From the NY Times DealBook:
“9:55 a.m. | Last Questions: Mr. Henderson is asked by Sharon Silke Carty of USA Today how many bondholders might have credit default swaps that would protect them if G.M. files for Chapter 11. He won’t give a number. That’s an important question, given the suspicion by analysts that many bondholders are balking because they have an ace in the hole.”
Gee. Let me see. Before you deal the cards, would you mind making sure to deal me a crappy hand. That way, you are more likely to win.
I’m really working hard on this one: really I am: I pay some extra money for insurance on my bond, decreasing my risk and lowering my profit. That’s bad. You see, if I had more risk, it would be easier for you to force me to take your terms. How dare I be prudent and protect myself!
I’ve loaned money to a company. G-d forbid I try and get more of my money back rather than less. You’ve no sympathy for me. After all, I’m the idiot that funded this company that, oh yes, you want to save. I took a risk in lending them money. Yes, that’s right. And that’s why I bought insurance!
You tell me my loss is good for the country. I tell you what: If it’s so good for the country, how about everyone pitching in by raising their taxes. On themselves. Better yet: Get off your ass and buy a GM car!
I’ve never heard anything so silly as that investors protecting their interests are at fault here. How about the investors who didn’t?
If it’s good for the country, take my taxes and pay these people off. And, in future, maybe more investors could follow their lead.- Posted by Don the libertarian Democrat