One further economic thought:

Further to my thoughts about economic recovery, here is a thought about the housing mess. While there are many facets to the problem, and therefore several solutions will need to be addressed, I think this a good solution for a portion of the problem.

In short, there are huge numbers of people who are living in their houses, and who want to continue to live in their houses, but are experiencing a set of similar circumstances. They are under water, i.e. the home is worth less than the value of the mortgage attached to it, they are in a subprime, adjustable loan, they have the ability to prove their income, but don't have enough savings to pay the difference between their mortgage and the new value of their home, and are therefore locked into a bad mortgage situation.

Therefore I humbly submit: for deserving borrowers (they live in the house, seek to REMAIN in the house), have them qualify (prove income documentation) for a fixed rate, 40-50 year amortized loan at a rate they can afford, and modify the note, or originate a new one. Participation in the program would have to require a period of time where the borrower would be required to stay in the home after the note is modified.

This program would be sponsored by Fannie/Freddie, and would therefore be considered to be "Agency Paper." Which would allow the instruments (which now will PERFORM at a much higher rate - typical to standard A-Paper loans) to be sold on the standard secondary markets where Fannie and Freddie live, and lenders would be open to modifying or originating a lot of these types of loans. Essentially any market in the country that has had an active residential construction market over the last 7-10 years will have a multitude of these types of borrowers.

There are also undeserving borrowers in this situation. They will not, and should not, be helped out of the mess they made for themselves. They bought the house on a nasty interest-only, or negative amortization loan, with only one goal: speculation. They possibly have more than one home in this situation, or at least have a credit history that shows this type of activity. During the process of discovery, there will become apparent several nefarious activities, and they should be prosecuted as well - these include mortgage fraud (by both/either the borrower and the mortgage originator), appraisal fraud, realtor fraud, builder fraud (like mortgage kickbacks), etc.

Those people will, and should, be held 100% responsible for their actions.

What a bunch of bally-hoo....

So here's a meat-and-potatoes post for all you who crave such things:

First item: What is it about the older British bands feeling a need to try their hand out at some good old USA country music? The Beatles did it, the Rolling Stones, even Elton John did it... the list is long... it's an odd practice, one that intrigues me. On a related note, I was listening to American Routes the other week, and they had Willie Nelson in the studio, just him and his guitar. I am not a lover of country music per se, and I certainly have never counted myself to be a Willie Nelson fan at all. But I can now understand those who are.

Second Item: In the last nine months or so our family has dumped 4 cylinders of combustion engine from our ownership. I went from 8 to 6, and last weekend ThatOneWife set herself up with a nice little Audi, going from 6 to 4. We're happy for the change, and I must say it's nice to look at the average mileage reading and notice it hitting close to 30 MPG.

Speaking of that, the idea of a "Gas Tax Holiday" is just about the lamest thing I have heard in a good long time. It's the result of election season pandering, and it shows Sen Clinton to be the "nothing changes" candidate she is widely regarded as being. Obama is right to not support the measure.

Think about it - the break serves to do two things: first, it rewards us for driving our big cars, and consuming just as much, if not more than we always have, and second, it penalizes those who need the break the most - they are the ones who are driving the 1987 Tercel, with three good tires and one donut-sized spare, to and from work each day, barely getting by. They drive six miles a day and walk to the grocery store. While the folks in the Excursion are packing off from Indianapolis to Disneyland for a week this summer. That's bad crap, and it's bad policy. In the US, we use as much gasoline/oil as the rest of the world COMBINED. Until that changes, we have nothing to complain about.

Third Item: We went to see The Producers last night at the PTC. I have to say that it was about the best thing I've seen there in a good long time, if ever. You need to go see it. I was a little apprehensive at first... one or two of the voices weren't the best - but as things moved along, the voices got warmed up, and it was great. The show is true Mel Brooks Over The Top Comedy, and it was funny - I was surprised at the fact that they didn't really change any of the bawdy references. I would also say that much, if not all, the Jewish humor and jokes were lost on our whitebread audience. It was friggin' funny.

Fourth Item: All this Rev. Jeremiah Wright crap is giving me a headache. The fact that the Repubs are loving the idea that the longer this battle goes on within the Democratic Party, the better it looks for them. We've all heard about democratic voters who will vote for McCain if one or the other of the two Democrats becomes the nominee, and vice versa, we hear about Republican voters who would rather vote for one of the two Democrats before casting a vote for McCain. What the self-professed independents will do is anybody's guess.

But here's the thing, see... everybody is jumping up and down about Reverend Wright and how poisionous his speech is, but from what I can tell, it's essentially this:

He preached that God doesn't like the way America has been treating blacks for the past couple centuries or so. He even went so far as to suggest that the United States hasn't always acted in the best interest of its black citizenry.

HOO-BOY, that's some pretty radical stuff right there.

Yes, the U.S. has made some progress on the civil liberties front - due almost entirely to huge sacrifices made by black civil-rights workers, and no credit can go to the white politicians and conservative opinion writers who, by and large, have strenuously resisted every civil-rights push in history.

But here's the real thing - a short time ago, McCain aggressively courted, and eventually won, the endorsement of Reverend John Hagee. Who's that, you ask? He's a televangelist from Texas (are they from anywhere else?) who runs a church called Cornerstone Church and founded Christians United for Israel (CUFI). CUFI is one of those groups that think the US must take up arms in defense of Israel (there are MANY of these groups - I've written about them before...) Their position is not one motivated out of any political policy agenda other than the simple fact that if this country was founded based on inspiration from God, as everybody likes to claim, then there is no other position to take than to simply take up arms to defend Israel as the only nation in the history of the world that was actually established by God himself.

If you REALLY want to be scared,go here. If you don't want to go there, here's a quote from Hagee:

"The United States must join Israel in a pre-emptive military strike against Iran to fulfill God's plan for both Israel and the West... a biblically prophesied end-time confrontation with Iran, which will lead to the Rapture, Tribulation, and Second Coming of Christ."

Whack-job who got dropped on his head as a baby.

Hagee claims that the end of times is near, and we must take up a position to defend Israel and make peremptory strikes against those who oppose them (Iran being the most prevalent among those in the cross-hairs of their guns). I say that if the end is near, Hagee and his ilk will be its cause, and I can only hope it will be him who is the center of attention at that time - and I don't mean that in a good way either.

The point is this: which of these two lip-flapping, jaw-clacking morons gives you more cause for concern? I'll take problems in the black church over problems in Israel any day of the week, including Sunday.

Fifth Item: Eldorado Texas. Most recent reports state that at least half of the minor girls in state custody either ARE or HAVE had children. Also, they reported yesterday that there is a lot of evidence of physical or emotional abuse of many of the boys that have been interviewed by authorities as well. The news last night stated that, "This broadens significantly the list of potential victims." In fact, what it does, is broaden the list of EFFING PIG SUSPECTS. Here's a little question for you: How many of those EFFING PIG SUSPECTS do you think are still hanging out at the ranch, just waiting for the fuzz to show up again and round em all up like the scum they are? No, many of them have undoubtedly fled the scene, just like they did from Utah when our idiot AG couldn't figure out what to do, and just like their moron leader was doing when he was busted driving around the countryside in an Escalade with his inbred entourage, piles of cash, wigs, and myriad pre-paid cell phones.

It was comical watching the AG on TV the other night defending himself against Harry Reid's comments about how inept Utah was in the same type of case that put Warren Jeffs in prison. Comical I'm tellin' ya. Utah has a long and documented history of ineptitude and tolerance of polygamy, and to stand back and point to a case where you put one dude in jail on a rape charge when that was so obviously only the tip of a very large iceberg is utterly laughable. Yearning For Zion??? Right. How bout Yearning For Some Multiple Young Poon-Tang. That's a little more to the real point, isn't it?


And that, as they say, is that.

Jingle Mail

Apparently, this is the new catch phrase among mortgage lenders. It refers to what is starting to happen with home-owners who are now simply mailing the keys to the house to the mortgage company along with a note, saying, essentially,

"Hey, remember that note you sent asking me about my last payment? Well, you actually DID receive my LAST payment, 2 months ago. And here's the keys, too. Bye."

Funny, but not really.

Small(ish) world

The US Mortgage Crunch that turned into a US Capital Market crunch that turned into the Worldwide Credit crunch serves to bring lots of things to light.

The British Bank, Northern Rock, holding lots of US Mortgage-backed securities, and a large British residential lender, has struggled like more than 150 other US lenders and banks. Smelling blood in the water, Cerberus (a group I have written about here on several occasions), and a similar company named JC Flowers, run by former Goldman Sachs exec Chris Flowers, have stepped up their bid for taking over the bank.

They intend to leave the bank open and running, leaving a "strong British presence" on the bank's board.

They believe the current credit crunch will be temporary. And when that is the case, those with ability and capital can pick through the trash to find the gems. As mentioned earlier here, Cerberus owns several lenders here in the US, as well as their recent acquisition of Ford Motor Co.

Flowers, along with two US banks, has a $50 per share bid in to buy Sallie Mae, the US Government sponsored student loan co. Their bid WAS $60 per share, but they lowered that to $50 earlier this week, stating a lack of fundamental performance on the part of the company, and general market conditions.

The Canadian luxury home market goes from hot to hotter

Canadian luxury home activity gives new meaning to global warming – this part of the world is enjoying a hot upper tier market.

The first seven months of this year have seen Canadian luxury home market sales jump in major markets from Victoria to Toronto. “The consumer appetite for luxury property has been insatiable,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada.

“Unabated demand throughout the year has created tight market conditions in a number of blue chip neighborhoods. Limited availability of product has, in turn, placed mounting upward pressure on housing values. As a result, the million dollar home no longer holds the same cachet it once did and in larger markets such as Vancouver, Calgary, and Toronto, it’s simply a starting price.”

The table below reflects the strength of the upper tier housing market in six major Canadian cities.

The FED lowered rates, why didn't my mortgage payment go down?

So, the FED lowered two rates yesterday, and the S&P 500 index is up about 3.5% over the two days... so this is a good thing right?

Ask yourself this question - "what does that mean to me?"

If you answered with some form of "now the rate on my variable-rate mortgage will go down...", you should realize that your variable rate mortgage is tied to an INDEX, not the FED rate. more than 90% of variable rate loans are tied to the LIBOR, which is short for London Interbank Offered Rate.

As the LIBOR goes, so goes the rate on your mortgage.

Have you been watching the news on the LIBOR lately? I didn't think so.

Here's a snap-shot:

The British Bankers' Association said the overnight LIBOR -- the interest rate banks charge each other -- remained steady at 6.47% on Monday. The rate, however, remained significantly higher than the 5.87% rate seen on Thursday and Friday. Three-month and twelve-month LIBOR rates set fractionally lower than on Monday, the association said.

From 5.87% to 6.47% is more than a half-point move in the WRONG direction. Overnight. The London folks were sitting on the sidelines watching the Great American Credit Fiasco, thanking their lucky stars that they hadn't been sucked into it, then they realized they HAD been sucked into it when it was noted how many British and European institutional lenders and banking organizations were SHAREHOLDERS in the very same American funds that were now showing themselves to be nothing more than junk bonds.

When they discovered that, the LIBOR went from 5.87% to 6.47%.

And if you have a one-month LIBOR loan (the rate is calculated every month), your rate moved .6%. Overnight.

I bet that was fun.

And in the category of "It's not the rate, it's the program", here's something else...

The FED lowers the rate to try to bring some capital back into the markets, which, if you have been watching the markets in the last two days, you know it HAS, but here's The Thing:

No institutional bank/buyer (who has money available) is going to put its money back into the bond market until the big lenders can prove that they are making responsible loans that will perform and not end up in foreclosure. It's that simple. And as long as those institutions AREN'T buying loans in the secondary market, the lender who made the loan has to keep it, tying up money that could be freed up and loaned out again. This KILLS any lender that isn't THE MOST CONSERVATIVE LENDER ON THE PLANET.

For example, yesterday, Countrywide said they are OUT of any kind of loan business that is not Super Prime, in an effort to convince the market that they are making responsible loans now, please buy them. This is the same Countrywide who, in the last three weeks has borrowed more than 20 BILLION dollars in an effort to stay afloat and make loans.

Until the banks begin to trust lenders again, it doesn't matter what the rates are.

Compared to 12 months ago, there are about 25% of the loan programs available now that were available then. Some may say that's a good thing - we'll see how many lenders exit the business. I can tell you that banking industry layoffs are putting a drag on the economy. Couple that with looming foreclosures, BKs, which will surely follow, and we might be looking at a perfect storm.

My advice for people in the markets: I hope you were holding significant gold futures. Seriously.

Serendipity

I almost always mistake that word for "stupidity"... but anyway...

A couple of interesting posts showed up in the RSS feed this morning.

First, I've been following the story about Apple cutting its iPhone prices, and making the early-adopters show their true colors as whiny, entitled little weenies. Which prompted this to show up this morning over at the CafePress.com web site:
















Funny stuff.

Then, I was reading some other stuff, and noted that Harley Davidson has lowered its earnings expectations for this next quarter, and has removed its entire earnings guidance for 2009 altogether. ("Guidance" numbers are used by analysts to help keep track of how a company is doing versus its own projections, and is then used to help substantiate stock prices and "buy/hold/sell" ratings for the stock.)

The story is that now that we Americans are no longer able to tap the equity in our homes, using them like ATM machines, we aren't buying the stupid things we used to buy, like big motorcycles, cars, boats, and luxury items in general. In short, we have to now go back to EARNING the things we want...

But, we WANT, WANT, WANT, don't we??

We are definitely an entitlement society, and until we figure out how to earn the things we want, we are going to be in trouble. If you dare, take a look at the national debt numbers. Pretty staggering.

So, on to another subject - I was reading an interesting post over at a friend's blog, and he talked about the birth of his kid, about 3 years ago. He noted that due to an umbilical cord issue, the youngling had to spend some time in the NICU right after the blessed event.

Two of our kids are twins - boy/girl twins... they are an interesting pair. Couldn't be more different from each other. The boy came out with a black eye, first, with a look on his face as if to say, GEEZ, get me OUTA here, that chick's got a mean left jab! The girl half showed up all pristine and pretty. Being twins, they were a tad early, and born via C-Section. So they didn't have the funky cone-head thing going on.

In this picture, the boy half is the tallest one, standing in the back row - this picture is a year old. The girl half is third from the left in the front row, with the strawberry blond hair.

They were both shy of five pounds each, which meant that they had to spend some time in the hospital before they gained enough weight to go home. The boy spent more time in the NICU than she did, because he also had a lung that needed a little help to finish becoming fully baked and inflated. Over the next several months of his life we had him back at the hospital a couple of times because of this same issue. We worried about him at the time, but it really wasn't that big a deal.

About 6 months ago, they turned 17. He is 6'3" and his football program listed him at 220 pounds, but he's really about 185 now. No matter what his actual weight is, he is a tank of a kid - long and lean. He has always been a happy-go-lucky easy going kid, rolls with the punches, nothing really bothers him too much. Typical kid in that way. When it was time to hand out punishment for this or that, and when a swat on the arse was warranted, he took his in stride, never cried, as if to say, "yeah, dude, that didn't really hurt."

As for the girl twin, if you so much as looked at her funny, it was a personal affront, and that was typically all the punishment that was needed, for that 10 minutes, anyway. She has always been mischievous, the social butterfly, and that is still the case today. She is having a bit if a hard time with her mother these days, and although that isn't a good thing, she is spending a bit more time over at our house than she usually does, and we are happy for that. She is a person who needs fairly consistent social input, and sitting around watching a movie or something like that isn't really an option for her. She needs to be out there doing stuff with friends. She will always be one of those who has a ton of friends all through her life - she still gets calls from old friends who moved away several years ago, who come into town and want to do something with her. She finds that both weird and very satisfying all at the same time.

No real point to all that, just some fun memories. That's all.

Obama Got it Wrong

On Monday morning, presidential candidate Barack Obama published an editorial calling on lawmakers to corral the "predatory mortgage brokers" who got all these people into trouble by closing bad loans for them."

If you ask most people, they will tell the same general story.

Here's one or two bullet-point things people (including Obama) need to understand before they start using their platform to spread fear:

Mortgage brokers are solicited by lenders. Lenders create and publish loan programs, and employ sales executives to go out and sell those programs to brokers. That's not to say all brokers are blameless, though.

Part of the process lenders use in establishing loan programs, and loan interest rates, is the potential appetite for closed loan files using a particular program. That means the lender (with the exception of a VERY few) intends to sell the loans in a pool of similar loan profiles. This is called "sale into the capital markets". The loans are then packaged into VERY large securities instruments, called MBS's, or "Mortgage Backed Securities", and shares in them are traded every day on Wall Street's bond market. The ups and downs of the bond market are what determine the prevailing interest rates on a day to day basis.

Mortgage brokers are the low man on the totem pole. Loans are never closed in the name of the broker (as the lender), but rather, the loan documents show the LENDER as the mortgagee. It was their loan program, they underwrote the file, collected specific items from the borrower, evaluated the collateral, and agreed finally to lend the money to the borrower.

Further, in MOST cases, the borrower signed a veritable RAFT of paperwork outlining every jot and tittle of the loan terms.

So there's the background information that will hopefully help make my next comment make sense to you.

Here's what Obama SHOULD have said:

There shouldn't be ANY government bailout of anyone in this case. Rather, lawmakers should be going to the lenders (the mortgagees) on these bad loans, and to the original capital market buyer/investor of the loan package, and put into place the following policy:

Foreclosure is not an option for most of the homeowners in certain loan programs, and under certain conditions. Instead, dear lender, you will identify any and all files that have fraud in them at all, and you will take the necessary steps to cure that fraud - if it was the buyer who perpetrated the fraud to take advantage of the system, they will have no recourse. Credit reporting changes will be made to be more stringent and punitive to these buyers, if there is a provable case for such.

(We will need a system whereby buyers can be classified and qualified.)

However, if it is shown that a good borrower has been stuck in a loan that is too punitive in its terms, you will have to modify the note attached to that loan, and you WILL put into place workout terms that are generally acceptable. You will carry these notes for these buyers and you will not foreclose.

Lenders who profited GREATLY from the origination and sale of that security should be forced to now rescue buyers in their program, because it is obvious there were contagious flaws in the program.

There should also be standards within the mortgage lending industry that outline what kinds of terms are allowable, and what are not. For example, a purchase transaction should not be allowed to be originated on any variable interest rate loan without a certain minimum credit score, without putting verified money down. There are lots of examples of what should be allowed and what should not.

And guess what - the MARKET is moving in this direction already. The problem is not that there are not loans to be had out there. It is that those who used to buy loan pools in the secondary market are not buying ANY pools, almost no matter what the profile of the pool. That leaves the lender without the necessary capital to pay off the old mortgage and originate a new one. Secondary buyers are even shying away from Commercial mortgage paper, not just residential.

So, the FED, in the last two weeks, did two things - first they bumped cash into that secondary marketplace, providing needed liquid capital, then they lowered their internal interest rate - the one used to lend short term money to banks. The FED has also set the table of expectations now for the third and final action they may take: the lowering of the interest rate you and I care about.

The expectation is certainly there at this point for the FED to lower that rate at their Sept 18th meeting. The volatility in the stock market over the last two days has to do with this expectation.

We shall see. I don't think interest rates are the problem, and some would even note that the foreclosure rate is not that big a problem either. The problem is enticing the secondary big-money buyers that the pools they may potentially buy will offer sufficient return through timely payments made by homeowners. They are scared kitties right now.

Needless to say, the heyday has passed where one could get a loan by simply possessing the ability to fog a mirror. Now you're going to have to prove yourself. Credit score isn't ALWAYS indicative of that. Many thought it was. Obviously that was flawed thinking, espoused by lenders eager to make as much money as possible. Time to pay the piper.

More Talk about Hedge funds/private takeovers...

So, sorry for the absence. Frankly, there isn’t too much to say for me right now - just tryin to keep my nose down and be successful. These things are tougher these days than past times. One of those things.

A while ago I mentioned the purchase of Chrysler by Cerberus Capital, a private equity fund. I also mentioned that they had significant holdings, not the least of which is the company that owns the local CBS affiliate here in the Salt Lake area.

Today, it was announced that Cerberus has also just finalized the purchase of Option One mortgage from H&R Block. The price was the total of current assets, minus $300 million. To industry insiders, this is no surprise, and we knew it had been in the works for some time. I friend of mine who worked for them told me there was motion in that direction back in February - and I imagine it had been going for a lot longer than that.

A little research turns up the information that not only do they now own Option One, a very large national subprime mortgage lender, but they also own Aegis Mortgage, which runs (ran) a subprime lending arm, and GMAC financial services, a company that started out as an industrial bank in support of General Motors. Since its inception, GMAC has grown into the mortgage lending business by starting or buying companies like WMC Mortgage, another subprime lender. With its current holdings, Cerberus owns a large chunk of the subprime mortgage origination business in the country.

This interests me for more reasons than the obvious - I work in mortgage lending, and it interests me that private fund managers are seeing the same business opportunities in the "dent & scratch" world of mortgage lending, that many other private citizens see in the foreclosure market nationally right now. There is great opportunity to pick up homes from damaged or distressed owners right now, just as there is opportunity in picking up lenders from distressed owners or monetary investors.

Yesterday on the news I listened to a story about how the traffic in these acquisitions has increased in the last 12 months - so much so that there is some concern out there over a possible collapse of hedge funds or private investment funds. It’s because some of these deals have become so large that many, or most, funds can’t afford to walk in to the closing table and slap cash on the table anymore. These deals are financed through banks and letters of credit. There is concern that in order to attract the lending business from these fund managers, some very basic and logical approval steps get overlooked. It frankly looks a lot like what the residential lending landscape looked like 24 months ago. If you had a pulse and a last name, you could pretty much get a mortgage loan. The same is true right now for these fund managers, and banks are falling all over themselves to get that private equity fund business for the bank.

The problem is that the worst loans are made in the best of times. The cycle always churns, and we may be in for a big problem in the future.

And on another note... this is a test post for a new application called ByteScout Post2Blog... from what I can see, if it posts correctly, the application has no provision for assigning or editing categories to a post... perhaps it’s there and I just don’t know it yet...

Some short notes:

1. IKEA opened here yesterday - massive crowds and traffic re-routes. Coming from a city with 2 (count em - 2) Ikeas, it's funny to listen to people who "don't get what all the hubub is about..." We probably have a couple thousand bucks worth of IKEA at our house. They make some great light-wood solid stuff that is really nice. You can kinda see some of it here, if you can look past the slutty dog...



















anyway, they have nice solid beech and birch stuff... very nice, if that speaks to your sensibilities.

2. a random picture for you:










Not sure why I put that there, but hey. Whatever.

3. Was the season finale of Lost last night not about the best fiction TV you have watched all season? Just sayin. RIP Charlie. You the man, with your pixie nose and all that. (sorry if that's a spoiler for you - hurry up and get that TIVO recording WATCHED.)

4. A brief email exchange with ThatOneWife 30 minutes ago:

Her: Hi. How's things?
Me: Hi. Swell. I just got back from a road trip to _______ to pick something up. Got a nice DING on my windshield too. On a brighter note, speaking of cracks, I cracked open the fortune cookie I got yesterday, and it said, "Your financial outlook is excellent." I would have taken one that said, "The stars say you will kill your partner at midnight."

Yeah, I'm having partner troubles. I feel increasingly like a kindergarten teacher whose class is well beyond the need for an afternoon nappy time. Dude, the next steps are right there in front of you, if you have the courage. But you're too busy walking around on the sidewalk looking for nickels, when the dollars are driving by, mere feet from your nose. That's all.

And anyone who doesn't think the our little local economy isn't just humming right along, needs to take a drive on the interstate and take note of all the trucks. Sure sign. Just sayin.

5. You like these?

Honey, I put the Chrysler (Corporation) up for sale this afternoon...

I have spoken from time to time, most recently here, about how struggling publicly traded companies are becoming easy targets for large hedge fund operators, who buy them up, take them PRIVATE, strip the value by (usually) selling all the valued assets, and leaving the carcass of the old company by the side of the road.

Hedge funds are MASSIVE new-power money in the corporate game. They are privately held, and therefore have no reporting or regulation on activities, etc. These are the New Entrepreneurs. They usually seek to return at least 20% interest on their activities, depending on their fund, and the investors in the fund, which can be corporate retirement fund managers, insurance companies, etc. Big Money.

Struggling public corporations are some of their favorite targets, especially those who are bogged down with union labor troubles.

And it seems that the Chrysler division of Daimler-Chrysler is set to be the next victim.

Mr. Mustache has apparently decided that the Daimler-Benz purchase of Chrysler, only a few short years ago, was a bad idea. Duh.

So now they want out. Chrysler is up for sale and there are three bidders. The first two are hedge funds, and the third is an auto parts maker from Canada.

Here's how this will work:

One of the two hedge funds will will the bidding war, and Dieter will get his money back on a bad decision. The United Auto Worker's Union will come unglued, because they wanted the auto parts manufacturer to win the bid, they won't have enough money. The new ownership will be private, not public, and trading in the stock will cease, and any further public financial reporting will cease.

Then, the new owner will look at the assets, and begin to parcel them up for sale.

First on the block will be JEEP. The new owner will separate JEEP from the Chrysler flock like a well trained sheep dog separates a weak lamb from its mommy. It will be packaged up all pretty and sold to the highest bidder. Other bits will be sold off as well. The fund will realize its return, the major players in the transaction will get massive paydays, and Chrysler will cease to exist as it is presently constituted...

And then it's on to the next payday.