CIT Group preparing for possible bankruptcy

WSJ: CIT Group, a lender to almost a million mostly small and midsize businesses, is preparing for a possible bankruptcy filing.
39 minutes ago from BNO Headquarters

CIT Group Inc., a lender to almost a million mostly small and midsize businesses across the country, is preparing for a possible bankruptcy filing after so far failing to win a government guarantee to help it borrow, said people familiar with the matter.

To prepare for a possible filing, CIT has retained the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, which has a prominent bankruptcy practice, these people said.

The mere hiring of bankruptcy counsel doesn't mean a company will actually make a bankruptcy filing. CIT has been pressing its case "with increased urgency to the government," ...

online.wsj.com...

Ouch.

Another one bites the dust?


[edit on 10-7-2009 by Kingfanpaul]

CIT will cause a systemic failure in the job market if they go bankrupt. As well as drive down tax receipts as a result forcing state and local government to go further into the red. This will increase deficits at a widespread level and force a state by state downgrade of credit ratings.

Looks like unemployment and a second large stimulus will occur that will include "Help" to the states in debt guarantees and direct loans. This will force the Feds rating down. And then inflation hits.

[edit on 11-7-2009 by projectvxn]

Is this Citi Group the bank or a totally different entity?

reply to post by jhill76


post deleted

[edit on 11-7-2009 by projectvxn]

There is a lot of talk all the sudden about a small business bailout the past few weeks from what I have been hearing.

This has been accounted for and priced into the markets IMO already.

But yes, there could be some problems there (if there isn't a 1000 problems already)

Just for clarification ...

They're talking about CIT Group not citigroup.

reply to post by GreenBicMan


The loss of CIT as an institution has indeed been priced into the market..Just not out loud where anyone can get a warning. But the ripples from the loss of their lending services will have further unaccounted for effects.

Any bailout to small business will result in the same pseudo-nationalization of small business models and ideas. IMO.

(edit)Thanks I thought I saw CIT, but wrote CITI. Either way, with these numbers, the effects will be enormous if it turns out they are going under.

[edit on 11-7-2009 by projectvxn]

[edit on 11-7-2009 by projectvxn]

reply to post by projectvxn


CITI? (symbol C?)

You are incorrect


Citi collapse has NOT been priced into the markets.

Infact I expect them to have quite a good quater based on what I have been hearing about their automated trading programs lately.

reply to post by GreenBicMan


Sorry I misread a bunch of crap and mistyped.

ok saw your typo -

insurers have been having a pretty big rollercoaster run as of the past few weeks.. so I am guessing big money is getting in and getting out leading into anticipation of something..

either way.. i am guessing we see another bailout/stim sometime soon.. the markets are calling for it, and they get what they want usually

reply to post by GreenBicMan


I'm not sure the markets are calling for it. Unless they want to lose their gains to future inflation. We have to stop this crap now.

reply to post by projectvxn


Let the big players get what they want on the short term.

It is hard to see now, but what is good for the goose is good for the gander. We are the gander 6-18 months down the line.

IMO deflation is the much bigger play right now to deal with.. remember we had how many trillions of dollars instantly evaporate... it will take a while to even put that many 0's back on the cpu's..

We are living in exponential times, and 1 trillion dollars today was 10 year's ago billion...

Of course, I am sure you know all this.. as gold has been falling and couldnt break 1000 the play on inflation is long over IMO and was something brought up to fill news..

As I said, this of course is all IMO

reply to post by GreenBicMan


The only thing that evaporated was overleveraged debt. That cost trillions of theoretical dollars that didn't actually exist. It was credit out of nothing, and much of it was fraud. And it is continuing to evaporate and Quantitative Easing is trying to fill the gap with the printer rather than letting the market reach equilibrium.

[edit on 11-7-2009 by projectvxn]

reply to post by projectvxn


Tell that to the accounts that I have seen lose hundreds of thousands of dollars over the past 365 days.

The money lost was not only in "wall st." but every player with a hand in the markets, even people with your average lowly 401k

reply to post by GreenBicMan


I agree, but these were packaged and traded hundreds of times over. The value of those 401ks was based on speculated values, a good chunk of which was, in my opinion, fraudulent. It's not that I have no sympathy for the losses, I do, but they are the consequence of wide spread fraud. And the key players, like Goldman Sachs, CITI Group, AIG, B of A, and others are profiting immensely from this. At least the individuals are. They may see it fit to sink these corporations as they run away laughing all the way to the bank with those retirement accounts they used to artificially inflate the market and pocket the difference.

[edit on 11-7-2009 by projectvxn]

[edit on 11-7-2009 by projectvxn]

reply to post by projectvxn


Well, don't be so sure they are all running away.

You have to remember, what has done well during the crash?

Bonds..Options of course if you were on the right side.. if not you lost everything you had in 20 minutes lol

People that worked at AIG, lets just say as VP.. prob had a lot of their ret. into that.. well that equals almost 0 dollars right now split adjusted

So while there were maybe in reality a handful running off to the bank laughing, as they would anyways because of their illiquid investments such as equip leasing or gas and oil dpp's which will always make accredited investors cash, there were the VAST MAJORITY that got hurt as well.

While I have 0 sympathy for anyone at anytime, because there is an adherent risk in the marketplace, I have lost every last dollar in the market that I had invested during the .com crash on a RETARDED bet. And a total bet is all it was. Most people dont realize this.

Over the past 100 years what companies are still around besides bell labs (ATT) and IBM and GE?

None.

So your avg. retail investor of course is best suited with something like SPY (which we now see can be risky too) or best of course in Variable Annuity - high for life - something like that.

This post was in no way advice.

reply to post by GreenBicMan


I like your positive approach to this. But there are many political factors at play as well that may force rapid downward pressure on the markets. i.e. California. Further stimulus would cause further downgrades in credit, as it has to be borrowed. This will force borrowing costs up and if we aren't totally reeling from devastating unemployment, savers will be punished to death by the inflation this will cause.

This is of course, if they start backstopping state debt. Which is a very real possibility.

[edit on 11-7-2009 by projectvxn]

reply to post by projectvxn


There are going to be good buys in municipal bonds very soon if they drop.

In reality, everyone knows california is not just going to drop off the map, unless that EQ hits of course..

This is a political tug of war with the lights still on in cali as far as I know along with them parading around MJ...

They will get bailed out in some form, but in time the markets all over will return to an equilibrium and we will move higher.

The economy lags so whenever we see the bull run again (which I think either could be very soon or 1 q next year) give it 6-18 months on "main st".

At the same time I dont remember too many people squawking when we broke 10,000 on the dow in early 2000's and went on a massive run.

The greatest investors of our time have bought low and sold high. I think I missed my chance in my generation even though I wanted to pull the trigger at dow 7200.. no capital of course lol

We may never print that number again, but we may not see 14,000 either for some time to come as well..

reply to post by Kingfanpaul


I will call your one large bank and raise you 247 small to mid size ones.

247 banks hit the RED ZONE

Once the domino effect of interdependency gets rolling it is going
to start dragging down the ones in the yellow zone as well.

We got ppl over at marketwatch letting us know that US foreign
embassies are being told to horde one years worth of the local
foreign currency due to a possible long term banking shutdown
here in the US.

Embassies told to horde foreign currency for long term banking shutdown

Prepare accordingly !

Good Luck to you all !

reply to post by GreenBicMan

Some trouble for the bond market is on the horizon,
or so it would seem.

$134 biillion in US bearer bonds were real ???

If this is true this could cause a run on the bond market, and trigger
the bank failures I mentioned in the other post, and start a cascading
systemic failure.

Let us hope that they tell us who the two men truly are.

Let us hope they clear this up fully in short order before fear
takes the short road to a hellish ride.