In the classic production Guys and Dolls, one Runyonesquecharacter went by the name of "Big Julie." Big Julie was a gruff,burly mobster who carried an oversized handgun and a pair of customized dice.They were special because they were free of spots and more resembled sugarcubes than dice. When someone had the temerity to challenge one of Big Julie'srolls, he simply took out his sidearm and informed the now-terrified questionerthat he accurately remembered "where da spots formerly wuz."
As you can guess, Big Julie did not enjoy losing.
Seems the current administration has reportedly adopted amore modernized version of Big Julie's gaming philosophy during itsnegotiations with Chrysler.
For those who missed it, banks such as Citigroup andGoldman, both of which received TARP bailout funds had previously fueled moneyinto the troubled automaker. In traditional parlance, they would be defined as"senior creditors" and would be entitled to a place at the front ofthe line should the very real prospect of a Chrysler bankruptcy occur.
However, both were required to gratefully rubber-stampthe current administration plan which would give a UAW trust a 55 percent stakein the manufacturer and Fiat SpA, which incidentally, was not even a Chryslercreditor, a 35 percent share.
However, a legion of some 20 hedge funds balked at theadministration throwing euphemistic Big Julie dice and stood by theircontractual rights as senior creditors.
Remembering where the spots "formerly wuz," oneof those assigned to the president's auto task force reportedly threatened tobring down at least one of the funds with promised rampant attacks by the WhiteHouse press corps. The story was denied, but yet, the lenders who steadfastlyhad stood by their contracts, have one-by-one, agreed to step aside.
Like a game of dice, I always thought that floating acompany money was a pretty straightforward proposition. You either receive arepayment or you get in line to divide what's left of the gargantuan carcass.
This incident however, is a foreshadowing in my opinionof a much larger and far more disturbing trend, that of more governmentlifelines and a slew of marginal companies stumbling along as wards of federalwelfare instead of succumbing to capitalistic Darwinism if you will andallowing other more solvent institutions lead the way back to recovery.
Instead, they simply violated contracts and probably at leasta half-dozen principles of fundamental capitalism along the way.
Big Julie may not have fully understood the work-outunderway, but he surely knew a rigged game when he was in one.
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