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?.
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...)