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Fed is now in the insurance game


omagh
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http://www.washingtonpost.com/wp-dyn/content/article/2009/06/25/AR2009062500887.html

So the NY Fed is the proud owner of 2 Special Purpose Vehicles (SPVs), with the life insurance obviously (ALICO) not being competitive with BRK, FFH, MKL, etc.  AIA operates in China, so Kenneth Kwok at Falcon (FFH subsidiary) will see some competition, for example.  If the NY Fed buys two subsidiaries, surely there are other deals pending as AIG divests and deleverages to pay back the Fed...

 

-O

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This is a little concerning for me, both from a BRK/MKL/FFH perspective and from a US Citizen perspective. First, of course, having a competitor whose backstop is the US Federal Government is not attractive (does not apply now but in the future...). But secondly, I am nervous about the government being competition in general. It has elements of having Judge and Jury in the same office. I would like a mandate that these preferred shares need to be sold off within a certain time frame.

 

-Crip

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