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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (27841)	8/22/2007 11:36:31 PM
From: Spekulatius	Respond to of 79156

regarding CIT - CIT has in addition to the aircraft lease payment notes (6 bill), a bank credit of 7.5 bill which you mentioned and is in their 10Q. So if they have problem rolling the CP you would think that they could use the bank LOC and also have lots of cash from the aircraft lease payments notes they issued which is a long term 2012 note. Rich, you are correct. they could use the bank LOC but i think they want to avoid that. For one think bank debt tends to be more expensive but even more important, it does look like a measure of last resort. As a financial entity, the reputation is important to CIT, so I think they will try to avoid using the LOC or at lest use it as little as possible.

To: rich evans who wrote (27841)	8/22/2007 11:50:31 PM
From: rich evans	Read Replies (1) \| Respond to of 79156

CIT has also already taken their hit on their mortgage business and mortgages. The amount was 765 mill about and this was after netting the reserves of over 200 mill. So the total markdown was about 1 bill.This was announced way back about July 17. So I doubt that their will be any more writedowns. CIT said they will continue to operate mortgage business and sell it when they can do so at reasonable prices. So like you I took a position. Paul did also but none of us I think took a huge position or bet the farm. So far so good. The CEO recently bought shares after earnings announcement - about 12000 or so. To do so he could not have inside material info like a buyout etc. Anyway looks favorable. Tyco IPOd CIT for 4.5 bill after buying it for 9 bill. This was all about 5 years ago. If you count intangibles CIT book value is 35 dollars. Right now its value is about 7 bill even. Would you buy more if it looks like all clear in the CP market? $40 is still cheap. Rich