Oh No! The Hartford Joins The Bailout Boys
OK … now its completely out of control. This is just insane. The Hartford, Connecticut’s most noticeable and perhaps the state’s most important financial services company has joined the list of companies at the bailout trough. Via WTIC.com
A news release posted on the website ofThe Hartford says the Hartford Financial Services group has applied to the federal Office of Thrift Supervision to become a savings and loan holding company. The move would make the company eligible for funds under the financial services emergency legislation ,,, and the Treasury Department’s “Capital Purchase Program.”
Chairman Ramani Ayer is quoted as saying the Hartford is a strong, well capitalized institution — but is looking for flexibility and stability.
OK … let me get this straight. The Hartford is strong and secure but since there’s taxpayer money out there … well we might as well get our share. I may not have all of the info but on its surface this is outrageous. If you are stable then you don’t need taxpayer cash. If you are not, you have a fiduciary responsibility to say so. The Hartford is clearly doing what is best for its employees and shareholders. It’s my guess they intend to use the ability to borrow as an insurance policy against possible future losses from investments that may go bad. I can understand it, but its wrong. Taxpayer money is not supposed to be used to allow private companies to operate in a risk-less environment while they still operate their business for fun and profit. The hartford still has unlimited upside potential but now has the ability to make investments knowing they are covered on the down side. Capitalism as we know it is slowly being killed.
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As I understand this story they are buying a distressed bank. I think that this has to do with the tax code change on Sept 30 that allows banks to write off the losses of the entity that they are acquiring. This is going to save banks billions and billions. The Hartford can now write off all of this other entity's losses.
The trick involved was for The Hartford to buy a small FL Savings & Loan ($10 million I heard) thus becoming a bank holding company eligible for access to the public teat.