Why Not Bail Out CIT? Some Lessons Learned
(AP Photo/Bebeto Matthews)
No longer. The federal government has rebuffed pleas from CIT Group, which lends to small and midsized companies, for more bailout cash.
The result has been a scramble for dollars on the part of CIT's clients and reports of a possible bankruptcy filing as early as Friday. CIT recently hired the Skadden Arps law firm, which is known for its work on mergers and bankruptcies.
CIT already received $2.33 billion in tax dollars as part of a bailout in December. It's not clear if that money will ever be repaid. (Meanwhile, CIT shares fell 75 percent on Thursday.)
While few people would call CIT too big to fail, the Obama administration was facing some pressure to write another ten- or eleven-figure bailout check. The National Retail Federation asked the White House for a CIT bailout, saying it lends to retailers, and "the retail industry is too important to the economy to be placed under additional stress."
One of CIT's problems is timing. After the embarrassment that the AIG bailout caused Washington, including last month's report of still more bonuses, the nation's capital may be experiencing a mild case of bailout fatigue.
Another may be -- and we'll probably never know for sure -- that CIT CEO Jeffrey Peek likes to give money to Republican politicians instead of Democrats. (When you have a politicized financial system, as we now do, it's at least a question worth raising.)
The downside of the CIT non-bailout? The post-Lehman, post-AIG lesson to companies is simple: become too big to fail. Look for more mergers and consolidation as a result. After all, if Lehman and CIT had merged, as had been contemplated in 2002, this story likely would have a very different ending today.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
http://www.campaignforliberty.com/campaigns/hr1207home.php
Since its inception in 1913, the Federal Reserve has helped to devalue our dollar by 95%. During the recent economic crisis, it has poured trillions of dollars into the economy with no oversight, made secret agreements with foreign banks and governments, and has refused to tell Congress who is getting the money or to give it the details of what deals are being made.
HR 1207 & HR 2424 Bills to "Audit the Federal Reserve ," and S 604, its Senate companion, will demand full transparency from the Federal Reserve for the first time in history by removing all restrictions from Government Accountability Office (GAO) audits of the Fed and mandating an audit by the end of 2010.
Help turn up the heat on Congress. Your petitions, e-mails, letters and phone calls have already made a huge impact, but more of your help is needed right away. Please take a few moments to tell your Congressman to support HR 1207, HR 2424 and urge your Senators to cosponsor S 604. Our tools below make it quick and easy to make a difference today!
There are already 271 Cosponsors for HR 1207, 5 for HR 2424 and
13 cosponsors for S. 604!
You can view the list here, or begin your efforts by signing our online petition. A treasure trove of information. Sign the Petition Today.
http://www.campaignforliberty.com/campaigns/hr1207home.php
Perhaps Mr. McCullagh would deign to explain to this "Black" American just when has the US financial system not been politicized?
When it was only excluding us, mayhap?
Again the auther exposes his true motives.
Had the WH said yes, then Mr. McCullagh would have been screaming about how the administration is wasting taxpayer money, or how the administration is exercising socialism toward the bank, but now that the WH says no, he/she screams that it is because the CEO is a neo.
Mr. Obama will never make the right decision as far as you are concerned.
Your motives for your dislike of the president are quite transparent, Mr. McCullagh, and they obviously have nothing at all to do with politics, or economics.
I'll give you one credit, you manage to spew anti-Obama hate and get paid for it, that's pretty amazing for such a "liberal media"...
- by FromLori July 17, 2009 12:02 AM EDT
- Another possibility...
- Reply to this comment
-
- by brianbwb-2009 July 17, 2009 6:15 AM EDT
- "In other words, Barack is receiving $273,582.25 (and 2008 is not over) per year while McCain raised a paltry $30,532.44"
-
-
- by Kuei1248 July 17, 2009 2:36 PM EDT
- THIS IS HILLARIOUS!!! Citi has been claiming all week they need more bailout to prevent bankruptcy. Now, today, they claim a $3 billion profit! Americans are the biggest, DUMBEST suckers in the world. I told everyone before the first bailout was approved that this whole thing was nothing more than a scam. Yup! Right again. HEHEHEHEHE
-
-
- by Kuei1248 July 17, 2009 4:20 PM EDT
- ...and let us remember this Mr. Blogger. Lehman did not collapse. Lehman was the victim of a bankrobbery performed by the federal government. Still wondering where that $8 billion dollars disappeared to AFTER the feds seized the bank. How do the feds "LOSE" $8,000,000,000?!? Probably turn up in someone's laundry machine the way lost pennies turn up in mine.
-
-
See all 17 CommentsIf they do not re-bail out CIT they will sell it to one of their favorites to run out the competition. Goldman Sachs, and its fearless leader, Lloyd Blankfein, through their government connections, made sure that Lehman Bros. and Bear Stearns were ?wiped out?.
In other words, no bailout for them. Since the two were major competitors of Goldman, when they went under, Goldman took their market share. Lloyd Blankfein and Ben Bernanke are ?thick as thieves?. Goldman now completely dominates the securities trading market with an Obama sanctioned monopoly. Fink and Blankfein will make all the money under Obama. Count on it.
Larry Fink, CEO of Blackrock, a private equity company, and Blankfein, have direct access to the White House via Bernanke.
Let?s start with the numbers. Why is a first term Senator pulling down almost $300,000 a year from Goldman Sachs, Lehman Brothers, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Countrywide Financial, and Washington Mutual? He has not even completed his fourth year in the Senate and received a total of $1,093,329.00 from these eight companies and their employees. (all data from OpenSecrets.org). John McCain?s numbers, according to OpenSecrets.org for the period 1990-2008 (i.e., 18 years worth of data) only collected $549,584.00. In other words, Barack is receiving $273,582.25 (and 2008 is not over) per year while McCain raised a paltry $30,532.44.
Want another shocker? Barack Obama has received more from one source?Goldman Sachs $542,252.00?than McCain has from all of the companies combined. Who the hell is more beholden to lobbyists? And why does a junior Senator from Illinois rate this kind of dough?
Why are these firms and their employees showering Barack with their cash? Although the conventional wisdom wants to pin the Wall Street debacle on Republican greed, the reality is that the real estate market and the big players on Wall Street have been a Democratic game
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
Obama is OWNED by government sachs...
http://www.ritholtz.com/blog/2009/07/max-keiser-takes-offense-to-goldman-sachs-story/
And so the vote is in, McSame loses again.
Also it seems that "fromlori" is new to politics, Mr. Obama rates this kind of dough because he is the president, while McSame is just an old tired, tumor-ridden senator about to be put out to pasture.
That is how the game has worked from the beginning, and goes for every government in the world. nothing new here, so why now so all a-flutter?
Could it be...?