Obama's shoveling more money. This time: life insurers

[annarborgator]

I would fucking LOVE to get an explanation as to why in the fuck we're giving $22 billion to the goddamned life insurance companies. Insurance companies have this little thing called a FIDUCIARY DUTY to protect their funds on behalf of their clients. Why do they now require taxpayer angels to replace the money they threw away in breach of their duties?

The Treasury Department will make federal bailout funds available to a number of U.S. life insurers, acting on the embattled sector's long-running effort to get government help.

The Treasury is prepared to inject up to $22 billion into the insurers under the rescue plan launched last fall as the Troubled Asset Relief Program, said a person familiar with the matter.

http://online.wsj.com/article/SB124234565889921705.html

But wait, it gets even better:

"The evidence is compelling that the big institutional money was betting on this TARP approval for the insurers," writes Jon Najarian, co-founder of OptionMonster.com. "The other darker option would be that the big money was tipped off that the TARP news was pending. For my money I say there is no such thing as a coincidence on Wall Street!"

Najarian notes there were some unusually large bullish bets on several insurers Thursday via the options market:

* Lincoln Financial (LNC) - 21,000 calls yesterday vs. 30-day average of 5,500
* Prudential Financial (PRU) - 8,500 calls vs. 30-day average of 6,500
* Hartford Financial (HIG) - 114,000 calls vs. 30-day average of 21,100
* Principal Financial (PFG)- 8,700 calls vs. 30-day average of 1,600

"As smart money usually does, the buyers of these calls sold quickly" on Friday, he reports. "Or as I like to say, they took the money and ran!"

Beyond the outrage of possible (even likely) insider trading ahead of the TARP announcement, this news raises other riddles Barack Obama, Tim Geithner and Ben Bernanke need to address:

* Why does the line insurance industry need $22 billion of taxpayer funds?
* Why now, in the wake of the post-stress test bank capital raises, market rally and growing sense the financial crisis is over?
* How will the industry respond to the possible overzealous government oversight that comes with TARP funds?
* What horse trading, if any, went on between the life insurers and the administration? Obama wants to remove about $12.8 billion of tax breaks from the life insurers to help pay for health insurance on the one hand, but is giving the industry a $22 billion boondoggle on the other.

http://finance.yahoo.com/tech-ticker/article/248803/22B-Bailout-for-Life-Insurers-Mystery-of-Thursday%27s-Rally-Revealed!-But-Why-Now?tickers=PFG,ALL,HIG,LNC,AIG,AMP,PRU?sec=topStories&pos=5&asset=&ccode=

slider, has BernGeiBama said anything to you about this in your meetings?