So CIT goes under and the market opens higher?

[TwixVoy]

So CIT goes under and the market opens higher?

Riigggghhhhhhhtttttttttttt..............

Oh but that's right. They primarily lend to small businesses so who gives a fu**?

It should be abundantly clear to anyone now that this recovery and the stock market rise are complete shams. We are being played for fools. The middle class is slowly being killed off while mega corporations post surprise "profits" largely due to cutting wages, benefits, and jobs. The poor are having an even tougher time.

Our union at work just got royally screwed on health care costs. I was talking to a fellow union brother who told me "If we go on strike I am going to have to cross the line. I just can't afford it. I have too many payments due on my loans." Shit like that was never nearly as much of an issue 50 years ago. Now today you miss a paycheck and your credit goes to hell for years.... meaning you will be dealing with even higher rates, and potentially even having trouble getting a job due to a credit score.

The rich and banks have us exactly where they want us. By the balls.

[skipos]

1. You are aware that stocks can go up on bad news

and down on good news, right? Short squeezes, profit taking and all that?

[leveymg]

2. Don't forget Credit Default Swaps, which was a big reason for the meltdown

They're still being sold.

Besides, as was pointed out, the market likes negative events that primarily impact smaller business and the middle-class. Makes us all more "flexible" and "productive."

[TwixVoy]

3. No shit sherlock

My point was that the DOW is up 100+ points on a major event that is going to screw small business.

[msongs]

4. they are screwing taxpayers out of 2.5 billion by bankruptcy...sound moves raise stocks nt

[Ikonoklast]

5. This was not unexpected news.

There are other factors driving the Dow this morning, some good economic news in other sectors.

Ford blew out 3rd quarter estimates, for one thing.

Ford of North America is on track to return to profitability a year ahead of what was previously thought.

[TwixVoy]

7. No kidding

Cash for clunkers drove up the Q3 numbers. The problem is there is no more cash for clunkers, so what do you expect is going to happen when the Q4 numbers come out?

All these corporations "returning to profitability" after slashing jobs, benefits, and wages is unacceptable IMO. We should not be competing with Chinese slave labor.

[Speck Tater]

6. The Great Wall Street Gambling Casino has no connection to reality. nt

[AngryAmish]

8. Did you ever think they had already priced a Citi failure a long time ago

everyone knew they were a corpse for a long time.

[TwixVoy]

11. When do you think Citi is going to fail?

I don't think they will.

[AngryAmish]

12. you got my typo

CIT was a corpse

[AllentownJake]

18. So is Citi

[Statistical]

21. CIT isn't a corpse.

Has $71B in assets and $64B in debt.

Judge will refinance it enough to allow CIT to emerge from bankruptcy.

CIT will likely opt to stay in BK protection until economy recovers more because recovery economy can only help their cashflow situation.

Private finance already pledged $1.5B in debtor in possession financing with $3.5B credit facility in future. Unlikely big players would be throwing that kind of money at a "corpse".

[AllentownJake]

28. The asset number will get revised downward

Accounting is a beautiful thing and I have a feeling that there will be some write downs when their books are opened up. Their CEO got them into some really risky shit.

[Statistical]

29. No doubt but so will liabities.

Bondholders will take a haircut. How much depends on how much the books were padded on the asset side.

The idea that BK protection = CIT will cease to exist is just a fallacy though.

[Ruby the Liberal]

9. They don't like uncertainty. CIT has been "uncertain" for a year now

They announced a restructuring plan over the weekend. Had they announced BK without details on the restructuring, you would see more fluctuation.

[Kansas Wyatt]

10. Another Big Bank failure right after gasoline prices rose.

Is anyone else noticing the trend?

Gas prices rise, then a Big Bank fails. Are these failing Big Banks trying to squeeze more of a bail-out from the people, before they go under, or are trying to keep above water long enough to pick the carcass clean?

[Dreamer Tatum]

22. Facepalm

This isn't a bank failure.


JEEZ.

[Kansas Wyatt]

25. Gut Check

If they didn't FAIL, then they can pay back the tax payers and withdraw from "protection."

[Statistical]

31. They will withdraw from protection however they will not pay back taxpayers.

Why would any company voluntarily choose to pay back something they legally don't need to.

Don't get mad at CIT get mad at your elected officials and appointed govt employees who provided CIT funding that was junior (behind existing debt). Doing so virtually guaranteed a Bankruptcy judge will wipe it out in BK proceedings.

The Bankruptcy judge will likely wipe out taxpayer bonds using existing bankruptcy law. The rules for this "game" were known well in advance. The govt simply was stupid and didn't protect its investment.

[Kansas Wyatt]

32. Then CIT... F A I L E D!

[Statistical]

33. You Winz Kansas!

[Statistical]

23. CIT didn't fail.

CIT isn't seeking any further taxpayer funds.
CIT has nothing to do with price of gas.
CIT entered bankruptcy PROTECTION
CIT has already secured PRIVATE funding in BK

[Kansas Wyatt]

24. "CIT didn't fail." - Then why are they bankrupt?

"CIT isn't seeking any further taxpayer funds."

So they will immediately PAY BACK taxpayer funds they already scammed?

"CIT has nothing to do with price of gas."

I just asked a simple question, since the increases in gas prices last year correlated with Big Bank failures.

"CIT entered bankruptcy PROTECTION"

Why did they enter bankruptcy if it didn't FAIL?

"CIT has already secured PRIVATE funding in BK"

Well then why are they NOT withdrawing from their bankruptcy and give the taxpayers their money back?

[Statistical]

30. Read a little bit on how bankruptcy works.

Bankruptcy does not mean broke.

Bankruptcy is a protection in civil law that allows creditors to legal prevent collections by creditors. CIT doesn't have cashflow to make debt obligations. WITHOUT BANKRUPTCY PROTECTION Cit WOULD fail because creditors would attempt to use the courts and force CIT to sell off assets to pay the back.

Bankruptcy PROTECTION give s struggling company PROTECTION from its creditors.

[Dreamer Tatum]

13. What do you care? You shorted the market, remember?

You told everyone to take every nickel out of the market and put it in gold. Yes, you did. Do you have sour grapes, or something?

Jesus Christ, last week there were high fives all around because the uptick in the market and the GDP numbers were PROOF POSITIVE that the stimulus worked and the Obama Recovery was in full swing. Now you're bummed because the market is higher?

Ridiculous.

[TwixVoy]

14. I still say take every nickel out

Mega corporations are making profits based on job cuts, less wages, and less benefits. There will be no consumer recovery. Mark my words.

[Dreamer Tatum]

17. So long as everyone in this thread understands your personal interest in the market tanking

say whatever you like.

And for the record, you speak in overly broad, opinion-based generalizations to be of any use to someone trying to decide how to allocate their funds. I won't mark your words for anything until you put forth a fact-based, lucid argument for taking every single nickel out of the stock market.

I think you want the market to tank so you won't feel regret for turning all your wealth into gold.

[On the Road]

15. Knowledgable Traders

buy on the rumor and sell on the news. This is very common and does not imply manipulation.

[HughMoran]

16. You seem dissapointed

BTW, not only wasn't this a surprise, but all the other news today is positive, so you have to think with all of your brain at times.

[Statistical]

19. CIT isn't going under.

Bankruptcy is BANKRUPTCY PROTECTION.

CIT has $71B in assets and $64B in debts. It has a cashflow issue in that it can't meet debt obligations. In other words its interest payments exceed its current cashflow. It enters bankruptcy PROTECTION to secure protection from its creditors. With DIP financing and judge restructuring debts it likely will emerge from this "prepackaged" bankruptcy. If CIT was going under then why would 2 private companies risk $1.5B in DIP financing. 4 major banks are putting together $3.5B credit facility. No real money sees CIT isn't dead simply wounded but cashflow reduction (for struggling companies). That situation will improve with the economy and BK PROTECTION will allow CIT to survive long enough for cashflow to pick up again.

Also CIT doesn't only lend to small business. Not sure where you got that idea.

Anyways the market is up because their is bankruptcy (refinance & emerge) and bankruptcy (no value and company goes their to die).

[Dreamer Tatum]

20. I wish there were more of you on DU. nt

[AllentownJake]

26. CIT has a cash cow

In their factoring business. I expect them to come out of the protection a more sound lender focusing on factoring and moving away from the risky lending their outgoing CEO encouraged them to get into from 2003-2007

That being said I also expect them to pull back from lending as they rebuild their balance sheet.

[AllentownJake]

27. Market is down now

The market goes all over the place in a day. Wait till the end of the day to determine where the market is at.