Why is Paulson allowing this kind of wheeling and dealing to take place?
Dutch insurer Aegon has applied for more than $1 billion in U.S. government support and may buy a small U.S. thrift company to be eligible for the funds, it said on Tuesday.
Aegon already received $3.8 billion in capital support from the Dutch government and admitted they're not experiencing liquidity problems, but they're thinking of buying a failing thrift company, Suburban Federal Savings Bank in Maryland, in order to be eligible for the U.S. bailout money. They're essentially double-dipping to make themselves bigger and stronger at taxpayer expense.
Suburban Federal Savings has one corporate office and 7 branch offices. Can someone explain to me why it's necessary to buy these small regional banks versus letting them fail? They probably employ only a few hundred people compared to the hundreds of thousands of people employed by the Big 3.
It sounds like a scam to me, and Aegon isn't alone in scamming the system. Genworth Financial and Lincoln National are planning to buy small savings and loans companies and apply for federal support too.
If companies are waiting in the wings to pick up any lost production from a Big 3 failure, then why isn't the same principle being applied to banks? Surely there's a Chase, Comerica or some other bank waiting in the wings to pick up Suburban Federal's customers. If it's good enough for the Big 3, it should be good enough for financial institutions too. |
