The Chrysalis of Chrysler
Government bailing out a dying firm - ok, debatable, but it can work.
Government telling senior secured debtholders to go fish in favor of junior debt when the company is going into bankruptcy - not cool. You cannot mess with capital structure laws, not even if you are the President of the whole universe.
I would not be surprised to wake up next week and find out that the corporate capital markets had suddenly seized up as senior debtholders suddenly awoke to the fact that they are only senior debtholders at the pleasure of the President.
And I'd think long and hard before loaning my capital to any American business after a stunt like this.
Chrysler is about to enter a chrysalis. It is about to hide itself away from the public for 60 days and emerge a very, very different animal. But if giving birth to that animal causes the laws governing investment in American business to be re-written, that will really be a huge mistake.
"The business of America is business." -- Calvin "Silent Cal" Coolidge.