I'm still wondering if we will see the market up high tomorrow wih good work from the PPT's around the markets. People may get paniced over the fact of CIT going under.

I could see the PPT's working overtime to keep the markets up so people dont think this is a big deal. For me though I really think this is the begining of the Real-estate bubble collapse.

The bankruptcy is prepackaged, which means the outcome has already been agreed on. Bondholders (I'm one) are accepting 70 cents on the dollar in new bonds plus about 90% ownership of the new company stock. Current common and preferred shareholders will get nothing, although preferred holders may recoup something if the company does well going forward.

They have recieved loans of 4.5 billion in the last week and since all their debt has now been pushed out 5 years, they should have no problem operating as usual. This will actually be a welcome relief to the small businesses doing business with CIT. CIT will have plenty of money to keep credit flowing and all their recievables (sold to CIT) will stay out of the jurisdiction of the court.

CIt and Citi are different companies and have no relation except a similar name.

Do not buy any CIT securities of any kind at this point. Bond sare a money maker from here, but I'm not sure what their standing would be if you buy them after bankruptcy.

Very important story because it shows that despite all the rosey outlooks we get from the so called media financial experts we are from from recovery.

I read an article the other day that said that consumer spending was down yet the previous week i read it was up. They don't even know what they are telling us anymore it is like they tell us both scenarios so they can say they told us lol.

I also saw on CNN(CIA news network) they had a mortgate specialist on say that they have implemented knew regulations or sumthing that actually makes it harder to sell your home but cheaper to buy one.

This sounds amazing to me so people who can't afford their homes anymore can't get rid of them and the people that maybe shouldn't have homes will be enabled to get one easier.

Typical we are conned on every front

So what if those companies are debt free? That's only a handful out of how many?

You're missing the point. My point is very simple: Companies - and individuals - that are not bloated with debt have a much higher chance to succeed in this difficult economic environment.

And yes, there are companies and individuals who are completely debt-free. As I said before, this is generally rare nowadays, but there are some companies that still manage to run their businesses debt-free, and there still are individuals that manage to stay completely out of debt.

You asked for examples of debt-free companies, and I have you a handful.

Many entrepreneurs who have stayed in business for 10 years or more know the dangers of high debt levels. That's why most successful small businesses and successful entrepreneurs are very careful about taking on too much debt - and when they do, it's for a specific, practical business purpose (acquiring real estate, buying much needed equipment, etc.).

Anyone that works with small business owners in any capacity knows that the ones that succeed generally are very wise stewards of their money.

As far as your rant about Microsoft, read my comment above. You asked for examples of debt-free companies. I made no commentary on Microsoft's products, operating history, culture, etc. I also gave you 3-4 other well-known companies as simple examples of debt-free companies. Take a chill pill.

The benefit of the failure of CIT Group and their ilk, is that it will force entrepreneurs and businesses to run their businesses without relying on credit. Some will fail, and will have to shut their doors. For those that survive this crisis, they will be the better for it. Running a business debt-free is the way most businesses used to run, until our economy become so overbloated with debt and banks became ultra-aggressive in their lending practices.

Again, this is actually a good thing. Because we are cleaning out the waste in our corporate finance circles, and letting the loosey-goosey lenders die a natural death. That's a good thing.

Those banks and lenders that were overzealous in the boom years need to die off so that the well-run, conservative lenders can resume their rightful place in the marketplace.

This country needs sound, conservatively run banks and lenders. We have had way too many insane lending practices for way too long. I am actually glad that CIT failed. It will be painful, but it is a necessary step to a recovery. Giving CIT a bailout is like giving a drug addict more heroin. They need to file bankruptcy, clear out the waste, re-organize, and rebuild.



[edit on 1-11-2009 by CookieMonster09]

I hope the economy collapses.


As much chaos as it would cause.

This system

MUST..GO

The stock market will take a heavy blow tomorrow, and that's Good News.

It's the first step for the New World Order that's emerging within the next few months.