buzzards circling the kill they arranged.

Repost:

NEW YORK (Reuters) - CIT Group Inc is in talks with JPMorgan Chase & Co and Goldman Sachs Group Inc about short-term financing as it looks for ways to avoid bankruptcy, a source close to the company said on Friday, sending the lender's shares and bonds up.

CIT -- a 101-year-old lender that services nearly one million small and mid-sized businesses -- is in search of $2 billion to $3 billion of financing, according to the source, who declined to be identified because the talks were private.

Is it to early for thread music?
Chumbawamba - Tubthumping

It covers both bases, drinking and the economy (pissing the night away) Go green shoots!

CR-

In any case it should cause the stock to remain above .00 (where it really should be) forever. Look at GM...need I say more.

Ciao
MS

I posted this link in the last thread, but it is on-topic here:

Urban Outfitters Says It Would Consider Lending to Its Vendors

Urban Outfitters Says It May Mull Lending to Vendors (Update1) - Bloomberg.com

Snippet:

July 17 (Bloomberg) -- Urban Outfitters Inc., the clothing and housewares retailer, may consider providing short-term financing to some of its vendors should CIT Group Inc. collapse.
...
About 7 percent of Urban Outfitters’ vendor base gets short-term financing from CIT, according to the chain’s chief financial officer, John Kyees. The Philadelphia-based retailer has been in talks with Wells Fargo & Co. about taking over its short-term financing and also has the cash to pay vendors directly if needed, Kyees said yesterday in a telephone interview.

“We look at it as an opportunity because the money that we have invested today is in very secure paper that’s really getting not much of a return,” Kyees said. “If we took some of that and used it to factor some invoices, we could probably pick up some income.”

Drowning is also a "fluid situation"

we could probably pick up some income.

we're all lenders of last resort now....

My head is spinning. Urban O sells a pair of socks to me.

I can't afford them. So it gives me money to take them away,
in the hopes that I will sell them to someone else and then
I'll pay them.

Gee that sounds familiar. Flippers and banks and houses.

Why not just give the damn socks away?

[Urban Outfitters Inc., the clothing and housewares retailer, may consider providing short-term financing to some of its vendors should CIT Group Inc. collapse]

21st century sharecropping.

scratch that...

Wait. Which way are they providing financing: To their suppliers or to their resellers.

JP, actually it seems like URBN is contemplating the opposite of vendor financing...

The derogatory term "Vendor financing" refers to somebody loaning money to somebody so that the borrower can purchase goods from the lender. Thereby they artificially provide a market for their goods, with the demand produced by their financing.

In this situation, URBN would essentially be paying its suppliers up front.

At least that's the way I'm reading it....could be wrong...somebody chime in here...

"lawyerliz (profile) wrote on Fri, 7/17/2009 - 3:16 pm
My head is spinning. Urban O sells a pair of socks to me.
I can't afford them. So it gives me money to take them away,
in the hopes that I will sell them to someone else and then
I'll pay them.
Gee that sounds familiar. Flippers and banks and houses.
Why not just give the damn socks away?"
I thought the clip meant that they were going to finance their suppliers. They probably already have a credit card to finance their customers.

"In this situation, URBN would essentially be paying its suppliers up front.

At least that's the way I'm reading it....could be wrong...somebody chime in here... "

When do we start paying China, up front?

My head is spinning. Urban O sells a pair of socks to me.

Why not just give the damn socks away?

Just read a book about women's work in the Shetland Islands for the past 200 years. The main industry was wool & knit products, as far as women were concerned. They had to buy the raw wool from a sheep outfit, make it into a finished product, and hope the stores would buy it for resale elsewhere. If they couldn't afford to buy wool, the middlemen would front them wool, but never cash. And of course when it came time to sell the finished product, the market had a way of shorting the women.

They would often give the socks away, in hopes that the shopkeepers would renumerate them when there was more demand....usually didn't happen.

So they want to buy some wool to make the socks, and the sheep farmer can't afford
the sheep anymore, so they pay the sheep farmer. But they have to pay the sheep farmer
anyway. So they pay the sheep farmer sooner? Before the new lambs are born? Sooner
than the 90 days out they would have paid?

I don't understand.

@ShortCourage: That will teach me to read the article first. I think you're right. I saw "vendor" and "financing" and had the knee jerk reaction.

cit=lehman ge=aig

Urban O sells a pair of socks to me.

Gee that sounds familiar. Flippers and banks and houses.

Sounds more like any credit card transaction.

I could see Urban O doing this in exchange for equity in said vendors.

Or someone is getting fleeced!

AIG’s European Derivatives May Take Decades to Expire
AIG’s European Derivatives May Take Decades to Expire (Update1) - Bloomberg.com
Bend over American taxpayer, however many of you are left.....

Nope scone.

I love bookstores. I love to wander around them.

I like to try on clothes.

People like to go to mkts.

I want to see the furniture I'm buying. Tomorrow the curtain lady
is coming with samples.

" scone (profile) wrote on Fri, 7/17/2009 - 3:26 pm

The death of CIT should push even more suppliers onto the internet. If they survive at all. Clothing is definitely going there anyway, along with books, housewares, and furniture. The malls are toast."

It's amazing what's on the internet. I was looking for raw hemp fiber to reinforce stucco, and you could place wholesale orders in China for the stuff. However, I didn't need THAT much hemp;)

Reminds me of refineries & pipelines. If they stop or go dry, isn't it a huge pain to restart them?

Maybe URBN is afraid the suppliers will go under without any kind of grease in the pipeline.

"The malls are toast."

For goods, sure. But after the reset in CRE values, I can see them being more service based.

Do you breathe deeply when you stucco?

Joanna, what you just read is the entire reason why most of our ancestors showed up in America. Nothing like shearing sheep, shafting the crofters, underpaying for piecework, enclosing the commons, and add a little disease to the mix.

It is one of the reasons when folks start talking about yeoman farmers being the absolute bedrock of a society I start laughing.

Small and undercapitalized is one harvest away from being a sharecropper.

Now, there is a reason why there are so many gentleman (and gentlewoman) farmers- usually called an independent paycheck supporting their agricultural enterprise.

I have zero nostalgia for turning dirt to make a profit, milking a cow, or doing a harvest.

It was brutal, stupid work, with the marginal players exploited because they were very marginal indeed.

There were a lot of rural poorhouses too, in early industrial England.

Someday this war's gonna end...

Did CNBC provide a source for this information? Was it another Roubini presentation?

I repeat that now I honestly, non-snarkedly think it would have been better to
fly the frigging helicopters over poorer areas all over the US and drop money.

It couldn't be worse than what they did.

speaking of no money... no bear chits, either

Philadelphia Suspends Payments to Vendors
The government of the nation's sixth largest city by population has stopped paying its vendors and suppliers, citing a cash crisis.

Philadelphia Mayor Michael Nutter on Friday blamed the drastic move on the failure of the Pennsylvania legislature to act on his request for authorization to raise the city sales tax and change the formula for the city's contribution to its employee pension plan. Mr. Nutter said these items are necessary to help close a projected city budget deficit of $1.4 billion over the next five years.

After the black plague the yeomen did pretty darn well until they
overpopulated again.

" lawyerliz (profile) wrote on Fri, 7/17/2009 - 3:31 pm

Do you breathe deeply when you stucco?
"
The real question is do I inhale

Everyone running their own small farm is the antithesis of division of labor.
It's a major step backward in efficiency and the fact that it's even discussed is a strong indicator of the dysfunction of the finance system.

Many small farm communities in England would share a plow team and town bull. Teams of workers would go from farm to farm to harvest and make hay. The US model is that everyone needs a John Deere, even for a pocket farm, because you can't count on help from the neighbors.

DIP financing of a financial structure? Is this a way to get into a new venue of lending with usurious rates by using CIT as a sock puppet / passthrough? I.e., are Morgan and Goldman just using this to do small commercial lending at DIP rates? Because I don't otherwise see how DIP of a financial structure is going to hold up. CIT seems way too far down in the death spiral to be saved, without some kind of secret "Obama holds Lloyd Blankfein's children hostage" or "Let's rob America AGAIN" angle, DIP will just be avenue for financing the bankruptcy litigation.

CONJURE'S READING LIST

"The Family," by Jeff Sharlet, Harper Collins, 2008.

It's pretty much when yeomen became a class...small landowner/farmers. And also when richer people got used to paying cash for labor, because the former serfs could hold out for better terms and weren't bound to a landholder anymore.

I repeat that now I honestly, non-snarkedly think it would have been better to
fly the frigging helicopters over poorer areas all over the US and drop money.

Beats the current situation where Helicopter Ben drops money over Wall Street.

We were in Poland 2 years ago. They still farm small strips of land by the house. They all were using horses for tilling also. The water was hand crank wells. It was like visiting America in 1880. Some of the houses had the livestock barn built right on to the house.

CIT should keep on spending money to keep from going bankrupt.

At some point Goldman is gonna start eating itself.

Ourumbourous? (sp?)

Thank you mp!!

Heard an interview with that guy and spaced looking for the book until you reminded me. I'm on hte hold list at my local library now

Garden-farmer! That's me.

wow. the amount of misdirection and outright lying taking place in the media these days.

at any rate, is liquidation an option with this one? please tell me liquidation is an option. we have to re institute failure in this country.

Yeoman farmers are the bedrock of a society. The societies you're talking about were dysfunctional. Their systems of rule collapsed wholesale shortly subsequent to the period you're talking about.

Sorta like that state government you work for.

I htink the difference comes between farming to feed a family, with some spare to sell to the community...and farming (or any agricultural pursuit) for profit. Profit-making is strip mining most of the time. No concern for sustainability on all levels.

You know, if the macro parasites who styled themselves noble, didn't feast on the farmers, and
make war in the fields, and take the best beast, it might have been ok.

There were too many people pre plague and there are too many people
now to support. Non intelligent design. Power laws.

Norman Chan, Replaces Yan, Vows to Maintain Yuan

Bloomberg poetry

nova, they were just off the grid...ahead of USA doomsteaders by a decade or so

i read an article last year about the slow food craze in San Fran, and how all these folks were growing food in their backyards. the author profiles a couple who are ooh-ing and aah-ing about how healthy the food is, how much they enjoy watching the food grow. how much the enjoy not buying from the big box grocers. then the couple talks about their slow food farmer for hire.

got to love san fran.

Growing food & animals for fun is not the same as growing them to save money.

I've had to take a step down from my yeomanry dreams. A milk cow is a luxury item. A flock of chickens is cheap and easy protein. No mo' moo, and a bigger flock for me this year.

We still raise beef, becuase we have cheap hay & easy grass, but htat will change as times get tougher.

Peasant life, here i come!

"the author profiles a couple who are ooh-ing and aah-ing about how healthy the food is, how much they enjoy watching the food grow. how much the enjoy not buying from the big box grocers. then the couple talks about their slow food farmer for hire."

Ah yes the vaunted SF limousine liberal.

" Kung.Fu.Panda (homepage, profile) wrote on Fri, 7/17/2009 - 3:47 pm

The AIG swaps to European banks allowing the banks to have less of other forms of capital is IMO the single biggest fraud of the CDS era. European banking regulations allowed the banks there to achieve more leverage by claiming AIG's CDS as part of their capital. These banks are insolvent, but the AIG deal made them appear as if they had capital. Now, the US taxpayer could be on the hook for the reckless lending by European banks. The Fed swap lines extended to Euro central banks a couple of years ago was to allow the ECB's to organize to take over the problems from AIG. What's happening now is Euro banks cancel their CDS and their central bank injects capital to keep them afloat. What needs to happen is the rest of these CDS's need to be cancelled and the losses absorbed by the Eurozone central banks rather than the US."

I presume you're referring to this:
AIG’s European Derivatives May Take Decades to Expire (Update1) - Bloomberg.com
Kinda' sucks, huh?

Nice ramp in the market right after TNX closes.

wow. the amount of misdirection and outright lying taking place in the media these days.

It's easier if you define that big ball of behavior as a separate entity, sort of like the Krell in Forbidden Planet.
The System works to preserve itself in creepy ways.

Was not there an article in the times recently that sort of said that most food borne illnesses have their source in Chickens?

Concur with MS/Byz re DIP on CIT.

shame on you for your cynicism.

As to Heinlein, Starship Troopers was ground-breaking in its time. A real hero who wasn't American. It turned some things on head.

Yes.

Here's a quote from the Bloomberg piece:

"Royal Bank of Scotland Group Plc, Banco Santander SA, Danske Bank A/S, Rabobank Group NV and Credit Agricole SA’s Calyon are also among banks which purchased the swaps, AIG said in a presentation in February pleading for its latest bailout. The banks could be forced to raise $10 billion in capital if AIG were allowed to fail, according to the document."

Force them to raise it or fail! Those banks are the responsibility of their respective national financial authorities. IIRC RBS is now essentially owned by the UK government.

The European banking system is yet another massive fail being held off by government obfuscation.

"Anyone who wants to play this game really needs to read up about the Icelandic Commonwealth and the dynamics of the gthorthcies before they start."

I'm sure it applies well to homogeneous cultures of a few hundred thousand separated by hundreds of miles of water from the nearest neighbor.

Why byz, ease up on the cynicism- I may be on my way out of government for a while should next's weeks interview pay out. After all, money is still flowing and working right now, isn't it? The market still opens at 3, doesn't it? Metals are still mostly (well, viz jesse not really) freely traded and available? Gee, and when I get a new job, will you still look on with that bitter tinge? State Government is not going anywhere fast, just very slowly. As a lot of stuff is federalized, there just will be less scope for it. But that doesn't mean going away, not by any stretch of the imagination. Sorry folks, last fall most likely was the TEOTWAKI moment of my lifetime. Now it is simply watching a new economy begin to assemble after more or less damage from this point forward. The King is dead- All hail the King!

Every bit of employment is simply taking some time and trading it for resources.

One of the problems with the yeoman was being squeezed by the local gentry until they collapsed into sales to the local gentry.

The serfs were done in England fairly early on compared to the rest of Europe, but that forced agribusiness into being a business, with "scientific management (17th and 18th century style;-}. And businesses reward efficiency- and the gentry assured through taxation and small wages that the returns to small farming just were not there.

Someday this war's gonna end...

HollywoodHack (homepage, profile) wrote (in reply to...) on Fri, 7/17/2009 - 3:58 pm

I'm sure it applies well to homogeneous cultures of a few hundred thousand separated by hundreds of miles of water from the nearest neighbor.

I'm sure you'll find a way to be a smartass with plenty of criticism and no useful contributions right up until someone knocks your head in with a rifle stock. The point is?

My carriage awaits.
Pun as always, Liz.
later.

Market, State Unemployment, Fed Balance Sheet

"The Fed can inject money into the economy in still other ways. For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt. Potentially, this class of assets offers huge scope for Fed operations, as the quantity of foreign assets eligible for purchase by the Fed is several times the stock of U.S. government debt."

• BB's 2002 'deflation' speech

Don't you get it? Bailing out Europe is just another fun project in BB's "101 fun economics experiments" chemistry set.

Who are we to get in the way of the good times? Enemies of science!

Cinco-X, don't get me started on the chicken farms. I mentioned this before, grandparents owned 150 acres...50 acres set aside for me. Tyson bought up all the surrounding land, put in chicken farms, and then the stench moved in. When they finally sold out, the property price had gone to pot. Wonderful land, turned to shit.

Yep, Chicken shit is "hot" and needs to be composted before use as fertilizer.
Unless, of course, you are looking to "nitrogen burn" your plants.