As several media outlets report today, the U.S. Treasury has granted preliminary approval for some insurance companies to receive TARP money. Among the lucky winners of $22 billion are some of the largest insurance companies:
Prudential Financial Inc.;
Hartford Financial Services Group Inc.;
Lincoln National Corp;
Ameriprise Financial Inc.
These companies have applied back in April for those funds and are now deemed eligible and do really seem to need them. And there are hundreds more in the pipeline and being reviewed by the Treasury.
So why indeed are they getting money? Supposedly, because they need it but why is that where is the connection between the banks and the insurance industry?
According to the Washington Post:
The money could shore up the life insurance industry, which plays a major role in the economy and has been weakened by the financial crisis. In addition to paying death benefits, life insurers deliver retirement income in the form of annuities. They are big investors in corporate bonds and commercial real estate.
So the insurance companies have heavily invested in CRE and since that market is not doing very well, as I wrote yesterday, they are running out of money to pay the retirement incomes. That’s another social disaster in the making – thank you very much you greedy, idiots of executives.
Let me recap then:
The banks are insolvent, if it were not for the money the government is pumping in.
The auto industry is insolvent, if not for the money the government is pumping in.
The insurance industry is insolvent, if not for the money the government is soon pumping in.
This looks a helluva lot like the WHOLE FINANCIAL SECTOR IS INSOLVENT and would have collapsed long ago if not for the money being pumped in by the government.
Guess what, it would be cheaper to pay every U.S. citizen over 18 years a government guaranteed monthly income and that would actually solve some problems and would not be putting money down that bottomless pit formerly know as financial system.