D.F.

Krause

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May 8, 2009

The Shocking Truth About Those Evil Bondholders

You are a bondholder, and you are bad. You are bad because you are greedy, and I know this because everyone from the media to the president of the United States says so.

Let me tell you why you are greedy. First, there are certain companies who cannot come up with the capital to expand (and in some cases, even operate) unless someone puts capital into the company. Since operating revenues don’t get the job done, they float bonds, and this is where you come in.

You buy the bonds on the condition that the company will repay them according to terms both sides find agreeable. And if the company really needs money, they might convince you to pay them a little more by offering you first position, which means that if it comes to this, you get paid back before anyone else to whom the company owes money.

If not for you and your money, the company would collapse and many people would lose their jobs. They’re not making sufficient profits to do what they need to do, but they’re still in business and they keep operating, thanks to you and your money.

You bastard!

In the strange world that makes writing a business humor column a perpetually easy task, you are the scum of the Earth – at least if you are a Chrysler bondholder – because you expect to actually be repaid according to the terms of your original agreement. And when the government asked you to take 29 cents on the dollar to keep Chrysler out of bankruptcy court, which is where the company now finds itself, you said no.

Now you know that I try my best to write comedy in this column. But there are times when people say things that amount to comedy gold precisely because they intend the statements to be taken seriously. Here is one from our president, concerning Chrysler bondholders. These hedge fund “speculators,” he says, “want to hold out for the prospect of an unjustified taxpayer bailout.”

Right, because, you know, bailouts, well . . .

There are some statements so hilarious that you can only sully them by commenting further.

At any rate, I thought you might be interested to know what really goes on inside the minds of one of these evil jerks, so I conducted a short interview with a bondholder to find out how they really do things. Here is what was said:

Q: How do you explain to the American people that you expect to be repaid in full? Is it a matter of realizing a fair return for your investment?

A: Are you kidding me? Don’t you know why they call us hedge funds?

Q: Now that you mention it, not exactly.

A: We have hedges outside our office where thousand-dollar bills grow. They have Grover Cleveland’s face on them. The mint stopped making them in 1934, but they still grow in our hedges. So when some pathetic company like Chrysler needs money, we just pick it, pack it and send it in. Then we extort them for interest, just to be mean.

Q: Well, I had no idea about any of this.

A: Want to see something? Come here. Look in this hidden compartment behind my wall.

Q: Egad! Where did those bones come from?

A: Those are the bones of workers we exploited to make the hedges grow real tall so we could get more money. We worked them to the point of exhaustion, then ate them for breakfast.

Q: What? You’re cannibals?

A: Really, once you get past the whole “it’s horrifying” thing, it tastes just like chicken!

Q: See, I thought that when the president criticized you and called you greedy, he just really didn’t understand how corporate finance works.

A: Oh, he doesn’t. He has no idea the sort of crap we pull. That swine flu? Yeah, we created that in a laboratory because we have the anecdote hidden away in a warehouse in Roswell, New Mexico.

Q: I don’t think I want to hear anymore.

A: Suit yourself. It’s lunchtime anyway. I’ve got some meat in here for sandwiches. You hungry? Hey! Where are you going?

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