Quote:
Originally Posted by Villages Kahuna
It looks at the moment that CIT, the big finance company, will file for bankruptcy as early as Monday morning. Their appeals to the federal government for bailout financing have been met with a firm NO! answer. Because CIT has no debtor-in-possession financing arranged and little chance of accomplishing that, it would appear that CIT will probably be liquidated, either purchased by another financial institution or broken up in pieces and sold off.
CIT's failure will have widespread effects on many small and medium-sized businesses to whom CIT provided financing. They too will find themselves in a position of having no source of debt financing to continue their operations.
Here's an article describing how CIT got to where it finds itself.
http://online.wsj.com/article/SB1247...ml#mod=testMod
As painful as this might be, the fed's NO! answer is almost certainly the right one. (IMHO, at least.) |
I agree, but there is definitely more to this story.
Mr. Peek joined the Board of Directors for Freddie Mac in 2005, and two lears later resigned from the board, citing his desire to avoid the appearance of conflict-of-interest in connection with a proposed purchase by Freddie Mac of securities backed by a portfolio of CIT residential mortgage loans.
"Jeff's experience and insight have been enormously valuable to Freddie Mac and to the success we have had in building our shareholder value and fulfilling our housing mission," said Richard F. Syron, chairman and CEO, Freddie Mac. (
http://www.freddiemac.com/news/archi...signation.html)
Whether there were political implications (as some reporters allege) to the "no to CIT" decision or not, the aroma surrounding CIT and Freddie Mac and Mr. Peek regarding the residential mortgage mess is no Chanel No. 5.