Weaver95

It’s getting so that I’m afraid to read the financial news past 4pm on a friday.  Here’s the latest from the great and wonderful world of high finance. CIT is the fifth largest bankruptcy so far this year.

They’re a big pile of assets too:

In the bankruptcy filing, CIT said it had $71 billion in assets and $64.9 billion in liabilities. Only Lehman Brothers, Washington Mutual, Worldcom and General Motors had more in assets when they filed for protection.

Like I said - lots of assets.  To the tune of 71 billion.  that’s ‘B’, for ‘billion’.  And they declared bankruptcy.  Yeesh.

Now, I know what you’re thinking - you’re telling yourself ‘gee, that doesn’t mean anything’.  After all, something so big and important means that someone will step in and limit the damage.  Well, before you start getting comfortable with yourselves consider that this is the FIFTH LARGEST FAILURE THIS YEAR!  And we’re not done yet.  Not by a long shot.  All these failures, all that money lost…eventually we reach a point where the Fed simply cannot absorb any more damage.  Not to mention the fact that nobody in the Fed can dampen the ripple effects from this failure.  Jobs will be cut, businesses will suffer, yet MORE people will be out of work.  More people out of work means less tax revenue.  Less tax revenue means….well, you see where this is all going.

But wait!  it gets worse!  Ready?  Read this part:

Common shareholders, however, will be out of luck. CIT said all existing common and preferred stock will be cancelled upon emergence from bankruptcy protection. That would likely include preferred stock from the $2.3 billion in funding from the U.S. government’s Troubled Asset Relief Program (TARP) the company received in its efforts to stay afloat.

Yes, you read that correctly.  CIT is stealing $2.3 billion dollars in taxpayer money and there is nothing we can do about it.  All those drug dealers and identity theft people sitting in county jail should quit with the petty scams and learn corporate accounting.  That’s where the BIG score really is these days.  2.3 BILLION, gone in a blink of an eye and it’s entirely legal.  Wow!