HEDGE FUNDS FORCED BANKRUPTCY

According to Bloomberg.com, President Obama criticized debt holders for forcing Chrysler's bankruptcy at this stage. President Obama singled out hedge funds and other financial institutions for turning down administration loan-reduction proposals. The president said the following:

I don’t stand with those who held out when everyone else is making sacrifices ... A group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout.

In a few words, the hedge funds were banking on the fact that everyone else would make sacrifices, with several firms demanding "twice the return that other lenders were getting."

- Mark