Does Populism Take Precedence Over Rule of Law?
Posted by Larry Doyle on May 7, 2009 11:09 AM |
Bill Gross of Pimco recently wrote:
If the government indeed becomes your investment partner, you should keep the big Uncle in clear sight and without back turned.
Will the manner in which Chrysler has been handled up to now and is handled going forward serve as legal precedent for future bankruptcies? We will learn a lot VERY quickly as General Motors is in very much the same predicament. Given the issues raised by Tom Lauria, attorney for some of the non-TARP Chrysler creditors, are our markets witnessing populism taking precedence over the rule of law? Will our courts try to “thread the needle” under the guise of these automotive companies being special situations?
Answers to these questions will likely develop over time. Different justices may read the law in a different manner. I caution investors, though, that costs associated with parsing the rule of law may be postponed but are not foregone.
To that end, I believe it is also wise to take heed from Jeff Matthews of Ram Partners who raises these questions in a recent short interview on TechTicker:
Additionally, for those who have not listened to the ten minute interview Tom Lauria provided Frank Beckmann on WJR Radio, I will provide my recap and link here: Is Barack Obama Going Tony Soprano? This interview is a MUST LISTEN!!