Thursday, July 16, 2009

One of the biggest lenders to American businesses (CIT) could go bust

This 'unknown' big bank could now go bust - making the US recession worse

CIT, One of America's biggest lenders, may go bust. If it does, it would be the fourth-biggest bankruptcy in US history. That would deepen America's recession - and hit the UK too

Posted by damien @ 01:14 PM (1530 views)
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9 thoughts on “One of the biggest lenders to American businesses (CIT) could go bust

  • This bank should be allowed to fail. It lends to US retailers and small businesses that deal with the consumer. The American public is spending less and will continue to do so. It therefore makes sense to shrink the retail sector and to shrink the banking sector that supplies it. What is the point of propping up a bank whose business model belongs to an era of ever-growing consumer spending? It’ll swallow up the money and need it again and again

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  • It’ll swallow up the money and need it again and again

    Making it the perfect candidate for a bailout.

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  • very true fubar. But really they need an executive in Mr Paulsons position to make that happen.

    Like GS did.

    Very bad planning on CITs part if you ask me.

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  • Reuters – latest – “Bailout talks with Govt failed”.

    “CIT’s problems mushroomed two years ago in the wake of Chief Executive Jeffrey Peek’s decision earlier this decade to expand into subprime mortgages and student loans, both potentially highly profitable but fraught with added risk. Peek’s status at CIT remains uncertain. The company was not available for further immediate comment. CIT sought new help even after winning bank holding company status in December so it could draw $2.33 billion of taxpayer money from the government’s Troubled Asset Relief Program”.

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  • General Congreve says:

    BAILOUT!!! BAILOUT!!! BAILOUT!!!

    Come on US treasury, print and bailout, I want to see the dollar wrecked good and proper, so my gold investment really pays out big.

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  • General..I don’t understand your logic there. Surely you would just be exchanging your gold investment for a larger quantity of dollars – but if the dollar was ‘wrecked good and proper’ they would worth less, so where’s the gain? You might just as well leave your cash in any currency that you think will hold it’s own, cop some interest on it, and then simply exchange the cash for even more dollars if they are wrecked.

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  • Didn’t CIT pass the ‘stress test’ a couple of months ago?

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  • CIT failed their “stress test” on July 14th 2009.

    They failed as a result of being “too small to survive” i.e. their demise will not cause a further systemic failure of the financial system.

    Make of that what you will. Oh and by the way; Nice one flashman, you seem to have the situation well evaluated. Not.

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  • Gold will be imminently more useful for barter when paper money is finally reduced to toilet paper. Likewise silver. Probably coins and coloured beads too.

    Unless, maybe like flashman, you prefer the option to “manage” your financial matters by way of an RFID chip.

    These are the options. I’m not with flashman.

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