Six reasons to be outraged about CIT

Six very real reasons to be outraged about CIT (and Goldman and the Govt) and its role in the bailouts:

1. Goldman lent CIT money and is guaranteed $1 billion payout from the bankruptcy and the Treasury/Fed never bothered to make sure the taxpayer became senior to Goldman even though we bailed them out with more money when they were even more desperate and could have dictated any terms we wanted.
2. Goldman bet against the very company they’d just lent money to by buying what turned out to be worthless derivatives from insolvent market makers like AIG and Bear Stearns. All the payoffs on that bet will come directly or indirectly from the taxpayer’s pocketbook via the AIG/TARP/TALF/PPIP bailouts.
3. CIT paid out more than $100MM in dividends to preferred shareholders annually for the last five years -- more than a half billion dollars as it headed into insolvency.
4. CIT increased its common stock dividend from 13 cents per share to 16 cents per share in 2006 to 20 cents per share in 2006 and increased the common stock dividend AGAIN in 2007 despite all the signs it was heading into insolvency.
5. CIT paid its preferred shareholders more than $50MM STRAIGHT FROM THE PROCEEDS OF TARP before the company suspended its preferred share dividends six and nine months AFTER its bailout.
6. CIT paid its common shareholders more than $6MM STRAIGHT FROM THE PROCEEDS OF TARP before the company suspended its common stock dividends four months AFTER its bailout.

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