Tom Lindmark

Should CIT Be Saved? I Think Not

GMAC was "saved" because it was part of the larger picture of the GM bailout. Life isn't always fair.

A CIT bankruptcy doesn't mean that the financing they extend to small businesses will vanish. It will be a Chapter ll which means they will continue to function. No small business owner will be thrown out in the street.

At some point we have to start letting the free market function. There may be a risk but we have to let the weak companies go down, restructure in bankruptcy and emerge hopefully in a more competitive format. Now is a good a time as any to give it a try. CIT's demise will not take down the economy.


On Jul 11 11:16 PM Lefly wrote:

> Except, of course, that CIT was the #1 lender to small-to-medium-sized
> businesses in the US, according to the SBA -- the kind that make
> up the majority of employment in the economy, and account for over
> half of the non-farm GDP.
>
> Not having CIT in the picture means that access to business loans,
> the foundation of entrepreneurship and capitalism, will be increasingly
> hard to come by.
>
> Not to sound the gong of doom, but a CIT bankruptcy would send the
> economy into a significantly deeper recession: if the initial worry
> was that the credit markets had seized up, imagine the panic that
> will come when business owners are unable get financing to keep their
> companies running; when we have more failures like what's going on
> with Dunkin Donut franchisers, pushing more workers into unemployment.
>
>
> CIT needs to be saved -- if GMAC was given approval for the TLGP,
> so should CIT!