CIT group, which lends money to retailers, is on a verge of bankruptcy. Should it fail, it will be the largest bank failure ever, with more then 70 billion in assets. The company has already been rejected for a bailout, and the clock is ticking. If you think the credit markets froze when Lehman brothers failed, you have seen nothing yet.
This has the potential to devastate the whole economy.
There is a last minute effort to convert their debt into equity, however with mixed stories of exactly how much they need and by when is making this last minute attempt very difficult.
The fall out from this failure is going to be huge, should CIT file for chapter 11 bankruptcy, look for the financial and retail sectors to really take it on the chin the next day.
BTW and on top of this we are facing the sp950 hurdle, which many analysts are predicting is where the market will end the latest rally.
- Arthur Smelyansky
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