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alstry (< 20)

Main Street....Prepare to DIE!!!!!!!!!!!!!!!!!!!!!!!!!



July 15, 2009 – Comments (12)

The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall ... deny to any person within its jurisdiction the equal protection of the laws".

It appears that the 14th amendment now only applies to Wall Street these days.

SAN FRANCISCO (MarketWatch) -- CIT Group Inc. said late Wednesday that it probably won't get a government bailout anytime soon, increasing the likelihood that the lender may collapse in what could be the fourth-largest bankruptcy in U.S. history.

CIT is a major lender to small and medium-sized businesses. It's failure could cause disruptions in the apparel sector.


Thousands of businesses could be negatively impacted by CIT's failure............impacting hundreds of thousands of guess is that none of them work on Wall Street.



12 Comments – Post Your Own

#1) On July 15, 2009 at 8:02 PM, millionby24 (< 20) wrote:

LOL, troll

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#2) On July 15, 2009 at 8:12 PM, alstry (< 20) wrote:


Michigan's unemployment rate for June of 2009 jumped to 15.2%. That's a 1.1% increase over the prior month.

Rates usually climb or fall by a few tenths of a percent. It's rare to see such a substantial increase or decrease.



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#3) On July 15, 2009 at 8:16 PM, alstry (< 20) wrote:



 As United States taxpayers know, income tax laws have long implicitly encouraged marriage and childbearing...Such a pronatalist bias of course is no longer appropriate. In countries that are affluent enough for the majority of citizens to pay taxes, tax laws could be adjusted to favor (instead of penalize) single people, working wives, and small families. Other tax measures might also include high marriage fees, taxes on luxury baby goods and toys, and removal of family allowances where they exist. Other possibilities include the limitation of maternal or educational benefits to two children per family.


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#4) On July 15, 2009 at 9:11 PM, dickseacup (< 20) wrote:

income tax laws have long implicitly encouraged marriage and childbearing..

Actually, there has long been a marriage penalty under US tax law. It began, if my memory serves, in the mid- to late-1960s and continued up until around 2001. The relief was extended maybe three or four years ago, but I think it expires again in 2010 or 2011. 

The law penalized married couples for thirty years or more. There was equity (or parity, if you prefer) for maybe eight years. I see evidence of shoddy, sensationalist journalism not rooted in fact.


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#5) On July 15, 2009 at 9:48 PM, alstry (< 20) wrote:

The 101-year-old moneylender appealed for emergency assistance last week. It provides day-to-day finance to more than 760 manufacturers and 300,000 retailers, many of which rely on short-term loans to smooth seasonal bumps in trading.

Analysts had warned of harmful consequences to companies strapped for cash if CIT was allowed to fail. David Strasser, an analyst at Philadelphia-based Janney Montgomery Scott, cautioned that shelves could be bare if CIT failed. "We could see significant inventory issues for the [Christmas] holidays."

With $80bn of assets, CIT is only a fraction the size of Wall Street banks such as Goldman Sachs or Citigroup.While it does not fit into the government's usual definition of "systemically important" organisations, its demise could leave thousands of businesses strapped for cash. Its clients range from Dunkin' Donuts franchisees to vendors dealing in Toshiba and Microsoft products.

Bert Ely, an independent banking analyst, said the timing of CIT's difficulties was "terrible", coming just as concern mounted about a double-dip recession. "It's a very large lender to small and medium-sized businesses and there's a lot of legitimate concern about what would happen if it's allowed to shrink further."

Worsening CIT's difficulties, customers have been drawing down millions of dollars on credit lines in fear that the money may not be available much longer.

The US treasury secretary, Timothy Geithner, is thought to have been reluctant to set a precedent by bailing out a company of relatively modest scope, with little at risk in deposits from high-street customers.

James Barth, an economist at the Milken Institute, said the treasury had to stop intervening somewhere. "Not all firms have to be saved and the government has to draw the line at some point.

The POINT appears to be Wall Street....who gives a damn about 300,000 retailers and their employees!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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#6) On July 15, 2009 at 10:27 PM, Seano67 (24.38) wrote:

It's the first time Obama's said 'no' to a bailout request, and I'm actually surprised. Apparently he feels the economy is now stabilized enough to be able to withstand a large, painful failure, and in the Obama administrations view CIT isn't big enough or important enough to warrant a bailout.  This whole situation with CIT Group just offers a perfect illustration of the dangers of these bailouts and why they should have never been started, because once you start bailing out companies right and left, everyone in trouble is going to come at you with hand held out, and when does that stop, and how is that determination made?

It's just like opening a can of worms, because inevitably it raises questions of fairness, as in how is the CIT Group any less worthy of receiving a bailout than BAC or Wells or Citi? Answer, they're not. CIT provides financing to roughly 1 million small companies and businesses, many of whom are already struggling to survive the recession. And there's no question but that CIT going under will knock a significant portion of these companies right out of business, so there will be pain for a lot of people just as if one of those big banks had failed. So if those banks, many if not all of whom were engaging in some funny and dirty business- if they're worthy of bailout, then how the hell is CIT Group not?

I'm not advocating a bailout for Cit either. It's just- once you've started, where is the line drawn? 

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#7) On July 15, 2009 at 10:39 PM, alstry (< 20) wrote:


You shouldn't be surprised.  He said "no" to California as well.

Remember my warnings.....prepare for change.

This is all about change.......the Wall Street way.

You last line wafts of equity.....but there is none in this game......that is why I get so frustrated.  If we are screwed, then we should all be screwed fairly, if we are to be saved....then an attempt should be made to save all.

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#8) On July 15, 2009 at 11:06 PM, fmahnke (68.07) wrote:


CIT should fail. They are one of the most poorly managed financial instiutions in the USA. Overleveraged, with around a 12% cost of capital, three equity offerings in the past two years and $2.3Billion of TARP already. I shorted them at 5 last fall, and altho ugh I made a nice 25% gain, didn't have the balls to keep the pedal to the metal. (at 25% of book you start to wonder) 

You warn us of the unsustainable debt levels. yet bailing out CIT would clearly be throwing good money after bad.  Wall Street will win, as credit worthy CIT borrowers will find a funding source from some other lender.  (although I wouldn't be surprised to see the US Gov't, kick in some liquidlty directly to borrowers if needed) However, failure of the weakest players is essential ro Capitalism, 

Do you think we should bail this Company out , pay their big salaries for incompentent execs ?  I understand the Wall Street vs main street argument, but a second mistake doesn't make the the TARP fiasco better ??  To me, It's like arguing for the Surge, when we should have been withdrawing from Iraq....!!!!!!!!!!!!!!!!!!!!!!!!!!!!

My bet is that they will step in and offer some type of funding for the borrowers and for once, will have actually gotten it right 

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#9) On July 15, 2009 at 11:13 PM, alstry (< 20) wrote:


I think you and I pretty much agree on this one;)

Too bad you didn't stick with your short....but nice call.

Don't closet the Wall Street vs. Main Street could be the foundation for social unrest.....and maybe something considered.




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#10) On July 15, 2009 at 11:24 PM, fmahnke (68.07) wrote:

Yes indeed.  Sure did hear it when it came to GM.

Worse yet, given the lack of Tea Party coverage by our media moguls, we may even see it in person before hearing about it.

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#11) On July 16, 2009 at 2:27 AM, AdirondackFund (< 20) wrote:

Nice pic Alstry.  80 Billion is a lot of money to suck out of the economy.  Did you see what the Bondholders are doing to the Housing Market?  At this point it is every man for himself.  10 and 30 year bonds slid hard today.  We should see a crash here pretty soon. 

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#12) On July 16, 2009 at 11:56 AM, davejh23 (< 20) wrote:

fm - "failure of the weakest players is essential to Capitalism"

So much for capitalism.  Too many of the "weakest players" have already been bailed out.  AIG is worth less than 1% of the $182 billion that we've dumped into them, and will still probably fail.  So much for the taxpayers getting their money back.

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