Friday, May 15, 2009

The next load on the shitpile

All the other big insurers who, while not as criminally reckless as AIG, did manage to get their piece of the action. Now they are getting their share of the evil government plot to recapitalize Wall St at taxpayer expense.
Six major insurance companies have received preliminary approval to get billions of dollars in fresh capital as part of the government’s financial rescue program, a Treasury Department spokesman confirmed on Thursday.

The department said the Hartford Financial Services Group, Prudential Financial, Lincoln National, Allstate, Ameriprise and Principal Financial Group have all received approval for capital infusions, subject to terms still to be negotiated...

...several insurance companies took extraordinary steps to qualify for taxpayer money, which has become even more attractive as the economic environment has worsened.

For example, Lincoln National and the Hartford both bought up smaller banks to qualify as savings banks, which made them eligible for government support.

The insurers followed investment banks Goldman Sachs and Morgan Stanley, which received emergency waivers from the Federal Reserve to become bank holding companies last fall.

GMAC, the auto lender, and American Express, the credit card company, also have transformed themselves into banks to qualify for government support.

“You want the regulatory program to be as broad as possible,” said Scott E. Talbott, a lobbyist for the Financial Roundtable, a group of the nation’s biggest financial services companies. “If all it took was regulatory gymnastics, that expands the program.”
It all sounds so nice and easy.

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