CIT trading halted – either it is because they will file for bankruptcy, or the Feds will announce a loan beyond the $2.3 billion we already gave CIT back in December. Do you feel lucky?
WSJ is reporting there has been a “run” on CIT to the tune of about $800 million with people pulling their investments out. CIT provides financing to almost 1 million small and medium sized businesses. With a few billoin dollars and another conversion of debt to equity, Tim Geithner could “take control” of a million businesses on the basis that they received benefits from a TARP recipient – at a minimum, the government would get the power to decide who gets future loans and on what terms.
On a related note, Congress is working to pass a law to force GM and Chrysler to reopen their closed dealerships. President Obma strongly opposes bringing the employees of those dealerships back to work. I wonder why.
CNN [Actually Fortune Magazine] is reporting that CIT is saying the government has said “No”, which means bankruptcy is getting very likely. Look for Goldman Sachs to show up somewhere in this story soon.
CNBC, which of course if owned by GE, which owns GE Capital is reporting that CIT will file chapter 11 on Friday. GE Capital is the obvious choice to swoop in and take over the company’s factoring business. (factoring is loaning money to a business buying up their accounts receivable at a discount)
GE Capital is of course the largest recipient to date of Time Geither’s TARP money and guarantees.
My biggest question – MSNBC’s Keith Obermann (MSNBC also owned by GE)… was he in on this plan all along setting up GE Capital and Goldman Sachs’ takeover of the government and the economy, or will he wake up some day and say “OMG, what did I do and take the appropriate action?”
Life Insurance companies are who is going to get hit hard if CIT goes under. Several of them are themselves on shaky ground. Did I suggest recently not to invest money in annuities with an insurance company?