me wrong -- I think we are all going down with the ship -- all I'm saying is -- that's the will of the majority, ignorant or not. Why blame the Obama administration for any of this ??? it is the will of the people that this President and these members of congress are in charge — afterall, it was the people who voted in a free election to put them in office, right ?? Therefore, whatever the outcome, it is the will of the majority — and that’s how a democracy functions. Don’t get me wrong — I think we are all going down with the ship — all I’m saying is — that’s the will of the majority, ignorant or not.

]]> By: Axel Merk http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-53 Axel Merk Wed, 10 Jun 2009 04:05:16 +0000 http://www.sustainablewealth.org/?p=484#comment-53 <p>In my initial post, I wrote, creditors "<em>may</em>" get their day in court. Well, it was a short day, as the stay has been removed. Justices may have been reluctant to delay the process given the high irreparable damage to third parties (think suppliers) that could have been caused by a lengthy stay, especially if the Court eventually were to agree with the lower courts. What made this situation particularly challenging was that only the government seemed to be willing to provide "debtor-in-possession" (DIP) financing, meaning, only with the government's help would Chrysler remain a going concern. Major banks were unwilling and possibly unable to provide financing. </p> <p>The Supreme Court was willing to listen - that's a positive sign. However, Justices will always be reluctant to oppose the President. One does have to respect the Court's decision; however, it does set a precedent and may embolden this or future administrations or courts not to honor the full rights of creditors. Clarity on this issue is a plus, although it is quite likely going to make it more difficult for the industry and beyond to have rational participants provide financing. </p> <p>The longer the stay would have been in place, the more significant the precedent would have been.</p> <p>Axel</p> <p><br /> Axel Merk<br /> Author of <a href="http://www.sustainablewealth.org/book" rel="nofollow"><em>Sustainable Wealth</em></a><br /> President and Chief Investment Officer, Merk Investments<br /> </p> In my initial post, I wrote, creditors "may" get their day in court. Well, it was a short day, as the stay has been removed. Justices may have been reluctant to delay the process given the high irreparable damage to third parties (think suppliers) that could have been caused by a lengthy stay, especially if the Court eventually were to agree with the lower courts. What made this situation particularly challenging was that only the government seemed to be willing to provide "debtor-in-possession" (DIP) financing, meaning, only with the government’s help would Chrysler remain a going concern. Major banks were unwilling and possibly unable to provide financing.

The Supreme Court was willing to listen – that’s a positive sign. However, Justices will always be reluctant to oppose the President. One does have to respect the Court’s decision; however, it does set a precedent and may embolden this or future administrations or courts not to honor the full rights of creditors. Clarity on this issue is a plus, although it is quite likely going to make it more difficult for the industry and beyond to have rational participants provide financing.

The longer the stay would have been in place, the more significant the precedent would have been.

Axel

Axel Merk
Author of Sustainable Wealth
President and Chief Investment Officer, Merk Investments

]]> By: joan spisso http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-52 joan spisso Tue, 09 Jun 2009 22:27:46 +0000 http://www.sustainablewealth.org/?p=484#comment-52 Hope springs eternal! (However, everything that has come to pass demonstrates that our rulers couldn't care less about our hopes, dreams, or concerns). Hope springs eternal! (However, everything that has come to pass demonstrates that our rulers couldn’t care less about our hopes, dreams, or concerns).

]]> By: Jeff Gronwold http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-51 Jeff Gronwold Tue, 09 Jun 2009 22:01:08 +0000 http://www.sustainablewealth.org/?p=484#comment-51 I find this fascinating. I certainly think that the stay will be lifted, the Chrysler sale will go through and the rule of law ignored for "the good of the country". However, I - and almost all others - don't really know much about the Supreme Court and how much they are influenced by politics vs. strict interpretation of the law. I don't know of a single case that the Supreme Court has heard where the law states one thing and the for "the good of the country (as defined by Obama)" states the opposite. I guess we will find out soon enough! I find this fascinating. I certainly think that the stay will be lifted, the Chrysler sale will go through and the rule of law ignored for “the good of the country”. However, I – and almost all others – don’t really know much about the Supreme Court and how much they are influenced by politics vs. strict interpretation of the law. I don’t know of a single case that the Supreme Court has heard where the law states one thing and the for “the good of the country (as defined by Obama)” states the opposite. I guess we will find out soon enough!

]]> By: Hubert Gammer http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-50 Hubert Gammer Tue, 09 Jun 2009 21:33:16 +0000 http://www.sustainablewealth.org/?p=484#comment-50 While I agreed with the administration at the time that drastic measures needed to be taken in the face of economic disaster, it seems absurd to me that they are trying to fight fire with fire or - more appropriately - to save the economy from the debt morass by throwing even more debt at it. The consequences will be long-lasting and serious: the economy will not recover for a long time. And yet the debt crisis will pale when compared to the catastrophic effects the "Chrysler decisions" would have on the economy and its legal underpinnings. Should the decision to strip some of the senior lenders of their rights in favor of unsecured lenders prevail, legal certainty (or what's left of it) will come to an end to the detriment of economic activity. While I agreed with the administration at the time that drastic measures needed to be taken in the face of economic disaster, it seems absurd to me that they are trying to fight fire with fire or – more appropriately – to save the economy from the debt morass by throwing even more debt at it.
The consequences will be long-lasting and serious: the economy will not recover for a long time.
And yet the debt crisis will pale when compared to the catastrophic effects the “Chrysler decisions” would have on the economy and its legal underpinnings. Should the decision to strip some of the senior lenders of their rights in favor of unsecured lenders prevail, legal certainty (or what’s left of it) will come to an end to the detriment of economic activity.

]]> By: Dan Nestlerode http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-49 Dan Nestlerode Tue, 09 Jun 2009 19:17:08 +0000 http://www.sustainablewealth.org/?p=484#comment-49 Rule of law should prevail. The consequences of doing what is just politically expedient and not following the time tested path to and through bankruptcy would be just awful. I would never buy an bond again, especially a government bond. The next step would be the government defaulting on their own bonds to their own citizens because, well, we only owe the debt to ourselves. It never ceases to amaze me how little appreciation the Lawyer Obama has for the law and the consequences of violarting its time tested processes. Rule of law should prevail. The consequences of doing what is just politically expedient and not following the time tested path to and through bankruptcy would be just awful. I would never buy an bond again, especially a government bond. The next step would be the government defaulting on their own bonds to their own citizens because, well, we only owe the debt to ourselves. It never ceases to amaze me how little appreciation the Lawyer Obama has for the law and the consequences of violarting its time tested processes.

]]> By: Warren Gibson http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-44 Warren Gibson Tue, 09 Jun 2009 15:12:59 +0000 http://www.sustainablewealth.org/?p=484#comment-44 Let's hope the Supreme Court strikes a blow for property rights, the foundation of civil society. This would have benefits far beyond the credit markets. It might also slow down the Obama juggernaut in other areas, notably his plans to obliterate what's left of the private segment of health care. Let’s hope the Supreme Court strikes a blow for property rights, the foundation of civil society. This would have benefits far beyond the credit markets. It might also slow down the Obama juggernaut in other areas, notably his plans to obliterate what’s left of the private segment of health care.

]]> By: Chuck Griffiths http://www.sustainablewealth.org/supreme-court-upholds-rule-of-law-chrysler/comment-page-1#comment-43 Chuck Griffiths Tue, 09 Jun 2009 14:47:40 +0000 http://www.sustainablewealth.org/?p=484#comment-43 The Democrats won the presidential election. They won the right to move this country to the left. I don't agree with their policies, but; that is just too damn bad about me. If you view,as I do, life as a great circle, then when you move left 180 degrees, left becomes right and the point where they meet is facism. President Obama is starting to scare the hell out of me !!!! The Democrats won the presidential election. They won the right to move this country to the left. I don’t agree with their policies, but; that is just too damn bad about me.
If you view,as I do, life as a great circle, then when you move left 180 degrees, left becomes right and the point where they meet is facism. President Obama is starting to scare the hell out of me !!!!

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