"Goldman Sachs...To Receive $1 Billion Payment, If CIT Files For Bankruptcy"

[WhiskeyGirl]

"Goldman Sachs Stands To Receive $1 Billion Payment, If CIT Files For Bankruptcy"

(RTTNews) -  According to the Financial Times on Sunday, financial services provider Goldman Sachs Group, Inc. (GS: News ) will stand to receive $1 billion payment, while the U.S. taxpayers would lose $2.3 billion, if troubled commercial lender CIT Group, Inc. (CIT: News ) files for Chapter 11 bankruptcy protection. Goldman agreed in June 2008 to provide CIT a long-term committed financing facility of $3 billion to fund both CIT's existing assets and new originations across its commercial finance businesses.

According to the terms of Goldman Sachs financing, if CIT defaults or goes bankrupt, it "would be required to pay a make-whole amount" that totals $1 billion. A CIT filing last week said that it was in negotiations with Goldman " concerning an amendment to this facility". While Goldman is entitled to demand the full amount, it is likely to agree to postpone payment on a part of that sum, the report stated. Meanwhile, Goldman would reap more than $1 billion as it also holds credit insurance that would be paid off.

What are the chances that a bankruptcy court would put taxpayers first?   Just ignore contracts like they did with GM and Chrysler?  Favoritism?  Nepotism?

I don't understand how this all works, but somehow, I think the stockholders get the shaft. 

CIT also received a $2.3 billion capital infusion from the federal government in December 2008, under the Troubled Asset Relief Program or TARP, after it was granted a bank holding company status Although the company sought additional help from the government, the Obama administration declined help to the lender, saying it had set high standards for granting aid to companies, leaving private investors as the lone alternative for the company to avoid a collapse. CIT was also refused access to the Federal Deposit Insurance Corp.'s debt-guarantee program in July 2009.

How much access to FDIC money does Goldman have?  Low or no interest?  Did Goldman use taxpayer money to make this deal with Citibank?

TARP/Taxpayers can't make a deal, Goldman does?  Will taxpayers lose this money through Goldman?

http://www.rttnews.com/Content/BreakingNews.aspx?Node=B1&Id=1084142%20&Category=Breaking%20News

I wonder if Citi would be in better shape if the Obama administration had brought real change and focused on building the American economy, instead of sending dollars to foreign nations, businesses, and workers.

No jobs for you American worker.  Just generational debt so big global banks and super rich global individuals can make money on your back, and the backs of your children and grandchildren.

[A's Fever]

"Did Goldman use taxpayer money to make this deal with Citibank?"

CIT Group, Inc. (CIT) and Citigroup, Inc. (C) are two separate and unrelated entities.

[WhiskeyGirl]

"Did Goldman use taxpayer money to make this deal with Citibank?"

CIT Group, Inc. (CIT) and Citigroup, Inc. (C) are two separate and unrelated entities.

My mistake. 

[WhiskeyGirl]

Did Goldman use taxpayer money to make this deal with CIT?

If CIT was good enough, along with Goldman to get TARP money, why didn't it have access to the FDIC?

There is something wrong with all this corporate welfare. 

There needs to be an audit of the Federal Reserve and all these conflicting interests and job rotations.

Would Goldman still be making money if they didn't get the pass through from AIG?

Was the taxpayer TARP a kind of pass through to?  Who else besides Goldman stands to profit? 

Would CIT have had the $1 Billion to pass along if they did not get the TARP money?

Something is wrong in Washington.

jmho

[WhiskeyGirl]

A report in the Financial Times' Sunday edition said that in the case of a Chapter 11 bankruptcy protection filing by the distraught commercial lender CIT Group files, the financial services provider Goldman Sachs Group will receive a $1 billion payment, while the US payers would have to bear a loss of $2.3 billion.

The Goldman Sachs' payment forms part of its $3 billion rescue package it extended to CIT in June last year.

This arrangement between Goldman and CIT came five months prior to the Treasury's $2.3 billion purchase of CIT preferred shares, under the federal government's Troubled Asset Relief Program (TARP).

read more here - http://topnews.us/content/27551-cit-bankruptcy-would-bring-1-billion-payment-goldman-23-billion-loss-taxpayers

Why does the government involve itself in all these bailouts?

They seem to be good and fruitful for firms like Goldman, and bad for taxpayers.

Aren't there smart people in Washington?  Those that work for ALL Americans?

It seems like the job rotation continues.

jmho

[WhiskeyGirl]

"CIT saga is just business as usual"

Kai Ryssdal: Small business owners will be relieved to hear that CIT is still alive. At least as of right now. This country's biggest lender to small and medium-sized businesses is smack up against a Chapter 11 filing, even after a federal bailout. Commentator Robert Reich says the CIT saga is just the latest example of business as usual on Wall Street and in Washington.

I recall reading over the past few months that firms like Goldman have NO consumer exposure.  They earn money on fees and such.  Was there ANY value to taxpayers in saving this company?

Who authorized the AIG pass-through to Goldman, Foreign Banks, and others?

Why is it good for Americans to allow Goldman access to FDIC and other moneys?  Federal Reserve money?  Do they have any consumer / small business exposure?  Anything significant?

CIT was the lender to small and medium sized businesses.  For some reason, in the eyes of Treasury and Federal Reserve, they are not as deserving as firms like Goldman.

But here's an interesting thing. When CIT goes down, Goldman Sachs reportedly will receive a billion dollars from CIT under a 2008 rescue agreement between the two firms.

Now, why will Goldman get a billion, while taxpayers lose more than twice that? Because the Treasury failed to protect taxpayer interests nearly as well as Goldman protected Goldman's interests. And why was that? Incompetence at Treasury? Close ties between Treasury and Goldman Sachs? Just bad luck?

You can rule out bad luck because almost the same thing happened last fall after the Treasury bailed out AIG, which owed Goldman $13 billion. AIG still hasn't paid us taxpayers and probably never will. But when we bailed out AIG, Goldman got repaid its money.

I seem to recall Goldman got moved up to a better position in the bankruptcy of GM and Chrysler, while everyday Americans and their pensions took the biggest hit.  Goldman also, iirc, got to continue to do business with these auto companies and their Italian owners after the bankruptcy.

Why don't taxpayers get better than a Goldman deal?

Why do taxpayers just get generational debt?

Goldman has announced record earnings for the first six months of this year, and set aside $11.4 billion for a bonus pool for its executives and traders, which comes to a few billion dollars less than we taxpayers have indirectly channeled to Goldman since last fall.

No jobs for Americans.  Goldman employees get more in bonuses than many can imagine as they lose there homes.

I don't want to pick on Goldman. All top five Wall Street banks have profited nicely from the bailout, all have increased their market shares, all their executives and traders are now making bundles, and all continue to have close ties to Washington.

Now, some in Congress want to set limits on Wall Street pay. This is one of several measures being considered for financial reform. The Treasury doesn't like the idea, but it sounds reasonable to me. As long as we taxpayers continue to bail out the Street, which seems likely to continue for some time, our tax dollars will inevitably find their way to these giant banks and their executives and traders.

Just follow the money, and watch what happens with CIT.

IIRC, there were concerns about CIT a few months ago.  The only lender to small and medium sized business.

What will happen to Mainstreet when this lender goes bankrupt? No need to worry, Goldman is still making money and we're in a recovery!!! 

No jobs, no money, no prosperity for Mainstreet.

Just Obama spending, debt, and debt slavery for future generations for those on Mainstreet.

read more here - http://marketplace.publicradio.org/display/web/2009/10/07/pm-reich/

It just seems like if Goldman has anything to do with a company, it seems to be bad business and debt for taxpayers.  Goldman is like a grim reaper for business.   

jmho