Bi-Czar Breakdown Causes CIT's Downfall

WSJ reported on Wednesday that embattled lender CIT Group offered its bondholders a debt exchange in which soon-to-be maturing debt would be replaced with new CIT asset-backed debt set to expire further down the road. In addition, bondholders would obtain almost all the equity in the firm. Late Thursday CIT management also asked their bondholders to accept a prepackaged reorganization deal in the case CIT decides to file for chapter 11 bankruptcy. CIT Group is a major lender to small and medium sized businesses, one of which is Dunkin Donuts. (Police Chief Joe) Some analysts suggest small businesses will have a difficult time securing credit with new lenders in this difficult economic environment.

So it looks like it could be chapter 11 either way. If the bondholders do not accept the debt exchange they'll likely be forced into chapter 11; and even if they do accept the offer, the deal includes a possibility of bankruptcy anyway. (Joe Donut like either option.....or should we say Dozen like either option)

So why wasn't CIT Group saved by the government? No taxpayer lifeline? Apparently the Bailout Czar didn't feel CIT was too-big-to-fail like so many of its bankster counterparts? Maybe the Bailout Czar didn't feel CIT posed systemic risk? Maybe it's simpler than that. Maybe the Bailout Czar felt pressure from the "Health Czar" or the "Zero Trans Fat Czar" to thin-down America? This might require intervention from the "Law Enforcement Czar" to lobby on CIT's behalf.

But let's back up for a minute. (Joe policeman spots donut shop in rear-view mirror) Where was the "PR Czar" at the time this story was leaked to the public? This kind of information should not be allowed to surface at a time in which the economy is still considered fragile. This breakdown by the "PR Czar" clearly indicates the need for more oversight czars.

Let's dip down into the story a little deeper (Joe donut in milk)

Debt Side:

Where was the "Loan Ratification Czar" when CIT group was offering these loans to small businesses? And why didn't the "Balanced Loan Portfolio Czar" inspect the books to see how diversified they were? Why didn't the "Debt-Roll-Over Czar" intervene with the "Public-Offering Czar" in an effort to raise sufficient cash before these bonds matured?

Asset Side:

After the FASB changed the accounting rules to allow banks to value their assets at whatever price they wanted to, why didn't the "Non-Performing Asset Czar" and the "Mark-to-Market Accounting Removal Czar" get togther and help CIT inflate their assets just like all the other banksters?

In conclusion, CIT Group has fallen victim to not only the US bailout system but they've also fallen victim to the outdated single-tier czar program. (Joe short straw) What we need is more czar oversight in the form of a two or three tiered czar program to help flegling companies like CIT Group stay afloat (Joe, broken off piece of donut in milk) rather than going under. (Joe, broken off piece not floating anymore) If there isn't a new system implemented soon, you'll see a HOLE lot more small businesses get Krispy Kremed.