CIT Twists in the Wind
Research for Online Investors

by John Dalt

7/16/09

CIT is left to twist in the wind; the administration has rejected any bailout or guarantee of debt issuance through the FDIC.  As I covered Monday, CIT was asking for the same FDIC backstop for its debt that GE receives.

The problem for CIT is that GE’s CEO, Jeffery Immelt, gives a lot of money to Oh! Bama and serves as an advisor.  NBC is the next best thing to a private propaganda machine for the White House. GE is the biggest user of FDIC backing on issued credit.  GE accounts for over 20% of all debt guaranteed by the FDIC!

Private sources may come to the rescue of CIT.  CIT dropped 75% this morning.  You can buy a share for $0.41; the shares have traded as high as $13 in the last 52 weeks.  This may be more dangerous than slots at the casino.  Do you feel lucky?

CIT is learning a hard lesson, what I call a John Galt moment.  Executives are willing to let government go unchecked, and seek to gain an advantage over competition.  As the government becomes larger and larger, only the favored are bestowed with gifts.  This is what we have become.  A nation state, run by a bunch of gangsters.  Bailouts for the politically connected.  Exclusions from laws for some while the rest of the “unwashed” toil to pay the taxes.

A few questions:

• D o members of congress live under the laws they pass? No. They exempt themselves. You cannot sue a congressman for sex discrimination in the office.
• Do congressmen collect social security? No.  They have a special retirement for life, after serving ONE term.
• Do congressmen insert line items into bills that mandate spending money with a company?  Yes.
• Did that company happen to contribute to the congressman’s last campaign?  Duh
• Did Goldman Sachs benefit from the TARP program that their former CEO, Hank Paulson directed?  Yes, GS received over $12 billion through the back door from AIG on credit default swaps.
• Add your favorite example and send it to me at feedback@galtstock.com
• Watch this video.

The leftists are working hard to guarantee health coverage for every resident in our borders.  What started in the 1970’s as a law to force hospital emergency rooms to treat anyone that showed up at their door is now a human right.  We now are expected to take responsibility for everyone that can make it to our borders.  Lew Rockwell has a great article, “Government Creates Human Suffering.”

If you have not called your congressman or senator yet, you better, before you are stuck with another bill.  The house democrats have a new plan to tack on an 8% payroll surcharge if you do not provide health insurance to all your employees.  This fee will be used to provide health insurance for the poor.

If you are “rich”, you will face an additional 5.4% income surcharge.  How long can they keep adding taxes to the “rich”?  What a great plan, increase taxes on the producers to provide free health insurance for illegal aliens.  If you lived in a hellhole, without basic services, why wouldn’t you come to Amerika?

When will he run out of other people's money?

Come to think of it, what is America going to look like in a few years?  I toasted my daughters graduating class from college last spring with, “We have failed, the U.S. is not the same we inherited.  We have become politically correct; we have let our independence be eroded by politicians.  We leave it to you to take the country back.  Good luck.”

The economy may be recovering, we do not believe it, Harley Davidson (HOG) is cutting 1,000 jobs after second quarter earnings plunged 91%.  HOG expects to ship 212 to 228 thousand motorcycles this year, 16% less than previously forecast.  HOG is currently trading at $18.95, up 8.5% from closing price yesterday.

The market closed up at 940 on the S&P 500.  If it can close above 946, get your money out of the way for a push to 1000.  Shorts could take a licking.  This is option expiration week; extreme movement in prices can be expected as market movers try to get out of positions.  We will see what tomorrow brings.

Frankly, I am puzzled.  Our Swingtrader is set up for great profits.  Why not join us?  Enter a couple trades a week in the morning before you go to work.  I do all the work, you make the money!  Relax and enjoy the certainty of 85% winners, and it is guaranteed.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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