Thursday, July 16, 2009

Thursday Premarket

AlphaNinja - Stock futures are pointing to a slightly lower open for US markets, as the government refuses to rescue CIT weighs on people's minds, as well as the need for a breather after some big gains. Jobless claims decreased more than expected, lending some support to higher stock prices this morning.

A TV network's dream -->> Tom Watson takes the lead in the British Open...

In a surprise move, the government will NOT rescue CIT Group
"The cost of protecting CIT debt from default rose 2 percentage points to 36 percent, or $3.6 million, upfront and $500,000 dollars a year, according to CMA DataVision prices for credit-default swaps at 11 a.m. in London. A contract insures $10 million of debt for five years."

....And the WSJ thinks that letting CIT fail is a grave error.-"Without CIT and companies like it, small businesses in the U.S. -- producing half of this nation's gross domestic product -- would be suddenly caught in a financing crunch at a time when the nation needs small businesses to hire workers, fuel production and lead the economy out of recession."

Oh the horror. As the ultra-short-term commercial paper market shrinks, companies have to resort to raising real money.

NYTimes on maintaining the Fed's independence

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