Well, the Hoosier State threw a real spanner in the works. As of 5:00 pm the stay against the Chrysler bankruptcy plan still stands with no clear indication as to how Justice Ginsburg or all of he colleagues will come down on what has been somewhat overlooked as one of the critical constitutional and business issues that has arisen in many a year. The United States has always had one immutable thing that has set it apart from all other nations save perhaps England; the absolute dominance of the rule of law and the consistency with which it has been applied. This has been an enormous advantage over the ages; the greatest advantage perhaps that we enjoy. Individuals of any nation and corporations regardless of their origin stand equal before the bar in this country. No other nation in history can claim this equality. The law has always been fairly and equally applied.
Some weeks ago we joked that Fiat may not understand their relationship with the government of the United States as its relationship with the various governments of Italy have been, shall we say, cozy. This suit, brought by the Attorney General of the State of Indiana on behalf of Indiana government investors against the Chrysler bankruptcy plan is IMHO in the finest of traditions of American jurisprudence. One and all should watch the disposition of this case. It may well prove critical not only in the specific incidence but as to what kind of a system under which we shall go forward. Are we to have a free market society in which the sanctity of contract and the rule of law stand unabated, or will we live under a different understanding of the definition of rights? All societies evolve but not always to the general benefit. Is this one of those moments? We shall see.
$35 Billion in new auctions and refundings this week in the 3, 10 and 30 year maturities. No one seems to be too concerned as to their success but the 10 year benchmark continues to creep upward towards the important--at least from an emotional standpoint--to the 4.00% level.
As this is being written, Oil is well-bid at $70.54 a barrel, up over 2 bucks from the open. Commodities continue to move higher and the dollar in getting crushed. One talking head mused whether these actions might impede the recovery. It would be funny if not so sad. There is no recovery: unemployment is up, the lower advance figure is present only because people now realize the temp jobs number is way up, income levels are down across the board; unemployment has pushed through the 9% level with some Federal Reserve Banks hinting at 10-11.5% by next year. The Leader's plan, after five months has been a failure heading towards a catastrophe with spending out of control and a new czar for some segment of the economy being created daily seeming without any Congressional oversight. Results and improvement need to be shown quickly or confidence, which showed a nice up-tick in March will begin to quickly erode. I fear that this may well be a lost year leaving the country even more vulnerable to exogenous shocks. One hopes one is wrong.
Meanwhile, Our Hero s getting some of his money back as a number of TARP institutions are going to be allowed to repay the advances most of them didn't want in the first place. How nice. But here's a goodie: the TARP funds were allocated by Congress for a specific purpose. The monies to be returned seem to be destined for some sort of "rainy day fund" that Our Hero can use for whatever his little heart desires. Where is Barnie and his "oversight" when you really need it?
Finally, The Leader, Our Hero and their entire mob have apparently decided that the regulatory mechanism presently in place needn't be rejiggered; what we have is ok, what we need is better regulation. So much for Shelia Regina...or is it too soon to announce her demise? Methinks somebody better have a wooden stake close by. This is going to be a hell of a summer.
Looks like the Chrysler boat might be dead in the water.
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