Transcripts

"Two Ways to Play"-Kevin Depew of Minyanville

SUSIE GHARIB: With the failure of small business lender CIT Group on the horizon, many people are wondering why talks for additional Federal help failed. Tonight's "Two Ways to Play" has two takes on whether CIT is too small to save. Here's Kevin Depew of Minyanville and Minyanville's Kevin Depew.

KEVIN DEPEW, EXECUTIVE EDITOR, MINYANVILLE.COM: CIT Group, one of the nation's largest commercial lenders, is on the brink of failure after being unable to secure additional government backing. The obvious question is why isn't CIT, with more than a million small business customers, too big to fail? Well, the lesson in all of this is you can save one bank or as many as 10, even 20, but inevitably there will come a point when their lifeline just won't reach any farther and that's what's happened to CIT. It's unfortunate, but not every bank can be too big to fail. No, no, that's not the lesson at all. Let's get something straight. On one side, you have a firm like Goldman Sachs where executives sold $700 billion worth of stock even as they were taking in $10 billion in TARP money. On the other side, the small business lender CIT, which needed just $4 billion to keep the doors open. One firm, thanks to a little government help, just posted the richest quarterly profit in its 140-year history. The other is now doomed to failure. Does that make sense? Not at all. So what's the real lesson here? Too big to fail has been replaced by too connected to fail.