Tonight, the WSJ is reporting that Treasury looks to lose it's entire $2.3 billion TARP investment in CIT, and that Treasury Secretary Geithner, who was on a trip in Abu Dhabi, was "actively" involved in the discussions, and that CIT looks like it is heading into bankruptcy.
Treasury didn't give CIT the 23A exemption, that they expected. Of course, Goldman received theirs along with GE. And it was more than liberal. You can read it below..
Why give an exemption to CIT, when you can firesale CIT's assets to your friends at "bubblevision" and Government Sachs? After all, Goldman is "fully hedged" on their CIT exposure.
Why not pay them twice again, just like they did with AIG?
Goldman's Section 23A exemption
Tonight ZH, shows that Goldman Sachs has also received an exemption for calculating their Value at Risk (VaR) until the end of 2009: (still more favors for Goldman--wtf!)
GSGI has requested that (1) through December 31, 2009, GSGI and Bank be permitted to use certain Value-at-Risk ("VaR") models approved by the SEC... to determine their capital requirements for specific risk under the Market Risk Rules; (2) through December 31, 2009, GSGI and Bank be permitted to use methods approved by the SEC to determine their capital requirements under the Market Risk Rules for those trading assets, including distressed debt and restricted stock investments that the SEC did not require to be included in the VaR-based models of GSGI and Bank; and (3) GSGI be allowed to use methods approved by the SEC to calculate risk-based capital requirements for its nonfinancial equity investments that are subject to the Board's Credit Risk Capital Rules.
As ZH questions,
"Many readers raised questions of how is it even remotely possible for the company to have a VaR in the low-mid $200 MM ballpark, yet to post a record number of $100MM+ trading days in Q1; Zero Hedge is willing to wager that the upcoming 10-Q release will demonstrate another record number of $100MM+ days in the just closed quarter as well. How is that possible?"
I suppose its possible because they are Goldman Sachs.