The Treasury Department granted preliminary approval for TARP taxpayer money to be invested in six insurance companies. They include Hartford, Prudential, Allstate, Ameriprise, Lincoln National and Principal Financial Group. The Hartford got $3.4 billion but no other amounts have been disclosed.
Who will line up next at the Treasury cash bar? Pension funds, private equity firms or their affiliates? What about dastardly hedge funds? It turns out a trucking firm is asking for $1 billion to fund its $2 billion pension obligation. At least it's pension related. Did the shortfall arise from imploding pension assets?
Shadow bankers have multiple options. They can wait for Treasury's PPIP. The government has creative ways to siphon billions through back door arrangements. CNBC showed Ed Liddy, AIG's CEO, testifying. Liddy told Rep. Issa the Fed directed payment of huge sums for counter party reductions as a means to get more capital into the system. Over payments were outright gifts to Goldman Sachs and company. There is no loan to pay back.
While President Obama talked powerfully of the need to crack down on health care costs, the big money boy spigot remained wide open.
