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  • CIT Group, Inc. (CIT) 1 comment
    Jul 13, 2009 11:19 PM | about stocks: CIT

    Ok so CIT group is up 26% after hours.  Did you expect anything different?  According to WhatsTrading.com CIT was an option volume leader today 72% of which were calls.  Someone bought 60,000 August $2.00 calls this afternoon, why?  You already know the answer but I will give it to you anyway:

    • From the WSJ, “U.S. government officials are in advanced talks about providing some sort of aid to CIT Group Inc., one of the country’s primary lenders to small and midsize businesses, people familiar with the matter said.”
    • Government officials are worried about unforeseen consequences as  they are lender to nearly 1 million companies

    The Fed seems cool with it, but in the end the Fed will suffer major losses, as will taxpayers. 

    TraderMark also makes an interesting point,

    And let me finish this thought with… who else. We do NOT want this (fill in the blank) company to lose any money so bring all the King’s horses and all the King’s men (more importantly bring the peasants coins) to save the Gold Men again. Whatever is done, CIT Group must be saved. Otherwise – Goldman could lose money.

    • The company secured $3 billion in financing from Goldman Sachs (GS) in June 2008.

    The reasons for bailout suddenly became so much more clear.

    Themes: Distressed Debt Stocks: CIT
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  • JAMES NATHAN
    , contributor
    Comments (2) | Send Message
     
    THIS IS UNFAIR. THE TRUTH IS THAT THE GS IS HEDGED AND PALTRY; BUT THE LOSS OF A LENDER THAT SPECIALIZES IN RECEIVABLES FOR NEARLY A MILLION--950,000-- BUSINESS IS REAL DISASTER TO THE ONE SECTION OF THE AMERICAN ECONOMY [SMALL BUSINESS] THAT GENERATES JOBS AND RETAINS EMPLOYEES AND THAT IS THE HEART AND SOUL OF MIDDLE AMERICA. THE CRIME WAS NOT HELPING CIT IN DECEMBER WHEN GE AND OTHERS IN THE SAME SPACE GOT ACCESS TO THE FDIC BACKING. MS BAIR'S GREEN EYESHADE APPROACH TO THE FDIC HAS MERITS, BUT NO SENSE OF WHAT IT MEANS TO HAVE DOLLAR GENERAL OR OTHER SMALL RETAIL STORE AND NOT BE ABLE TO FINANCE YOUR INVENTORY, EVEN THOUGH YOU ARE PROFITABLE BUSINESS.
    14 Jul 2009, 12:00 AM Reply Like
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