Daily Archives: 9 May 2009

White House “Directly Threatened” Perella Weinberg Over Chrysler

“The White House threatened to use the White House press corps to besmirch the reputation of one of the financial firms that holds Chrysler debt, according to a prominent New York bankruptcy lawyer. If true, the explosive charge shows that the White House was willing to go much further than is widely known to have its way in the attempt to restructure the Detriot automaker. . . .

Perella Weinberg had been one of the firms that was resisting the Obama administration’s plans for restructuring, alongside Stairway Capital and Oppenheimer Funds. The group had argued that their position as senior creditors gave them legal rights to be paid in full before junior creditors were paid. They had put forth a counter-offer under which they would have received far less than the face-value of the debt they held, but more than the Obama adminstration had proposed. This compromise deal was rejected by the administration, and the holdouts were characterized by the president himself as unwilling to make sacrifices for the common good.” (Read more from businessinsider.com)

If Chairman Obama insists on renegotiating the terms of loans “for the common good,” there will be many fewer loans.

This reminds of how Herbert Hoover called captains of industry to the White House and convinced them to “voluntarily” keep wages and prices high, thereby ensuring the highest unemployment America has ever seen (and wide-spread malnutrition).

End the Fed Update

Ron Paul asking Bernanke tough questions as he does here is nothing new:

Toward the end, Bernanke says he’d be open to provisions which limit the Fed’s secrecy. (Yeah, right.) He goes on to suggest they have oversight from the Inspector General. Well, lets see what Inspector General Elizabeth Coleman says when questioned by Rep. Alan Grayson:

Commentary from the Huffington Post article Fed Inspector General Knows Roughly Nothing About The Fed: Coleman could not tell Grayson what kind of losses the Fed has so far suffered on its $2 trillion portfolio, which has greatly expanded since September. She appeared unaware that the Fed engages in trillions of dollars in off-balance-sheet exchanges. She is not investigating the role of the Fed in allowing the collapse of Lehman Brothers. She did not know where the Fed has invested its $2 trillion on the liability side of the balance sheet. ‘I do not know. We have not looked at that specific area at this particular point on,’ she said.

Sounds like she doesn’t know much. Thank goodness we have the internet, so these criminals/useful idiots can be exposed for what they are.

There is some reason to be hopeful. Ron Paul’s HR 1207, the Federal Reserve Transparency Act now has over 120 co-sponsors. This level of support would have been unimaginable just a few years ago.