Excerpt: Ulsterman: Explain that please – the bond holder deal. You’re speaking about General Motors?
Wall Street: Yes! That’s right – that deal…that horrible-horrible deal. Pennies on the dollar. Take it or leave it. The threats leveled against the bond holders, the management firms…it really shook us up. All of us. Every one of us who work in this environment – the government just came in and for all intents and purposes, took over. The law be damned. The bond holders were pushed aside – illegally mind you, totally without legal basis… and the keys to that company handed over to the labor union. I am going to remain calm…trying to remain – respectful…but what happened at that time was…it should have never happened. Never. Not in this country. Venezuela perhaps – but not here. That equity conversion was a farce. The default swaps…they were rightfully in line. The law – in court the law would have been on their side. They walked those poor people out onto the plank. I’ve seen those tactics done before, but never by the United States Government. Not on that scale. Never. And what that deal did – the auto bailout…it wasn’t a bailout though. It was a takeover. That scenario sent tremors throughout the entire financial community of this country…and the world. All of us – well I can’t speak for everyone of course…but every single one I know of, we were left stunned. And then afraid.
Ulsterman: Afraid of what?
Wall Street: That’s just it – of what? At that point we didn’t know what else might be coming from this administration. What it was capable of doing next. Wall Street went into duck and cover mode – the exact opposite thing you want to see happen during a recession. It’s a big reason why – it might be the reason why we are still not recovering like we need to be. Everybody remains afraid.
Ulsterman: Afraid of the president? Of his administration?
Wall Street: (pause) Yes.
Read part one here.