CIT: How many more bailouts to come?
Filed under: Company News
Update: CIT shares were halted Wednesday. A source says that U.S. officials are concerned that CIT's woes have deteriorated further which could possibly land the company in bankruptcy. A decision is expected within 24 hours.
CIT Group Inc. (CIT) is close to getting a set of short-term loans to tide it through a liquidity crisis.
The Wall Street Journal, which broke the story about the financial firm's instability, reports that customers worried about the company drew down hundreds of millions of dollars on credit lines. The paper reports that the firm may be allowed to transfer some assets from the parent to financial divisions so that "the Federal Reserve would let CIT pledge some of those assets at its discount window and the company would take steps to refinance some of its existing debt."
There are a number of financial institutions that have not gone to the government, yet. These may include credit unions and the credit card units of large retailers who are being hit by defaults that will almost certainly rise.
It might have seemed like the Treasury and Fed had put their bailout days behind them and that enough money had been put into the market to give it adequate liquidity. That probably is not true. The CIT problems arrived out of the blue. Consumer credit, business lending, and commercial real estate are still troubled enough that the government could need to supply capital to financial firms for months.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 7)
7-15-2009 @ 7:12AM
Steve said...
This is absurd again to see!
Let CIT go through normal BK like any other business, as already the taxpayers' TARP funds given did no good but assured high paid CEO's and execs their bonuses while the rest of the country goes deeper into debt.
NO MORE bailing anyone else out!
STOP this madness Mr. Obama before you ruin this nation and make it a 3rd world country.
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7-15-2009 @ 10:07AM
Redman said...
More to come until the US is sold out to other countries.
7-15-2009 @ 11:33AM
Beelzgebob said...
Too late your NeoNazi Republicon Bush has already done that!
7-15-2009 @ 12:08PM
IAN said...
could not agree more
7-15-2009 @ 12:45PM
TWA said...
I hate to say it Steve, but we are already well on our way to becoming a 3rd world country.
7-15-2009 @ 1:10PM
Mike said...
Stop complaining Obama knows what he's doing. You have to quit listening to the Republican ranting. They want to keep every thing the same so all there rich buddies get richer.
7-15-2009 @ 2:13PM
Cliff said...
The U.S. is broke. We're being set up for a new world order. The Gov. wants to distress this nation so they can declare martial law. That will give them control over everything. You can bet the U.N. is involved in this also. It seems that the Pope also wants a world order, "there is urgent need of a true world political authority". Obama seems to be way to relaxed. He sure doesn't seem to to concerned about us. All these trips to these world leaders, who knows what else they're talking about. Decreasing the population also comes with a NWO. Take a look at these videos.
http://New-World-Order.itrustgodonly.com -
http://death-camps.itrustgodonly.com/The-Obama-Deception/
7-15-2009 @ 7:43AM
iclampett@aol.com said...
Looks like we have an African American Bush as president
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7-15-2009 @ 7:53AM
Bob said...
Your tax dollars at work. Welfare for the rich and arrogant.
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7-15-2009 @ 8:22AM
Ralph Kranchick said...
Why not? We bailed everyone else out. I, like others are struggling paycheck-to-paycheck...literally, and we are bailing out these failing inept companies.
With the IRS threatening a levy for $7,000.00, with added interest and added penalties, at least I know that my blood money is going to people/corporations that are keeping this economy going.
NOT!!
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7-15-2009 @ 8:38AM
Paul said...
If you are wondering where the " Bailout money " is going, you will see it today on Wall street. This is just another day of this Government wasting Everyones Money on Dead Companies and Banks. It is the Government Buying Most of the Stocks in the last 5 Months. Yes, they said they would. Now they are. No Sane Investor that I know of will. I urge Everyone to Call your Congress and Demand they Stop Wasting Your Money or Lose their Jobs in 2010. As a Direct result of these Government " Bailouts " Here is the Future Problem that Will Hit Us All by end of Year ; These so called " Bailout " and " Stimulus " Packages will produce only Minimal results and will Not work as planned. But, it is Going to Raise both Income and Property Taxes by up to 42 Percent across the Pay Scale by end of next year. You Might get a break This year But, Beware of the 2010 Surprise. Those who are below the Tax bracket will find they Too Will Be Taxed. Despite what they tell you on TV, that is the Word. The 2010 Newyear Surprize. Insurance Rates are also set to rise Big as well as inflation in Food, Energy and Healthcare. The Dollar Will Become Worthless. Yes, Oil Will Rise Again. All of this Has to happen for this Worthless Playmoney Injection to have any value at All. With the Money their spending on Bailouts, the Government Cannot Afford to Lower Taxes. Just do the Math
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7-15-2009 @ 11:27AM
ettucat said...
Go to ____resistnet.com__ or __freedomsfirst.org__ and sign up for the march on Wash DC on 9/12/09. Let the "elite" in the Federal government, who never had to walk a day in our shoes and therefore cannot relate to our issues, know that we are fed up with their power grab and indifference to the wishes of the American people. Walk there, drive there, take the group transportation options listed on resistnet.com, or fly there.....JUST BE THERE on 9/12 and voice your objections. United we stand, folks, and this is a small sacrifice to make when you consider the big sacrifices if Obama is allowed to push his government takeover agenda through.
7-15-2009 @ 12:54PM
Dennis said...
The only time they even pretend to listen to American citizens is election time.
7-15-2009 @ 8:47AM
bob said...
obama is an ignorant sob pig
Reply
7-15-2009 @ 8:48AM
DICK VADER said...
WHO DO YOU THINK OWNS THESE COMPANIES THAT ARE GETTING THESE BAILOUTS ??? HMMMMMM??? F-U-CKING REPUBLICANS....ALL CARD CARRYING AND "NEVER MISS A CHANCE TO VOTE GOP... CONSERVATIVE, NEOCON, REPUBLICANS !! EVERY LAST ONE OF THEM....NOT A DEMOCRAT(LIB) IN THE BUNCH !!! THESE ARE BUSH'S BUDDIES...AND LITTLE BOY AWOL AND BIG DADDY VADER AIN'T DONE DESTROYING YOU YET !!! YEAH...IT'S OBAMA'S FAULT....JUST HOW STUPID ARE YOU MORONS ???
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7-15-2009 @ 9:31AM
Gabe said...
Really? I love the internet. Where every uneducated and uninformed moron on the planet can go post nonsense in all caps. Keep ranting whack job. People like you are always good for a chuckle.
7-15-2009 @ 10:12AM
Redman said...
That was really ignorant. The same businesses that support one side support the other. CITI is one of Obama's biggest contributors. Wake up like the rest of us. VOTE ALL the incumbent bastards out in 2010.
7-15-2009 @ 10:56AM
Shannon said...
Well then I guess that makes Obama an ignorant puppet or maybe HE is in the pocket of the SAME people Bush was??? How's your Savior workin out huh??? WAKE up you moron. This country has ALWAYS been controlled by WHITE RICH people and will ALWAYS be controlled by WHITE rich people. Obama is a PUPPET!! As long as he gets HIS he could care LESS about the little people When his usefullness is no longer in evidence "They" will throw him under the bus. But no problem... that Arrrogant lyin SOB will be set for life.
7-15-2009 @ 11:13AM
kay said...
George Sorrose is a Republican? You have to be kidding me. He's making sure to get plenty of good from all this mess. In fact, I'm pretty sure he's one of the main authors of most of the bills if you dig deep enough. The Republicans are not the ones doing the spending. You can't get away from the fact that the Dems are doing it, and I guarantee you, they wouldn't be giving money to the Republicans - no how - no way!
7-15-2009 @ 12:54PM
Dennis said...
Yeah right,repubs like Al gore?