Expect that any nationalized car company will be zombified for awhile...doomed to walk the market in the new CDS driven coupe of not a'credit event' but in lieu of the Federales teet, not a going concern. -AM)
If the government were to choose a bankruptcy jurist as the car czar, things might be different: the czar would perform what Nancy Pelosi calls barbershop functions -- handing out haircuts to all stakeholders -- and then get out of the way. But that doesn't seem to be the intention: it looks like the czar is going to have much broader strategic input than that, and will be charged by Congress with essentially guiding Detroit out of the wilderness and into some kind of sustainability.
This is good news for Detroit's bondholders, no matter how much of a haircut they're forced to take. Once Uncle Sam's very own car czar is in charge, you can be sure that further liquidity support will be forthcoming whenever it's needed, and that the chances of a re-default in the near future are slim.
On the other hand it's bad news for taxpayers, who will pony up billions of dollars now, just to get the Big Three into the new year, and then billions more in January, as part of the restructuring plan, and then untold billions on top of that in the years to come, as no one in Washington wants to take any responsibility for pulling the plug.