CIT is being bailed out at TAX PAYER EXPENSE

[TwixVoy]

The media is pulling a fast one yet again. The headlines are that CIT is being bailed out by private equity investors. Particularly GOLDMAN and JP MORGAN.

Now where do you suppose they are getting the cash to do that? Oh that's right from all the cash the feds have been giving them.

They have gotten wise to the fact the public is tired of this shit. So now they are funneling money through "private equity firms" to bail out other mega banks and keep the public in the dark. Goldman and JP Morgan are simply acting as a proxy for the feds.

The feds are basically handing Goldman and JP Morgan the cash and saying "Give it to CIT", then the media is reporting that Goldman and JP Morgan are the ones bailing them out. It is bull shit and I can't believe no one has called them on it.

[Selatius]

1. It's almost like laundering money through a third party to disguise the source.

The only thing is that what Citigroup and friends are doing is legal. They made it legal. Something the mafia wasn't innovative enough to do.

[aquart]

7. The Mafia wasn't well-enough connected.

But laundering money is exactly what it is.

[Rex]

2. How has it come to this?

[HowHasItComeToThis]

9. THAT IS MY FEELING TOO

CHECK MY I.D.

[Hannah Bell]

3. not sure that's the case. they repaid their tarp $.

[leftofthedial]

4. So is the Obama Administration effectively a criminal enterprise

controlled by Goldman Sachs?


Or what?

[TheWatcher]

5. Are you ready to face such a Truth yet?

Are any of us?

We need to answer that question quickly.

We are running out of time.

But Football Season Starts soon.

Oh Well.

"But, you and I, we've been through that
And this is not our fate
So let us stop talking falsely now
The hour's getting late...."

[TheWatcher]

6. Most True Believers are too busy feeling good and waiting for the next heroin high of Propaganda

The Media will no doubt masturbate forth on Monday.

But the Stock Futures are soaring.

Wall Street will Party big Tomorrow.

At our expense.

AGAIN.

Is It Bastille Day yet?

[FarCenter]

8. JP Morgan Chase and Goldman Sachs are not bailing out CIT

CIT is getting new funding from its existing bondholders.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7Z55wflDMCo

Barclays Capital is arranging the funding, said another person familiar with the negotiations. Creditors including Boston-based hedge fund Baupost Group LLC, Capital Research & Management Co., Centerbridge Partners LP, Oaktree Capital Management LLC, Pacific Investment Management Co. and Silver Point Capital LP agreed to provide the money, according to a person familiar with the deal.

[dixiegrrrrl]

10. CIT is paying 10% above LIBOR for the money.

So the lenders are doing well.

but what happens, muses Deninnger, if CIT cannot repay???

"10%?! Wow - and that's secured too, which means the "offering parties" are taking zero risk (assuming the so-called "assets" are worth their pledged amount.)

For years, CIT funded itself largely by selling bonds -- only to find itself in deep trouble when credit markets froze up amid the depths of the financial crisis a year ago. It has been trying to rely more on deposit funding from its bank, but the transition has been slow, and regulators are concerned about the risk involved.
Borrow short, lend long. Works great until your credit quality goes down the toilet and you can't borrow short any more.
This is the fallacy of those who play this game - that is, attempting to finance something on a shorter term than the "thing" will remain at issue. It is why companies get in trouble, it is why municipalities get in trouble, and it is why ultimately CIT is likely to fail anyway."

http://market-ticker.denninger.net/archives/P2.html

[FarCenter]

11. Borrowing short and lending long wasn't their real problem

They were in the business of factoring and leasing to businesses. This is mainly a borrow in big chunks and lend in small chunks business, and doesn't necessarily result in a mismatch in maturities. Indeed, the factoring business is mostly short-term borrowing as businesses sell their receivables to the factor at a discount and the factor gets paid in 30, 60 or 90 days when the factor collects the receivables.

Their real problem was going into the wholesale mortgage business.

The bank is not a significant part of their business. It has only $3 billion in deposits, while CIT's total assets are in the $80 billion range.