Here Come the Insurance Companies for TARP money

Now insurance companies are lining up for TARP funds:

Prudential Financial Inc. and Hartford Financial Services Group Inc. are among six insurers granted access to U.S. aid as the government moves to shore up an industry battered by investment losses.

Hartford won preliminary approval for $3.4 billion in capital from the Treasury’s Troubled Asset Relief Program, the Connecticut-based insurer said yesterday in a statement. Prudential, Allstate Corp., Principal Financial Group Inc. and Ameriprise Financial Inc. also are eligible for funds, said Andrew Williams, a spokesman for the Treasury. Lincoln National Corp. said it may receive $2.5 billion.

Life insurers have clamored for six months to get into a program that the nation’s biggest banks are trying to flee to avoid government restrictions. Insurers need the money to quell doubts about whether they can pay claims and retirement stipends after falling stock and bond markets depleted capital.

One has to wonder who else will show up at the taxpayer door with this news. They claim it is to reassure claimants and investors but to me this news puts focus on yet another sector where one didn't suspect there was a problem. Once again we hear too big to fail as the justification.

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If the are too big too fail

then they are too big period.
If there is a company big enough to drag down the economy on its own then it is a monopoly and needs to be broken up.

Why does it all keep coming back to the repeal of Glass/Steagel?

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Saw a letter to the editor in the Oregonian

A retired banker wrote in claiming that back when he was a banker in the early 1970s, interstate banks were illegal.
Anybody know what he was talking about?
Executive compensation is inversely proportional to morality and ethics.

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Maximum jobs, not maximum profits.

McFadden Act

1927 McFadden Act.

It was repealed and interstate banking "gone wild" in 1994 with the Riegel-Neal Interstate Banking and Branching Efficiency Act of 1994.

That's when these monstrous mega banks really took off...

but they have been chipping away at regulations for years...this is one of the big "mega mergers" in the 1980's where the layoff/arbitrage became routine and has just escalated from there.

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One wonders what accepting

One wonders what accepting TARP funds will do to their A.M. Best Ratings? A sound precondition for allocating TARP funds would be full transparency as to the quality of their holdings.

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has anyone

been told to open their books? Banks? Investment houses? Auto manufacturers? ... now insurers?
No ... all this freakin money is going into a black freakin hole.

The question that needs to be asked is :
Who are the counter parties to all of this?

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