Tuesday, April 14, 2009

Reminder: why the Treasury needs the banks to look better

From the Asia Times' Inner Workings blog:

The next sector to collapse would be the insurers: as I’ve said here again and again, the big pyramid scheme in the US financial system is that the insurers own the bottom of the capital structure of the banks. Bank preferreds, trust preferreds, hybrids, etc. were the favorite repast of yield-hungry insurance portfolio managers.

The big insurance companies all are trading like junk, still....