When it was announced that Chrysler had until April 30th to make the deal with its creditors, with the UAW, and with FIAT or else face bankruptcy I wondered what that bankruptcy would look like.

On April 29th I watched the press conference from the White House where Obama said he’d been pessimistic about Chrysler but now he had come around to a more positive view. But then the very next day Chrysler filed for bankruptcy. That’s cognitive disconnect number one.

Now I look at the bankruptcy proceedings and it is a circus. It looks like no bankruptcy proceeding I’ve ever seen before. I can’t tell who is in charge, the executive branch or the judicial branch. In court there should only be one arbiter not two, and the arbitration should rest on settled law not people winging it. So, here’s cognitive disconnect number two.

Fiat will be given Chrysler anyway – did Fiat know this before? What motivation did Fiat have NOT to hold out until April 30th? The bondholders are getting raped as it seems their secured debts are being simply re-defined. This violates contratual principles inherent in the US Constitution. Cognitive disconnect number three.

All this really is amazing to behold, and yes, the well of public trust is indeed poisoned in this affair. It is lawlessness and chaos. As an investor I will most certainly steer clear of placing my money in any concern likely to fall prey to this White House. That means all US banks of significant size, and all US industrial concerns especially ones that have union contracts.

I can’t believe its come to this and I hate to take this position; but I don’t want to take a haircut.