CIT Group Inc's bankruptcy filing, while long expected, could still trigger a financing crunch for many of the hundreds of thousands of small businesses it finances. CIT filed for bankruptcy protection on Sunday, and said its creditors have already approved the century-old commercial lender's reorganization plan.
But the company's long-term prospects are uncertain and the bankruptcy could leave more than one million small and medium-sized businesses looking for another source of funding, lawyers said.
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brettdoyle said:Take more of my paycheck and do a Government bailout please. This company made stupid decisions so we definitely need to keep them operating.
Nevermind... the money has already been flushed down the toilet.
One loser from a bankruptcy would be the U.S. Treasury. Late last year it injected $2.3 billion of funds from the Troubled Asset Relief Program ... The government investment is likely to be wiped out ...
Message edited by: brettdoyle on 2009-11-01 18:07:16 CST
Everyone knew that CIT was going to file for bankruptcy. Just like Fannie and Freddie will eventually file for bankruptcy. Rightly or wrongly, the government spent the money to make sure that all of these bankruptcies were done in an orderly manner. Was it worth it? Who knows. Was the government successful in adverting complete and total chaos in the financial system? It seems like it.
Go short FNM or FRE. It's the same thing. Or AIG. The problem is that you could get caught in a short squeeze and forced to cover before they go to 0. All of 3 of those will go to 0... the question is how long and whether you get a pop between now and then.
This is why most retail investors lose money. Futures are up, significantly. No one cares about CIT group filing for bankruptcy except all of those morons who were buying CIT common and the bondholders. Everyone knew CIT was going to 0... just like FNM, FRE, AIG, etc.
As for GM, the common went to 0 when it went bankrupt. That's generally how it works.
kantscholar said:comptalk said:Damn. Shoulda shorted on Friday.
This is why most retail investors lose money. Futures are up, significantly. No one cares about CIT group filing for bankruptcy except all of those morons who were buying CIT common and the bondholders. Everyone knew CIT was going to 0... just like FNM, FRE, AIG, etc.
As for GM, the common went to 0 when it went bankrupt. That's generally how it works.Maybe it was up more earlier, but I am looking at S&P500 only up 5 points. More importantly, in the stock markets that are open for trading now, Neikei, Hangseng and Shanghai, indexes are showing heavy losses. But they could be just the catching up with the US market's move on Friday. So if the futures don't go down further, you seem to be correct in saying the CIT bankruptcy was "priced in".
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