Posted on 07/13/2009 8:34:27 AM PDT by Kartographer
Officials at CIT Group, a lender to small and midsize businesses, tried to work out a plan to calm markets and convince customers and investors that it can work its way out of a liquidity crunch amid a concern that hundreds of small and midsize business customers may rush to withdraw funds or draw down credit lines. CIT officials met over the weekend with members of Congress, government officials and regulators.
(Excerpt) Read more at blogs.wsj.com ...
They will get it they were the top donors to the abomanations inaugeration
http://www.newsmax.com/insidecover/citibank_obama_donors/2009/01/15/171703.html
CIT group (symbol: CIT) is not Citibank (symbol: C)
They might get a bailout, but they’ve been burning their bridges with customers all spring long.
If they don’t go BK, they’re going to be on life support for a very long time, because once a small business has their credit yanked, they go somewhere else or go out of business. Either way, their business won’t be coming back to CIT anytime soon, if ever.
I have reports from farmers and ranchers of CIT freezing or closing accounts, even if they were paid timely and up to date. Simply to reduce their exposure. Many think of it as “OK, fine, see ya, don’t let the gate hit you where the Good Lord split you...”
Overall, CIT ran a very stupid business model.
Junk bond credits cannot be finance companies - because the money costs them too much to lend - meaning they could only lend to very questionable credits to make money. Death spiral, either they are bought and their ratings go up and borrowing costs drop or Uncle Sugar backs them up. Else, sell everything.
Goldman has $3BN outstanding so you might have to bet on the government bailing them out.
no bail out for them, they lend to the smaller business and not to the big boy insiders.
Remember Obama only bails out wall street, Obama has no interest in main street.
Looks like their toast today.
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