The other day an interesting news item caught my attention. CIT Group declared bankruptcy, and along with other investors, the US Government will likely lose $2.3 billion of taxpayers (our) money. At least our elected officials refused a second infusion of cash.
While they were getting all those billions that didn’t help, in other parts of the country businesses were shutting down, putting many out of work. In the same issue of the paper there was a story about some town in the heartland, where the major employer, a furniture manufacturing company, shut down, almost destroying the town. I couldn’t help wondering if 100 grand of that wasted $2.3 billion might have saved this small town. Yet, this was only one small town out of many caught in this recession/depression, the term you use determined by how it has affected you and yours.
Of course, this bankruptcy only affects the holding company, not operating subsidiaries such as CIT Bank. Now, I’m no financier nor economist, so all that hair splitting makes no sense at all to me. Investors lose money, but some or most of the company goes on making money.
The part of the story that amazed and amused me the most was that CIT has retained Evercore Partners and FTI Consulting as its financial advisers. Now, let’s slow this down for those of us who are financially challenged. CIT is a financial institution, a really big one. Financing and moving money is what they do, and they hire people who are trained professionals to do all that financing. I doubt seriously if they hire auto mechanics or house painters to make loans and investments. So, why on earth do they need to hire other people to advise them? I’m beginning to underst
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