Before the bell: CIT Group finally waves the white flag

November 2, 6:32 AMAlbany Investing ExaminerHeather White

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11/02/2009: CIT Group has filed for Bankruptcy. After a turbulent run over the last 6 months, securing billions of dollars in additional financing to save the largest bank providing loans to small and medium size businesses through out the Country, CIT Group has has officially given up.

This news is tragic, especially being delivered on this first day of November, which will kick off the retail buying season for the holidays. CIT Group is the largest business involved in factoring, lending billions of dollars to retail corporations, helping them sustain income and inventory.

Such a blow this early in the retail season could create major problems for the CPI as well as other indexes moving forward.

I have been following CIT Group since its original drop in price in June bringing the stock down to $0.31. I am taught, as a Wall Street Executive, not to become emotional about stocks, however I must say after all of my coverage of this security, I am in fact truly sad to find out of its demise.

Currently I am reading Too Big To Fail and The Last Man Standing and once again reminded of the exact affect of all of the importance of the businesses included in collapse of the banking industry. I am truly concerned about the failure of CIT this late in the game, proving the the hemorrhage in the market has perhaps slowed down, but has not yet begun to be stopped.

The news that a corporation as important as CIT Group can indeed fail over a year after the initial economic crisis, is not a positive sign for this economy. Couple this news, with Wall Streets most important indicators coming out this week including job loss and unemployment numbers coming out later this week, it appears as if the markets will have another difficult week ahead. It just goes to show that we are not out of the murky waters just yet. I think this a prelude to more failures to come, which in and of itself is particularly scary.

Although I have not been writing as prolifically lately, this is a first in a series of articles I will be producing on a daily basis and I appreciate all of my followers and your continued support. Please stay tuned for more coverage on the development of the CIT Group BK, as well as news regarding corporations that I hope will not declare a BK and actually turn a profit.
 

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