CIT Group: Bankruptcy Filing Possible

by Jordan Yerman | July 13, 2009 at 06:49 am

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CIT Group is in danger of failing. The 100-year-old financial institution has stated that if it dies, it'll bring its customers along with it, as they will not be able to survive without CIT Group lending. CIT Group is currently exploring its options, including a bankruptcy-protection filing.

A collapse would ripple across the “small and medium-sized businesses who rely on CIT to operate -- to pay their vendors, ship goods to their customers and make their payroll,” the New York-based lender said in internal documents obtained by Bloomberg News that make the case for its importance to the U.S. economy.

The Wall Street Journal reported over the weekend that the company had hired a top law firm to explore a possible bankruptcy filing.

Meanwhile, Financial Analyst Meredith Whitney pegs beleagured Wall Street giant Goldman Sachs as a winner, eyeing GS to pick up some business in the wake of underfunded federal budget items.

While Meredith Whitney's overall outlook is far less optimistic, this seeming glint of bullishness reflects on the overall bear-dom of the market: with everyone down, someone's gotta come up, and Whitney sees Goldman Sachs as the likely financial institution of the bunch.

Ms. Whitney predicted Goldman Sachs would post second-quarter results Tuesday above Wall Street estimates. She expects earnings of $4.65 a share, compared with the average analyst estimate of $3.48, according to estimates provided by Thomson Reuters. She set her 12-month price target on Goldman shares to $186.