The recession that has been sweeping across the globe did come to a full circle. Didn’t it? The grip of the recession on the global economy, especially that on the U.S. had come down but not yet ended at all. A survey conducted by the National Association for Business Economics’ industry found that though the demand is stabilizing, but a small majority of the respondents said that the bottom is yet to be seen.
There is a conflicting version about the degree of the deleterious effect of the recession among the industrialists. While one school of thought advocates the theory that the U.S recession is abating with few signs of immediate recovery, another group simply advocates the opposite. The results for the industry demand still declining in the second quarter of 2009 but the rate of decline has reduced considerably.
While the sector that showed tremendous recovery prospects is financial services with the index bench mark reading at +15, transportation, communications and information sectors fared poor.
The recession in US that started during December 2007 might be considered the longest one since the Great Depression that wreaked havoc across the globe. The optimists in the financial business look forward to see a recovery during the second half of this year but going by the present trend, the recovery process may take more time and further it is likely to be sluggish. But one can find solace in the rate at which profits are shrinking is slowing.
CIT in trouble?
Last Sunday saw hectic activity that culminated in a deal in which the CIT Group Inc's board signed off an agreement for $3 billion and it is hoped that this move will help to stave off bankruptcy. The bondholder group, which comprises Pacific Investment Management Company (PIMCO) and some other top CIT holders, is expected to provide the financing with a 2 1/2-year term to ease out the situation.
There is a conflicting version about the degree of the deleterious effect of the recession among the industrialists. While one school of thought advocates the theory that the U.S recession is abating with few signs of immediate recovery, another group simply advocates the opposite. The results for the industry demand still declining in the second quarter of 2009 but the rate of decline has reduced considerably.
While the sector that showed tremendous recovery prospects is financial services with the index bench mark reading at +15, transportation, communications and information sectors fared poor.
The recession in US that started during December 2007 might be considered the longest one since the Great Depression that wreaked havoc across the globe. The optimists in the financial business look forward to see a recovery during the second half of this year but going by the present trend, the recovery process may take more time and further it is likely to be sluggish. But one can find solace in the rate at which profits are shrinking is slowing.
CIT in trouble?
Last Sunday saw hectic activity that culminated in a deal in which the CIT Group Inc's board signed off an agreement for $3 billion and it is hoped that this move will help to stave off bankruptcy. The bondholder group, which comprises Pacific Investment Management Company (PIMCO) and some other top CIT holders, is expected to provide the financing with a 2 1/2-year term to ease out the situation.
The $3 billion financing plan will be backed by CIT's remaining unsecuritized assets, which likely exceed $10 billion, the second source familiar with the matter said.
The problems of the CIP can be tracked back to the sub-prime crisis when its Chief Executive Jeffrey Peek decided to expand its activities into sub-prime mortgages and student loans which are lucrative and highly profitable but fraught with danger and added risk.
As per the independent research firm CreditSights, CIT has about $40 billion of long-term debt. It is worth to note that about $1.1 billion of debt will come due in August, followed by about $2.5 billion by the end of the year.
