Monday, November 17, 2008

Everyone wants to be a bank!

Genworth bought a small thrift in Minnesota and then immediately filed for money from the TARP.

So did Hartford Insurance.

So did Lincoln National.

So did Aegon.

If you own a thrift, you can apply for funds, so now these insurance companies buy the smallest thrift they can find, so their insurance subsidiary can get the largest amount of money from the TARP that they can find.

This program was supposedly for healthy institutions. So why are all these institutions applying for funds? It's the same old bait and switch!

Now we see that automakers, municipalities and cities are lining up for aid.

But we have G20 meetings that accomplish nothing, and we have a meltdown that always moves many steps ahead of the reactive Central Bankers and their ill conceived plans.

And the mad rush for money indicates that no one trusts the balance sheet of any financial company.

The balance sheets of some of these institutions are so bad that all the top executives of Goldman Sachs declined a bonus this year. Last year, when people actually believed Goldman, Lloyd was taking out $60 million; this year he is stuck with his $600,000 salary.

Which means Goldman is stuck with bigger and larger losses that will be easier to find, and harder to hide on it's balance sheet.

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