Insurers are under a lot of pressure due to investments in fixed-income instruments which aren't the safest things to own over the next 10 years. There's no great place for them to invest, Warren Buffett's Berkshire has the best business model for insurance, since he's free to move his cashflow where he sees the best returns regardless of traditional risk outlook for a given security. Lincoln and HIG accepting TARP means they are in big trouble, and the next scare or lows in the stock market will likely make them look very bad. Lastly, just in insurance in general, keeping AIG alive is the wrong spirit. The gov't should be letting bad insurance companies die in order to ease pricing pressures as insurance products become harder to sell. The gov't is REALLY screwing up here. If the gov't wants the fabled "green shoots", it should look to kill big pieces of cr@p like GM, FNM, Christalmightyler, AIG, LNC, and HIG. Keeping them alive is prolonging the pain, and outsourcing more jobs to foriegn shores. Clearly, the Obama and Bushed admins only cared about votes and making meaningless headlines. The Obama and Bush families will live high on the hog forever, no matter what happens (short of Revolution or Civil War), so they have absolutely no skin in the game. Yet another reason for strict term limits at every level of government. In any case, HIG and LNC are potential zero shots, now with limited upside. Route for companies that denied the TARP, at least they still have some honor.
$16.3 (07/02/09)
