Carney On CIT Group: 'Let Thriving Companies Thrive And Failing Companies Fail'
Jul 15, 2009 at 4:10 PM
DailyBail in Bank Bailouts, CIT group, bailouts, banks, cnbc video, economic video, john carney, moral hazard

"Time to lower the flag on Bailout Nation and raise the flag for good old American Capitalism."

John Carney on CNBC from this morning discussing the potential bailout for small-business lender, CIT Group (not Citigroup).  Kudlow and Carney are the winners in an IKO. 

My commentary.  Moral hazard tends to multiply.  At this stage of the bailout cycle, the risk to the economy are greater from moral hazard than they are from the failure of CIT.  American business leaders and especially financial CEOs need to re-learn the lessons of failure and success.  We are rewarding the worst-managed companies while placing their better-managed competitors at a disadvantage.  Take a look at Ford vs. GM and Chrysler.

This is ludicrous and smacks of politics.  If Obama were not so concerned with popularity and re-election, he would accept the temporary dislocation from a CIT failure and teach the market a lesson.  Yet, at this hour, the stock is halted pending an announcement from Treasury on a bailout. 

Geithner.  Listen to Sheila Bair.  She wants no part of CIT, their brokered-deposit madness and their loan portfolio.  Time to draw a line in the sand.  CIT Group is not systematically important.  Let their competitors enjoy the spoils of business victory.  When will it fracking end?!!

Watch.


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