http://www.businessweek.com/ma…..953110.htm

I wonder whether Cerberus…is now hoarding cash to buy shares of GM…could they may be looking to sell Chrysler while buying GM stock without much disclosure…and get Chrysler off the books while appreciated likely return on GM stock?

These are the dynamics that I was trying to suss out, but you’ve synthesized and articulated them better than I did.

Looks to me like a magician’s trick: “see this hat…?”
They’ve got a rabbit hidden somewhere, and they’re trying to get more rabbits via the bailout, it sure seems to me.

But I also suspect there’s a great deal of criminal activity in all this; in the Information Age, power is/was knowledge. But the structures of secrecy and opacity — combined with arrogance and levels of privatization — appear tailor-made for fraud to remain hidden.

I think of it as a new form of economic parasitism that we’ve not seen before.

As for the GOP (and many Dems) being duped, that’s kind of a slam-dunk in view of what we see playing out. I don’t even think they needed to be paid off in a lot of cases, they just needed to have their vanity flattered. Sad.

Straighten me out…I am not good at details..but given the way that homecomings completely refused to follow the law, the way that buscho actually paved the way for this, the way that those repugs have run the war, the way that this whole bail out is shrouded in secrecy…the world market (one of the disadvantages of which is that it’s very hard to know who owns and runs what and especially so of something like a hedge fund company???).

Am I crazy or could this have been part of the design…to manipulate greed in America in such a way as to destroy it? Okay, having said that sentence…I realize we probably didn’t need any help.

Does anyone have a good business reason for this?

Or does Cerberus hold GM bonds and is now trying to figure out how to take a loss on some portion, now that the UAW won’t make any further concessions without bondholders also taking a haircut?

There’s got to be a reason for Nardelli being partitioned, a firewall of sorts. Is there some reason why Nardelli might be obligated to report publicly on transactions that Cerberus doesn’t want to deal with?

I think the issue with CDSs is we don’t know who benefits from the failure of the big 2.5, because no one knows who owns or sold protection. That means we don’t know the motivation of side players who are lobbying the issue.

Thanks very much — you continue to enlighten!
I suppose that part of what I’m wondering is — since there is zero transparency with respect to who owns the CDSs, couldn’t a party purchase the stock, thereby appearing quite legit.

But then take a side bet via the CDSs?
In other words, present a legitimate front as a stockholder, while ‘hedging’ bets out the back door via CDSs?

If stock is an apple, and a CDS is an orange, there’s more money to be made in oranges, as near as I can tell. At least, if you don’t care about financial sabotage, and you don’t care about long term economic health of a company.

I think these CDSs are profoundly destabilizing; from everything that I am able to read, they appear to incentivize ‘betting on a company to fail’. But I see now that they are not stock — more like an insurance policy, if I have it correct.

I’m also trying to sort out motive, although a bit blinded by the size of my tin foil hat, which seems to be sliding down over my eyes… (sigh).

For motive, I assumed that getting the money from the insurance claims on a ‘dead’ company was a more lucrative deal for a short term investor than waiting until retirement while holding the stock.

Since the stock price is uncertain, yet for each dollar on a high risk CDS you stand to get 30 back if/when the company tanks, you are hugely incentivizing destructive economic behavior that is more focused on extracting ‘capital’ from companies and leaving the carcasses behind.

I don’t know what happens when Cerberus goes to collect from Goldman.
Because I don’t know whether Goldman is solvent.
If it is, then I suppose they pay Cerberus.
If it isn’t…

Okay, time to reshape my tin foil hat…