Per Bloomberg, CIT declared bankruptcy today.
Here's Jim Sinclair's take on what that means:
The so called quick surgical bankruptcy of CIT will result in a company that will only be able to provide 20% of its previous level of financial services to Middle America according to Friday’s Wall Street Journal.
Any institutions replacing these services will have:
1. Higher levels of credit worthiness to be met by small business.
2. Less funds committed to these loans.
Further, the assets of CIT in bankruptcy are the middle American loans outstanding that will be brutally attacked by the bankruptcy process.
That is going to result in a flood of middle American businesses declaring bankruptcy.
Denninger's take is here.
More difficulty in finding the funding CIT used to provide will place terminal pressure on many smaller US businesses.
When those businesses go Tango-Uniform, so too do their former employees.
Remember that Shadowstats.com has the broadest measure of unemployment* already at 21%, as of 10/2/09 (latest data available):
Anyone thinking this is as bad as it is going to get is delusional -- even if he is a close colleague of TOTUS.
* The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated "discouraged workers" defined away during the Clinton Administration, added to the existing BLS estimates of level U-6 unemployment.