MORNING YAPS

*FDIC will likely take this bank over and this will be bad. Commercial real estate losses through the roof and the cascading likely to begin soon after. Hopefully none of you were foolish enough to have hung on to this baby.
CIT Group tries to calm markets with survival plan
CIT Group officials are becoming increasingly concerned that nervous business owners might attempt to draw down their credit lines or withdraw funds as the company faces significant challenges. CIT representatives met with lawmakers, regulators and government officials during the weekend to develop a plan that would allow the firm to work its way out of its liquidity crunch. The Wall Street Journal (7/13)

*finally some great policy out of the administration. Small business is the lifeblood of this country.
Sources: White House considers using TARP to aid small business
White House officials are considering making money from the Troubled Asset Relief Program available to small firms because they think small business is essential to the country's economic recovery, sources said. Although the focus of TARP has shifted a number of times already, directing rescue funds to small businesses to save jobs is a significant change from the program's original mandate. The Washington Post (7/11)

*they should have said this before they decided to back the fed and bail out the lifesucking forces from our system.
Analysis: Bank failures create challenge for FDIC
Columnist Peter Eavis says that the Federal Deposit Insurance Corp. needs stable, healthy financial institutions to take over the assets and liabilities of failed banks, but few solid banks are lining up. If financial institutions in questionable circumstances continue to acquire collapsed banks, "the regional-bank sector may struggle to evolve into a stronger beast," Eavis writes. The Wall Street Journal (7/13)

*a level playing field may be in order. Just how you get that is the big question. Personally, I think the stock market will right size GS. If GS were still to be considered the "premiere" trading firm/investment bank, then how did we get into this mess? They got bailed out by Uncle Sam through rescuing AIG. That means they were doing things they shouldn't have been and that they carry their fair share of this crisis. Don't be fooled here people. GS is going to struggle going forward by being a bank holding company under federal control. Look for GS to take themselves back to the "I'm only an" Investment Bank business sometime in 2010 so they can tell US to kiss my arse. Expect a sell off closer to end of week.
Analysis: Strong earnings by Goldman could spark public resentment
Goldman Sachs, the biggest investment bank in the U.S., is widely expected to report remarkably strong second-quarter earnings. Normally that would be good news, but analysts wonder how the public might respond, with the news coming in the depths of a recession and on the heels of a credit-market meltdown. "They are between a rock and a hard place," said Walter Todd, a portfolio manager with Greenwood Capital Associates. "How well do they really want to do?" Reuters (10 Jul.)

Stimulus projects under way, but U.S. joblessness keeps climbing
Contracts for big infrastructure projects are being handed out by the U.S. government, and some work has started, but steadily worsening unemployment statistics have triggered a public debate about whether President Barack Obama's economic stimulus is enough to bring the U.S. out of its downturn. "Everyone expects fiscal stimulus to immediately help out, but it never does," said Allen Sinai, chief economist at Decision Economics. "The bulk of the effects will come in 2010." Bloomberg (13 Jul.)

*complacency really is a bad thing
ECB policymaker cautions on economic recovery
Because concerns about an economic collapse have subsided, reforms of financial regulations are starting to stall, said Jose Manuel Gonzalez-Paramo, a member of the European Central Bank Executive Board. "One can perceive a certain tiredness of action in recent months, which has important risks," Gonzalez-Paramo said. "We should not distract ourselves with talk of green shoots because these will only be consolidated with reforms." Reuters (12 Jul.)

Report warns of 16% drop in U.S. commercial construction
Hit by rising joblessness and cutbacks in business spending, commercial construction in the U.S. is set to decline 16% this year, followed by a 12% fall in 2010, the American Institute of Architects said. "Why do you build new office buildings? You need to see job numbers pick up," said Kermit Baker, the institute's chief economist. "Why do you build new retail centers? You need to see consumer spending pick up." Bloomberg (13 Jul.)

Spain's recovery to lag behind others, ECB policymaker says: The economic recovery in Spain, where joblessness has doubled in less than two years, will come about much later than in the rest of Europe, said Jose Manuel Gonzalez-Paramo, a member of the European Central Bank Executive Board. "Recovery will be slower due to the amount of debt, weight of construction, the level of education of the unemployed and deficiencies in the labor market, which needs to be made more flexible," he said. Bloomberg (12 Jul.)