CIT Bankruptcy will come as soon as Monday morning
By Daniel at 12 July, 2009, 11:55 pm
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Just got the word from my brother in New York. Looks like Bankruptcy by the morning. They will also issue a statement trying to calm fears that will mention that they are working with debt-holders.
I will be up early trying to buy shares in the 25 cents area. You do realize that institutions own 98 percent of this, don’t you?
What that means is that there will be one hell of a sell of in the morning. These people unload everything when they bail out….they usually drive the price abnormally low, so there should be buying opportunities tomorrow.
The first plunge in price will likely be followed by a spike up, but there will be huge plunges during the day as tens of millions of shares are dumped on the market after the bankruptcy announcement.
Andrew
If you still don’t believe government is going to let it fail, please read:
By David Cho
Washington Post Staff Writer
Saturday, July 11, 2009
The Obama administration is developing an initiative to take money from the $700 billion rescue program for the banking system and make it available to millions of small businesses, which officials say are essential to any economic recovery because they employ so many people, according to sources familiar with the plan.
The effort would represent a striking shift from the rescue program’s original mandate, since it would direct billions of bailout dollars toward a plan that aims more at saving jobs than at righting the financial system. Some economists estimate that small businesses, defined as firms with fewer than 500 workers, employ most of the country’s workforce.
A proposal being floated by senior Treasury Department officials calls for using the bailout funds to expand a government program that helps small companies borrow from banks at low rates to keep their businesses going, the sources said. These “working-capital” loans would come with few restrictions and could be used to buy inventory, hold on to employees and pay off short-term debt.
The initiative would bulk up the Small Business Administration’s most popular lending program, called 7(a). Lines of credit for small companies could greatly increase in size. If a firm failed despite receiving this help, the government would cover most of the losses on the federal loan, perhaps as much as 90 percent. Lines of credit act like the credit cards for companies — short-term, revolving debt used to pay a variety of immediate expenses.
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