CIT stock Halted today

[Swing low, sweet chariot. Comin' for to carry me home.]

hopefully, Obama will understand the need to save CIT from its liquidity crisis and quickly make this a non-issue

[Swing low, sweet chariot. Comin' for to carry me home.]

BREAKING NEWS: (cnnfn.com) "Troubled lender CIT says it has been told that it won't get additional government help, says it is 'evaluating alternatives.'"

WOW!  this is not a systemic risk, but it is a risk to recovery.

[Beet]

Good lord you are a joke. CIT hasn't been making significant enough loans since last year, to sustain its business model. The bankruptcy rumors sparked the liquidity run, not the other way around.

The government's decision to finally let one fail (albeit a small one) is right to me. It's a sign of confidence that they think this will not destroy everything. Of course, they're also not as well connected as some of the others, but that's a different story...

[Sam Spade]

Liquidity issues?  Well, to an extent.  But CITI is basically insolvent through my reading.

You see, CIT was a real classic garbage lender with a whole lot of crap on its books and very little good.  Throwing any more money this one's way ($2.5 billion in TARP, I believe) is just throwing it down the drain (seriously) and I don't see how it staves off bankruptcy long-term.

Its liquidity issues are not necessary recent.  Honestly, look at the sheet last quarter, I'm surprised they survived this long.

It shouldn't be that big of a thing, though it might shake the market a little, especially from the last three days of option expiration induced silliness.  CIT is not that big of a lender, all told.

[Swing low, sweet chariot. Comin' for to carry me home.]

I'm ok with letting CIT fail, I just hope something is in place to fill the void, CIT was somewhere in the neighborhood of being the 5th largest lender to small and medium size companies.