It doesn’t look good for CIT. They cannot get a bailout and the interesting thing to watch for is how much damage this bankruptcy will cause downstream.
Talks with regulators have broken off and “there is no appreciable likelihood of additional government support,” the New York-based firm said yesterday in a statement. CIT, once the biggest independent commercial lender, may seek court protection if no U.S. aid emerges, Standard & Poor’s said this week. The company said it is “evaluating alternatives.”
CIT Chief Executive Officer Jeffrey Peek failed to convince regulators that fallout from a collapse would threaten the rest of the financial system. Officials at the Treasury, Federal Reserve and Federal Deposit Insurance Corp. have resisted putting more taxpayer funds at risk, on top of the $2.33 billion granted to CIT in December, to keep the lender afloat.
“Maybe they can put together a last-minute deal and try to sell themselves,” said Adam Steer, an analyst with CreditSights Inc. “The most viable alternative once the government decides to not step in is a trip into bankruptcy.”
Of course, stocks will be higher!
This article from Eric Sprott is worth reading; he informs us that government Insanity and Foolishness … are not only contagious but will be self- defeating. Too much debt! Budgets running amok! Nobody with the cash to lend to the government!s
i can’t do it, don’t look @ me!