News the government is going to shower the life insurance industry with $22 billion of TARP funds solves one mystery: Why related stocks were curiously strong Thursday, prior to public disclosure.
Update: "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!"......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.
Somebody's going to win a Pulitzer Prize (or wind up as fish food) when they write the story of all these shenanigans.
