Marci Wheeler has a post at Michigan Liberal citing a Wall Street Journal article (subscription only) that discusses how JP Morgan has refused to offer the same kind of debt swaps to Chrysler to help them survive that Morgan has received from the federal government. And JP Morgan is not alone. From the WSJ article:
 

Banks that loaned Chrysler LLC $6.8 billion are resisting government pressure to swap more than $5 billion of that for stock to slash the car maker’s debt, according to people familiar with the matter, hindering Chrysler’s effort to restructure outside of bankruptcy court…

The lenders, which include J.P. Morgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley, hold great influence in moving the process along. As holders of secured debt, they have the right to take control of Chrysler plants, brands and other assets, which were pledged as collateral for the loans, if the company files for bankruptcy protection.

And Wheeler says:

JP Morgan has been the recipient of bailout love in many forms: direct receipt of TARP funds, the Fed’s honoring of huge loans JP Morgan made, AIG counter-party funds, and low-risk sweet-heart deals for JP Morgan to “rescue” other banksters-for a total of somewhere between $27 billion and $300 billion. And of course, JP Morgan has already been using its TARP funds for acquisitions, not loans.

But it is unwilling to take a haircut on loans of $2.5 billion that represent a miniscule percentage of all the welfare it has gotten from the Federal government.

That haircut would take the form of swapping debt for stock, which is exactly the form of bailout that the government has given to those banks. The federal government has given those financial firms hundreds of billions of dollars in loans with stock as collateral, loans that have kept them alive. Yet they are unwilling to provide the same benefit for Chrysler. I’d say it’s time for President Obama to wield that stick he’s been using so publicly against the auto companies and turn it on the Wall Street banks as well.