Get Your TARP Before it is Too Late

Last one in is a rotten egg.

I moved to Florida just before the run of monster hurricanes. I had to look on as shortage of tarps caused additional hardship. People with leaking roofs couldn't get tarps, so when it rained the water just poured through the roof causing additional damage.

Now I find myself wondering if there are enough TARPs (Troubled Asset Relief Program) to go around.

The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies.

It appears that if you own a bank holding company or a savings and loan, you are qualified for a TARP.

A number of life insurers, including Hartford Financial Services Group, Genworth Financial, and Lincoln National bought savings and loans last fall so they could call themselves banks and qualify for government funds. Some existing insurance companies like Prudential Financial and MetLife already qualify.

Soon these insurance companies will be crying "pour mouth" because they aggressively sold variable rate annuities tied to the performance of the stock market.

It won't be much longer before the supposedly good part of the business at AIG--insurance--starts to turn south and puts them in even more jeopardy.

Sooner or later, the Treasury is going to run out of TARP. Reminds me of the saying--"last one in is a rotten egg".

If the stock market returns to the lows it is going to be ugly. The big question right now is, will inflation click in soon enough to save the day?

Stay tuned.

There is a good article in the Wall Street Journal where you can read more about this topic --

U.S. to Offer Aid to Life Insurers.

Subscribe to EF Hutton via Email

Bob DeMarco is a citizen journalist and twenty year Wall Street veteran. Bob has written more than 500 articles with more than 11,000 links to his work on the Internet. Content from All American Investor has been syndicated on Reuters, the Wall Street Journal, Fox News, Pluck, Blog Critics, and a growing list of newspaper websites. Bob is actively seeking syndication and writing assignments.

Follow E F Hutton on Twitter

Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now

Geithner Speaks: My Plan for Bad Bank Assets

No crisis like this has a simple or single cause, but as a nation we borrowed too much and let our financial system take on irresponsible levels of risk.

However, the financial system as a whole is still working against recovery. Many banks, still burdened by bad lending decisions, are holding back on providing credit. Market prices for many assets held by financial institutions -- so-called legacy assets -- are either uncertain or depressed. With these pressures at work on bank balance sheets, credit remains a scarce commodity, and credit that is available carries a high cost for borrowers.

Our new Public-Private Investment Program will set up funds to provide a market for the legacy loans and securities that currently burden the financial system.

The funds established under this program will have three essential design features.

• First, they will use government resources in the form of capital from the Treasury, and financing from the FDIC and Federal Reserve, to mobilize capital from private investors.
• Second, the Public-Private Investment Program will ensure that private-sector participants share the risks alongside the taxpayer, and that the taxpayer shares in the profits from these investments.
• Third, private-sector purchasers will establish the value of the loans and securities purchased under the program, which will protect the government from overpaying for these assets.

Our goal must be a stronger system that can provide the credit necessary for recovery, and that also ensures that we never find ourselves in this type of financial crisis again. We are moving quickly to achieve those goals, and we will keep at it until we have done so.

Read the entire Geithner statement.

Subscribe to EF Hutton via Email

Bold Endeavors: How Our Government Built America, and Why It Must Rebuild Now

Roubini on the Credit Crunch, Global Recession, and Deflation (Part Two)

Part two of Nouriel Rubini's speech at the 2009 CBOE Risk Management Conference. He discusses several topics including: the credit crunch, global recession, and deflation.

Subscribe to EF Hutton via Email