CIT Group Could Be Saved

The Wall Street Journal leads and the Washington Post tops its business section with the possible government rescue of CIT Group (CIT), one of the country's biggest lenders to small and midsize businesses. The Post says that while the firm's failure would probably only have "relatively modest consequences" for the overall financial system, it could "crumple" thousands of companies that rely on it—making its rescue a rallying cause for the small-business community. Some administration officials would rather leave CIT alone, to show not only the strength of the economy, but also that the government simply won't rescue every troubled firm. CIT already did receive $2.33 billion of the Treasury's Troubled Asset Relief Program funds in December, says the WSJ. For months, though, it has been seeking aid from a Federal Deposit Insurance Corp. program that guarantees newly issued debt., but has been unable to secure it because of its perceived financial instability.

The New York Times leads its business coverage with the news that Obama's chief auto adviser, Steven Rattner, is calling it quits. Rattner, who directed the restructuring of General Motors (GMGMQ) and Chrysler has been "under a cloud" since it was disclosed earlier this year that his former Wall Street firm, the Quadrangle Group, made payments to middlemen that helped it secure state pension business. While the investigation into the scandal has intensified recently, it's not entirely clear that he's stepping down because of that or because he feels that his work is done now that Chrylser and GM have emerged from bankruptcy.

The Washington Post takes a look at what it calls this spring's "mystifying" run-up in oil prices. While not as steep as last summer's rise, the increases came at a time when demand was low, the global economy was flagging, and the world's oil consumers and producers both had excess supply. The paper says that many analysts attribute the "lurches in price" this year to one factor: speculators—"those investors who have no commercial use for oil and never plan to take delivery." "Here we go again," said a commissioner at the Commodity Futures Trading Commission. Last week, the CFTC said it may consider measures to curb speculation based on data that shows that much of oil trading is controlled by only a few investment banks and trading firms.

McGraw-Hill is reportedly seeking to sell Business Week, according to the New York Times. News broke yesterday that McGraw-Hill (MHP) had hired Evercore Partners (EVR) to seek a buyer for the publication. Just how much interest there will be in purchasing the magazine is questionable, the paper says. "There could be buyers, if the definition of a buyer is someone who's willing to take it off their hands," said one analyst. Business Week has been hurt by the plunge in advertising interest that has plagued most of print media, but as a financial publication, it has been particularly hard-hit. "In fact," the paper says, "they entered an advertising slump three years earlier than the industry as a whole."

The Financial Times reports that Goldman Sachs (GS) executives sold almost $700 million worth of stock last September, following the collapse of Lehman Bros., according to filings with the SEC. "The surge in selling among Goldman partners, at a time when the US government had thrown a lifeline to Wall Street, is likely to draw criticism from lawmakers on Capitol Hill," the paper says. In an eight-month period, Goldman partners sold more than $691 million in company stock. For the comparable period between September 2007 and April 2008, when the average share price was much higher, Goldman partners sold about $438 million in stock.

According to the WSJ, Microsoft (MSFT) has provided new details of its plan to provide a free, Web-based version of its Office software. It's another signal that the company's once-reliable model of selling boxed software is endangered—largely due to its rival, Google (GOOG). The free online offering should be ready in the first half of next year. Google's vice president of engineering called the announcement "a powerful validation" of the Web and remarked, "I think we will look back on today as a phenomenal day when the Web has won."

And finally, according to the Web site of the Federal Bureau of Prisons, via Bloomberg, Bernard Madoff has been transferred to the U.S. penitentiary in Atlanta—a far cry from his $7 million Manhattan apartment—to begin serving his 150-year prison term.