>>
>>The bailouts also shredded bankruptcy law and forced first secured lenders to take major losses on loans they had made to the automakers with the legal assurance they'd be first to recover assets from the companies.
>>
>Could you go into more detail on what is meant here ?
>
>Few days ago there was the trhread where customer assets were given as security to a bank
>and the bank was allowed to keep them after collapse. Disturbing tendency IMO.
>Makes the trend into clinking Gold even more plausible..
>
>tia
>
>thomas

I'm not up to speed on the bank seizure of assets article. I saw it but have not spent much time analyzing. My gut tells me it's doomsdayish but there's a bit of that coming true these days so...

As for the auto bailouts, in order to pull them off in a politically viable way (ie pay off backers) the administration & the FED needed to usurp existing bankruptcy law to allow the government "purchase" of the companies so they could orchastrate the "reorginization". The long term damage is that politically motivated strategy unjustified by law is now in the playbook when it should've been instantly stopped legally as against existing bankruptcy laws.

Here's a great read on the bailouts. If you're only interested in the bankruptcy law issues skip to the heading "The Bankruptcy"
http://www.nationalaffairs.com/publications/detail/the-auto-bailout-and-the-rule-of-law