CIT Preparing to Seek Chapter 11 Bankruptcy & Don't Panic! 2 Days Until Collapse?

peaceandlove · 11-01-2009, 10:05 PM

CIT preparing to seek Chapter 11 bankruptcy protection as early as Sunday

Filing could wipe out U.S. stake and have broad ripple effect

By Tomoeh Murakami Tse
Washington Post Staff Writer
Saturday, October 31, 2009

NEW YORK -- CIT Group, a major lender to small businesses, is preparing to file for Chapter 11 bankruptcy protection as early as this weekend, sources familiar with the matter said Friday, which would likely wipe out the federal government's $2.3 billion stake in the company.

A CIT bankruptcy filing would be one of the largest in U.S. history, with potentially broad ripple effects. The firm provides loans to about 1 million companies, including many already struggling in the economic downturn.

Continues: http://www.washingtonpost.com/wp-dyn...d=sec-business

Don't Panic! 2 Days Until collapse?

Nov 1, 2009 - recorded 17:00 GMT

Fever I AM Commentary

Swine Flu first and then CIT information.

Youtube Channel: http://www.youtube.com/user/FeverIAm

VIDEO (10:17):

peaceandlove · 11-01-2009, 10:39 PM

CIT BOOM BOOM!

Sunday, November 1. 2009
Posted by Karl Denninger

Hope you didn't buy any CIT on the hope of a bailout! http://www.bloomberg.com/apps/news?p...yTH2eLwY&pos=1

Nov. 1 (Bloomberg) -- CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy with financing from investor Carl Icahn after the credit crunch dried up its funding and a U.S. bailout failed.

The practical impact of this is likely to be:

Their factoring business is unlikely to be significantly impacted. This is a very profitable line of work, and while I have often (and still do) argue that any business using it is certifiably insane, it should continue.

Their "general" lending, however, is almost certain to be severely curtailed. I have seen estimates that it could fall by as much as 90%, and that seems reasonable to me.

For many small businesses the latter could be particularly acute. I would also expect the margins on their factoring business to be adjusted (better for them, worse for retailers) which could put a further squeeze on their small and mid-sized business clientele.

This will leave a mark - we'll have to see how bad it gets for retailers in the coming weeks and months, but being right in front of the holidays it cannot be a welcome development.

SOURCE: http://market-ticker.denninger.net/a...OOM-BOOM!.html

11-01-2009, 10:05 PM	#1
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	CIT Preparing to Seek Chapter 11 Bankruptcy & Don't Panic! 2 Days Until Collapse? CIT preparing to seek Chapter 11 bankruptcy protection as early as Sunday Filing could wipe out U.S. stake and have broad ripple effect By Tomoeh Murakami Tse Washington Post Staff Writer Saturday, October 31, 2009 NEW YORK -- CIT Group, a major lender to small businesses, is preparing to file for Chapter 11 bankruptcy protection as early as this weekend, sources familiar with the matter said Friday, which would likely wipe out the federal government's $2.3 billion stake in the company. A CIT bankruptcy filing would be one of the largest in U.S. history, with potentially broad ripple effects. The firm provides loans to about 1 million companies, including many already struggling in the economic downturn. Continues: http://www.washingtonpost.com/wp-dyn...d=sec-business Don't Panic! 2 Days Until collapse? Nov 1, 2009 - recorded 17:00 GMT Fever I AM Commentary Swine Flu first and then CIT information. Youtube Channel: http://www.youtube.com/user/FeverIAm VIDEO (10:17): Last edited by peaceandlove; 11-02-2009 at 06:21 PM.

11-01-2009, 10:39 PM	#2
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Re: CIT Preparing to Seek Chapter 11 Bankruptcy & Don't Panic! 2 Days Until Collapse? CIT BOOM BOOM! Sunday, November 1. 2009 Posted by Karl Denninger Hope you didn't buy any CIT on the hope of a bailout! http://www.bloomberg.com/apps/news?p...yTH2eLwY&pos=1 Nov. 1 (Bloomberg) -- CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy with financing from investor Carl Icahn after the credit crunch dried up its funding and a U.S. bailout failed. The practical impact of this is likely to be: Their factoring business is unlikely to be significantly impacted. This is a very profitable line of work, and while I have often (and still do) argue that any business using it is certifiably insane, it should continue. Their "general" lending, however, is almost certain to be severely curtailed. I have seen estimates that it could fall by as much as 90%, and that seems reasonable to me. For many small businesses the latter could be particularly acute. I would also expect the margins on their factoring business to be adjusted (better for them, worse for retailers) which could put a further squeeze on their small and mid-sized business clientele. This will leave a mark - we'll have to see how bad it gets for retailers in the coming weeks and months, but being right in front of the holidays it cannot be a welcome development. SOURCE: http://market-ticker.denninger.net/a...OOM-BOOM!.html Last edited by peaceandlove; 11-01-2009 at 10:43 PM.