CIT’s Customers Issue an Urgent Request to Obama administration

[ASusilovic]

Thirty-two trade groups, in an unusual display of unity, pleaded in a letter on Friday night for the Obama administration to reverse its decision and extend aid to the beleaguered small-business lender CIT Group Inc. as the firm inches closer to a possible bankruptcy filing.

The coalition, which included the National Retail Federation, the National Cotton Council, and the Southern Textile Association, sent a letter Friday night to Treasury Secretary Timothy Geithner urging him to help the CIT avoid collapse.

The groups said “the number of jobs that depend on the successful outcome of the CIT crisis is immeasurable.”

“As the U.S. and world economies struggle to recover from the most devastating recession in recent memory, we are writing to impress upon you the very severe ramifications that a CIT bankruptcy would have on more than one million small and medium-sized businesses, their partners in the U.S. retail industry and the manufacturers and service providers that supply that sector,” the groups’ letter said. The groups asked the administration to “reconsider every possible option to address the current stresses confronting CIT and to prevent further tightening of the credit markets.”

The groups signing the letter represented parts of the retail, textile and apparel industries, such as designers, manufacturers, retailers, furniture groups and others.

http://blogs.wsj.com/economics/2009...rgent-request/?mod=rss_WSJBlog?mod=marketbeat

 

[MattF]

18% unemployment

 

[bidask]

CIT going bankrupt would affect these businesses only if they need to take out new loans. if their businesses were profitable, then CIT going bankrupt would not affect them at all. the real problem is that these businesses are not profitable. they need new loans to pay the interest on the old loans.

 

[nutmeg]

This whole economic affair reminds me of the 1906 San Fran earthquake. Imo, there are many parallels, the most important though, nothing is going to get rebuilt without lenders. If the gov't would be a direct lender or set up an institution to offer credit rather than funneling money to exisiting banks recovery could begin.

There are many of us here who have had their credit lines reduced for no reason. Any opportunities went down the tube, just as it will for the customers of Moore-Handley.

 

[nutmeg]

Quote from bidask:

CIT going bankrupt would affect these businesses only if they need to take out new loans. if their businesses were profitable, then CIT going bankrupt would not affect them at all. the real problem is that these businesses are not profitable. they need new loans to pay the interest on the old loans.

Not quite. Business have seasonal cash needs. Some are rolling existing loans. Maybe the gov't obtains loans to pay off interest on exisiting loans but commercially? It'd be a short & sweet death.:eek:

 

[Mercor]

Quote from bidask:

CIT going bankrupt would affect these businesses only if they need to take out new loans. if their businesses were profitable, then CIT going bankrupt would not affect them at all. the real problem is that these businesses are not profitable. they need new loans to pay the interest on the old loans.

No, much of the financing is in factoring. Successful, profitable companies finance receivables to secue cash flow for current operations. This is critical for meeting payroll and payables.

Cash flow is the struggle of any small business.

 

[trefoil]

Precisely. Working capital.
I can't see them letting this go under and take all this stuff with them. It would just confirm that their bank plan, which was just a continuation of the Paulson debacle, was all about saving Wall Street, nothing more.

 

[Mercor]

The hatred of small successful wealthy business people is terrible.

Obama tax on wealthy for health care is a tax on 2/3 of small business profits.
Now to let CIT fail is a hit to small business.

Small business is a thorn in the side of unions. Obama is attacking anything that hurts unions

 

[Bigpipn]

+1 Obama is the most anti-capitalist we have ever had at the highest office. This [next 10 years] is the last gasp for socialism. If the illuminati convince us to give up a few more rights for some liberties this will be an economic wasteland for decades to come.

Quote from Mercor:

The hatred of small successful wealthy business people is terrible.

Obama tax on wealthy for health care is a tax on 2/3 of small business profits.
Now to let CIT fail is a hit to small business.

Small business is a thorn in the side of unions. Obama is attacking anything that hurts unions

 

[wartrace]

CIT already received Tarp funds once, money the taxpayers will never see again. WHY would we be willing to throw more money into it?

Let it fail. Despite the recent efforts, it is not governments job to finance failing businesses. Failing businesses should use bankruptcy law in any attempt to survive- NOT government & the tax payers.