05/31/2009 05:12 am ET | Updated May 25, 2011

Chrysler Vultures May Win Too

In real estate, the speculators with the little building in the middle of the block who refuse to sell to the developers are "block busters" or "spoilers". Some could label them as extortionists trying to shake loose a little extra for themselves.

Today in the Presidential press conference, the "spoilers" got their come-uppance in the Chrysler brinkmanship talks and deserved to. President Obama said some "hedge funds" were holding out to double their bet which he believed was unconscionable given the sacrifice of other parties from unionized workers to American and Canadian taxpayers and others.

He's right.

His hedge-fund bashing plays well in the standing-room-only section, but will not matter a darn when it comes to Chapter 11 bankruptcy. Obama is a lawyer first and foremost, and he knows as well as anyone that these "speculators" may get more than others wanted to give them before a bankruptcy court judge. After all, they do have rights to not sell if they choose to. Their argument is that they bought Chrysler's debt which was not subordinate.

Best guess is that the judge will chop their wishes significantly, but they may still end up ahead of the game -- something that the unions, Obama's government and the public could not stomach.

What I found most interesting about this press conference today was that Obama talked tough then walked away without taking any questions. No Mr. Nice Guy. No cajolling. It's all before the courts and that's the way it should be because he, as a lawyer, knows that's the only solution with "spoilers" and the court judgment will also let his Auto Task Force completely off the hook (if the speculators prosper) because it was a matter decided by the rule of law.

Also interesting, however, was the fact that General Motors' has been given a backdoor position in Chrysler as its financial arm through GMAC. Chrysler's counterpart is so badly under water that it won't be revived, said the President, but GM -- given more time to come up with its plan -- emerges as a new stakeholder without putting up a dime.

So here's what is next:

-- Chrysler's hedge funds will make money on the deal because the courts will award something.

-- Fiat will pull off the biggest coup among carmakers anywhere because it will have instant entry into the world's biggest car market without risking capital because Chrysler's governmental backstop makes it a "treasury" quality bet.

-- The UAW and CAW will merge because they should.

-- Autoworkers will finally become capitalists.

-- And GM will eventually take out Fiat or merge with it too.

But stay tuned.

See Diane Francis' blog