No rescue for CIT, taxpayers lose $2.3 billion
CIT’s press release this evening:
CIT Group Inc….has been advised that there is no appreciable likelihood of additional government support being provided over the near term.
The Company’s Board of Directors and management, in consultation with its advisors, are evaluating alternatives.
The company likely has only one alternative….bankruptcy.
With the fall in CIT’s preferred stock, taxpayers’ money is already lost. WSJ:
U.S. Treasury Department officials believe they will lose their entire $2.3 billion investment inInc., a spokeswoman said, which could mark the first loss of public money injected in banks through the Troubled Asset Relief Program.
Big kudos to Sheila Bair. Everyone wanted her to open up the debt guarantee program and she said no. This is progress, folks. Bankruptcies, not bailouts, are the proper way to work out bad debts. Extending a bigger lifeline would only compound taxpayer losses.