Comments on: You Know Those Wonderful Signs That The Economy Is Recovering?

By: Tully

Tully — Mon, 02 Nov 2009 22:18:17 +0000

“…the Wizard of O’s munchkin chorus …”

Phrase of the day, filed for future re-deployment!

By: gary gulrud

gary gulrud — Mon, 02 Nov 2009 18:17:41 +0000

“The sound of our tax dollars circling the bowl.”

$2.3 billion in TARP money, smoke and ashes. Just the beginning folks. Megan McArdle was foaming “forget hyperinflation” the government cannot inflate away future tax obligations.

I am so relieved. On or about 2025 interest payments on existing public debt will exceed GDP but our kids can just negotiate a refinancing plan. That’ll keep hyperinflation cowed.

By: martian

martian — Mon, 02 Nov 2009 15:01:36 +0000

That’s the biggest point that no one is talking about, crosspatch, CIT received massive amounts of government bailout money, stimulus money – OUR money and it’s still declaring bankruptcy. The bailout apparently did nothing for them. What does that imply about other financial institutions that received bailout stimulus funds? Is CIT just the first domino to fall? This is a very worrying development.

By: crosspatch

crosspatch — Mon, 02 Nov 2009 01:48:16 +0000

This is what bugs me:

Under the bankruptcy plan, CIT bondholders would recover 70 cents on the dollar in new notes and equity in the reorganized company. But the government, whose investment was in the form of preferred shares, probably would recover nothing.

Wasn’t the government supposed to score a PROFIT from these bailouts?

The sound of our tax dollars circling the bowl.

By: Gaius

Gaius — Mon, 02 Nov 2009 01:31:41 +0000

CIT is currently loaning a fraction of a fraction of what it did just a short time ago. Those measly 10 billion dollars come out of the pockets of investors. That is wealth lost, not redistributed, not used for other purposes – like creating jobs. It’s just gone.

I realize that $10 billion isn’t what it was before Obama’s trillion dollar deficits, but to me, $10 billion is more than just folding money.

If you got burned out of even $100 would you be inclined to put your money at risk again?

By: Dan Patterson

Dan Patterson — Mon, 02 Nov 2009 00:18:19 +0000

My small mind is confused about the details of the CIT issue. A quote from the Washington Post article: “…prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.” Does that reorg plan mean that funding to current clients will continue? And will CIT seek additional business clients?

At best this reorg will cause ripples through the business funding networks. The implications beyond that are to be seen.

Dan Patterson