Surprise: Tim Geithner Screwed the American Taxpayer on CIT Deal
Timmy's face is hereby banned from Jr Deputy Accountant
Pedo Geithner is again recycled for your entertainment
Case in point? CIT Group. Once again, the white knight who stepped in to save the company--the U.S. taxpayer--gets completely hosed.
It didn't have to be this way, says Prof. Black. And the man responsible is Treasury Secretary Tim Geithner.
Peter Gorenstein: Another one of the nation's largest lenders has filed for bankruptcy. On the brink for months, CIT filed for Chapter 11 protection on Sunday.
The prepackaged plan allows CIT to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses. The plan keeps CIT's operations alive and makes it possible for the company to exit bankruptcy by year's end.
But here's the bad news: While senior debt holders will only lose 30% of their investment, we, the U.S. taxpayer, will lose the entire $2.3 billion we lent the company this summer.
William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. "We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers."
Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.
That's lame. Is Black writing a book? Oh who cares, keep talking.
This doesn't reflect well on Mr Geithner. Yet again.