CIT Has No Street Cred

The reason CIT didn't get a Government Bailout while AIG did was quite simply this:

CIT although engaged in reckless lending, primarily lending to small business's like garment workers on 7th Avenue, didn't pose any type of "Systemic Risk" to the economy. Come on, its only garment workers right? Unless your Blankfein's personal tailor, I suppose.

AIG in the final analysis created complex financial derivatives that they knew would ultimately blow up not only 7Th Ave but the entire global economic system.

AIG Financial Products had the sense to at least risk the entire financial system not just 7th Ave.

It was really the overt incompetence of AIG that precipitated the massive back stopping of AIG Debts.

That and the fact that Goldman was turning the screws on AIG CDS. If AIG had filed for bankruptcy, Goldman Sachs would not have collected billions on CDS insurance that they had written against AIG, because technically AIG was the CDS market! They would have had to try to collect like all of the other common losers in bankruptcy court.

Either way its a mute point for the Taxpayer. If AIG had filed for bankruptcy, we all would be living in caves and drawing how Supply Side Economics really works on the stalactites.

But....

...AIG got its bailout, Goldman got its billions, will make even more billions , and the Tax Payer got it as well.

So the lessen here is if you plan on screwing up make sure your screw up is systematic in nature, so that every one man, woman, and child is effected by your greedy incompetence. Don't make the mistake CIT did, which was to limit/narrow its stupidity to a smaller sub group of society.