Posted on 07/16/2009 6:59:10 AM PDT by rabscuttle385
The survival of one of the nation’s largest commercial lenders, the CIT Group, was thrown into doubt late Wednesday after federal officials rebuffed pleas to rescue the struggling company a second time.
Unless a buyer emerges for CIT — a prospect that seems unlikely — the century-old lender could founder, even after it received a $2.33 billion taxpayer-financed bailout in December.
The plight of CIT, which provides loans to about a million small and midsize companies, particularly in the sagging retail sector, poses a crucial test of the Obama administration’s attempts to stabilize the nation’s financial industry.
(Excerpt) Read more at nytimes.com ...
Proly all of it.
ONLY THE (mafia style) CONNECTED SURVIVE
Goldman Sachs and the other giants never have aproblem getting bailed out
For all intents and purposes, Goldman Sachs IS the modern Mafia.
“The plight of CIT, which provides loans to about a million small and midsize companies”
This failure will REALLY help the economy.
Ooops! I stand corrected on CIT vs. C.
So I just looked up stress test results and I don’t see anywhere that CIT even participated in the stress tests.
Maybe that’s because they are primarily a commercial lender?
I recall a couple of months ago predictions by a couple of market gurus and billionaire investors that commercial real estate collapse would be the second leg down of the recession.
Does the collapse of CIT represent the first casualty of this second leg down?
Wall street doesn’t seem to even notice today, stocks are flat. But I have seem time lags before after what seemed to be obvious signals that should have tanked the market.
I’m putting on some put options today while they’re still cheap.
This year’s Lehman Brothers.
Goldman Sachs was/is doing the buying and selling for the PPT Plunge Protection Team for years. This was/is the rumor. They operated at the behest of the Federal Reserve
What’s good for Goldman Sachs is good for America. ;>
I think this precedes (or parallels) the commercial real estate collapse, which is effected by businesses folding and therefore not paying rent to the (over)developed shopping malls, strip malls, business parks, office buildings, etc. I don't think those larger real estate developments were CITs bread and butter, but I could be wrong.
I’ve heard the same.
True enough but as you point out business loan failures are a precursor to commercial real estate losing tenants and then cascading into failure. CIT could be the first shoe to drop in this second big spike down. A whole different kind of bank will fail, more trillions in bailouts, unemployment accelerating back to levels seen in january.
Wouldn't it be nice if Michael Steele and that merry band of idiots at the GOP could point this out to the American people?
Instead of watching Lindsey Grahm faun all over Sotomeyer we should be watching our GOP clowns screaming from the rooftops and blaming the Majority Democrats for everything under the sun... Nope. Ain't going to happen because the GOP is brain dead...
Wouldn't it be nice if Michael Steele and that merry band of idiots at the GOP could point this out to the American people?
Instead of watching Lindsey Grahm faun all over Sotomeyer we should be watching our GOP clowns screaming from the rooftops and blaming the Majority Democrats for everything under the sun... Nope. Ain't going to happen because the GOP is brain dead...
Is is probably more sensitive to this downturn than a pure commercial real estate lender would be. The assets it can repossess are things like retail inventories from small shops and brake presses and milling machines from light industry. I would imagine thee type of things would go for pennies on the dollar at auction. Relatively speaking, a 50% drop in real estate prices would have less impact on its balance sheet than a 90% drop in the price of these other assets.
The question for me is the timing. How far away is this commercial real estate collapse - weeks or months?.
If the GOP had any brains it would be viral already.
It is very well done PSS. Would you mind posting it again for this thread?
It is the sort of graph that you could work with for any number of ill-effects Democratic Congresses cause.It deserves its own thread, really.
No, the GOP isn't brain dead. Brain dead would be a GOP that did nothing but decompose and stick up the place.
The GOP is taking an active role in selling us down the river, they are part of the problem. Although not as parasitical and evil as the Democratic party - the GOP is merely a bunch of back-stabbing, get whatever they can steal without being caught weasels. These people do not care about the Constitution, the people, nor the country. If one did, certainly there would be an investigation into the legitimacy of Obama's birth certificate. Would the Democrats hesistate to demand this proof if the roles were reversed? The GOP is gutless, cowardly and corrupt.
Tom Clancy had the correct solution in his book "Debt of Honor". The corruption is so utterly commonplace that it is not only acceptable, it's expected. Simply stated, there is no room in DC for an honorable man.
Respecting CIT... I’d rather owe them money (and be current on the debt) than be owed money by them. I assume they have syndicated a majority of these small business loans and that means stupid Swiss bankers have them in their vaults because they drank the CDO kool Aide. More defaults. More closed businesses. Leverage is BAD. My grandfather once told me: “Run your business on retained earnings or someday the banks will shut you down.” Smart guy, he was... (Editorial note: I use Swiss bankers as a metaphor for banks that didn’t do their homework. My Swiss cousins, of all people on Earth, should have known better...)
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