So what does the CIT bankruptcy mean for the U.S. as well as the global economy and its hopes for a recovery? At the very least, it means that the commercial lending market, which is already almost impregnable, is going to get a lot more difficult as small businesses scramble to find alternative sources of financing. This could prove to be especially arduous for CIT's factoring customers as CIT is the largest factoring company. In addition, it could have a more far reaching affect on some of CIT’s other clients such as Dunkin’ Donuts, Eddie Bauer and various sports teams as banks are copiously cutting back on lending to small businesses.
The filing certainly did nothing to calm the nerves of the markets ahead of monetary policy decisions due this week in the U.S., Europe and Australia as well as the all-important U.S. jobs data due on Friday. However, for the most part, the markets appear to have gotten their angst out of their systems on Friday and took the CIT news in stride today. Of course the unexpected news of Ford’s earnings helped the positive movement. In general, the money markets were mixed but felt little drama as October ISM Manufacturing was up, as were September pending home sales. Perhaps we’re becoming immune to bank failures.
At the end of the day, Goldman-Sacks comes out a winner and the American taxpayers the loser. In any event, CIT will be added to the growing list of taxpayer miseries and serves as a reminder that a full-blown economic recovery is still a long way away.
The filing certainly did nothing to calm the nerves of the markets ahead of monetary policy decisions due this week in the U.S., Europe and Australia as well as the all-important U.S. jobs data due on Friday. However, for the most part, the markets appear to have gotten their angst out of their systems on Friday and took the CIT news in stride today. Of course the unexpected news of Ford’s earnings helped the positive movement. In general, the money markets were mixed but felt little drama as October ISM Manufacturing was up, as were September pending home sales. Perhaps we’re becoming immune to bank failures.
At the end of the day, Goldman-Sacks comes out a winner and the American taxpayers the loser. In any event, CIT will be added to the growing list of taxpayer miseries and serves as a reminder that a full-blown economic recovery is still a long way away.
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