10-03-2008, 02:21 AM
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Insurers dive on Reid's 'bankrupt' quote
Insurers dive on Reid's 'bankrupt' quote
Quote:
Several big life insurance stocks fell sharply Thursday, dragged down by jitters about their role in the credit crisis and fears sparked by a comment from Senate Majority Leader Harry Reid, D-Nev., Wednesday about a potential bankruptcy in the industry.
"We don't have a lot of leeway on time. One of the individuals in the caucus today talked about a major insurance company. A major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about," Reid said prior to the Senate's approval of the $700 billion bailout bill.
Steven Schwartz, an analyst who covers insurance companies for Raymond James & Associates, said that even before Reid made his bankruptcy comment, investors were growing worried about life insurers' exposure to real estate as well as "secondary exposure" via investments in troubled finance firms like Lehman Bros, Wachovia and Washington Mutual.
But the comment from Reid clearly caused even more fear.
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This is how you panic the public to sway opinion over to the bailout side...
Throw out speculation that creates fear on EVERY insurance company because they don't know who he's talking about, and create an industry-wide downturn...
F'in genius... 
It's fast becoming a trend from the Dems... 
Chuck Schumer, bank killer
Quote:
Federal regulators seized IndyMac today in the largest bank failure in decades. The FDIC will reopen IndyMac on Monday under its own control, keeping its $32 billion in assets while eating as much as $8 billion in losses. Guess what triggered the run on the bank that required FDIC intervention?
Quote:
In a written statement, the Office of Thrift Supervision, which regulated IndyMac, said “the immediate cause” of the failure was statements made by Sen. Charles Schumer, a New York Democrat. Mr. Schumer in late June publicly raised concerns about the bank’s solvency.
“Although this institution was already in distress, I am troubled by any interference in the regulatory process,” said OTS Director John Reich.
Mr. Schumer couldn’t be immediately reached for comment.
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Two weeks ago, Schumer publicly released a letter he had written to regulatory agencies, demanding action to prevent IndyMac’s collapse. Instead of shoring up the bank, the letter induced depositors to make a run on the bank. Within days, over $1.3 billion in deposits disappeared, forcing the FDIC to close the bank and pay off the insured deposits.
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