To our readers who also post with us on Yahoo ALL I’ll theorize that Gator is a Harry Reid Yahoo screen name. 😆
Ummm Harry, insurers are getting killed today on the street thanks to your comments. If you aren’t the Gator Senator, certainly you are now on his Christmas card list eh?
Shares of insurers mostly fell Thursday amid overall market uneasiness about the economy and whether the financial bailout package will be able to help the economy avoid a recession. The remarks also came a day after Senate majority leader Harry Reid said a major insurer is on the verge of going bankrupt, but analysts generally said that was not moving the financial sector or the overall market.
During a press conference Wednesday, Reid, a Democrat from Nevada, did not disclose the name of the insurer, but said it was brought up by another senator during recent meetings.
Reid told reporters Wednesday that “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.”
But a Reid spokesman, Rodell Mollineau, said Thursday, “Sen. Reid is not personally aware of any particular company being on the verge of bankruptcy. He has no special knowledge about nor has he talked to any insurance company officials. Rather, his comments were meant to refer to the conditions in the financial sector generally. He regrets any confusion his comments may have caused.”
Analysts generally dismissed Reid’s comments as a market-mover.
“That’s part of it,” said Craig Peckham, market strategist at Jefferies & Co., but he said Reid’s comments were not the market’s main worry.
“The proceedings in Washington are a real focal point, but they’re starting to be overshadowed by broader concerns about the direction of global demand.”
Asked about Reid’s comments, Ryan Larson, head of equity trading at Voyageur Asset Management, said,”There’s rumors going around the market all the time, but it doesn’t really matter. The drop you’re seeing is that the market isn’t fully believing if the House will pass this. If they pass the bailout, sentiment will shift back to the economy. Couple that with earnings season and you’re setting up for the perfect storm.”
And Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners, said, “The insurers are down, but that’s not moving the market as a whole.”
“You know, there’s always rumors out there. Could it be he wanted to get Congress to pass this, and that’s why he said it? I don’t know. There’s a lot of politics going on.”
Several analysts issued research notes on insurance companies Thursday. A Sterne Agee analyst advised investors not to jump into insurance stocks just yet. But Citi Investment Research analyst Joshua Shanker was upbeat about the sector.
Shanker said current price valuations at some major insurers, such as Allstate Corp., Hartford Financial Services Group Inc. and XL Capital Ltd., more than discount real worst-case scenario losses from mortgage investments. He recommends buying shares of Allstate, Hartford Financial and XL at their current prices despite the possibility of further losses in the insurers’ investment portfolios.
Nearly all financial institutions with investments in mortgages and mortgage-backed securities have been hit hard by losses since the middle of 2007, as the loans tied to those securities have increasingly defaulted.
The $700 billion financial rescue package, which received new life in the Senate Wednesday, would allow the government to purchase soured mortgage debt from financial firms, which could help alleviate some of the pressure in the credit markets.
Among the day’s sharpest decliners, Hartford Financial Services shares fell $4.11, or 10.8 percent, to $34 in late morning trading. XL shares fell $2.17, or 12.6 percent, to $15.10.
Metlife Inc. shares fell $5.40, or 11.2 percent, to $42.75. Earlier in the session, shares hit a 52-week low of $39.47.
Allstate shares fell 85 cents, or 1.93 percent, to $43.15.
American International Group Inc. shares were flat at $3.95
The word I hear is Mister Majority Leader was referring to the Hartford. The mushrooms there are not happy.
It was a pretty “boneheaded” comment to make, to borrow a work from a writer in your fine state. About as smart as saying “there is a major banking institution about to collaspe, i mean a major one, one that everyone knows about”. Doesn’t the guy realize that people will hear his comments, figure he knows what he is talking about due ot his position and get worried or panic?
His spokesman’s comment
Beau as much as I write many ppl would have a hard time believing I love lurking more (especially finance boards where insiders post a lot).
Thanks to what is going on in DC I’ve had clients call me wanting to know if they need to clean out their bank accounts. I had one move a 7 figure sum from one bank to another on a mere whiff of bad news. It is a zoo.
Anyone wanting to lurk a finance board my suggestion would be this one. I haven’t seen commentary so venomous since Jim Cramer recormmended Dick’s Sporting Goods back before Katrina.
sop
Thanks for the post Gar. If he wasn’t a U.S. Senator he would be castigated, if not prosecuted.
I am biased against Sen. Reid as I think he is a joke! However, I feel I am entitled as a citizen to express my opinion. In my view, he is more concerned with more power than the welfare of the country.
The perofrmance of our Congress during the past couple of weeks falls into the “PITIFUL” category. This description crosses all party lines. Mrs. Pelosi also earned “PITIFUL” stripes for her performance lately.
Umm Sup, I did the post though I was glad to see Gar back on ALL.
Pelosi has house internals that limited her. Reid should have kept his mouth shut.
Congress was especially pitiful from 2000 to 2006 along with the idiot they took their marching orders from….now nobody listens to him Sup and that is part of the problem today.
sop
I have no biased one way or the other on Reid, at least before his statement. I question the man’s judgement after I saw what was ssaid. As for Congress Sop, I’d expand the time frame you mentioned to 2000-2008 as I’ve seen no improvements from 2006-2008, and neither has most of the remainder of the country. As mentioned the other day, the current sitting congress has the lowest approval rating of all time, and that rating was a fair amount below that of Bush That is not a glowing recommendation if Bush has a higher approval rating as you do.
I also found out that Bush doesn’t currently hold the lowest approval rating of all time, but give him a few more months, he might make that mark. The lowest approval ratings were set by Truman in 52 and the big Dick before he resigned in disgrace after Watergate. Something ironic was that although Truman and Bush are at the bottom at the end of their careers, they both also share the highest approval ratings during their administration-Truman right after VE day and Bush in his dealings with 9-11.
I love to lurk also, but have had zero time for that in the last couple years so only go into a handful of boards, blogs and websites.
Well Beau we’re glad to have you here.
As for time to lurk finance boards you sound like you were slabbed in Katrina. In fairness this endeavor takes a good bit of my lurk time.
sop
Beau, I agree with you 100%. Past a good job on protecting us since 9/11, President Bush has shown zero leadership concerning domestic issues. To allow Congress to spend like they have is shameful. The American people are not as stupid as the people in Washington think they are. The approval ratings of both the Congress and the president reflect we all get it.
Maybe it’s not that “the people in Washington” think “the American people are stupid” but that they know we’re smart – consequently, we haven’t had enough information to make our voice heard until a problem became too big to hide.
I think the Hartford is done. There’s just too much leverage in the marketplace and the Hartford will fall just as AIG fell.
http://www.goldentouchinsurance.com/is-the-hartford-going-bankrupt-2008-bankrupt-listings-and-speculation-list-for-major-stock-losses-for-insurance-companies/
that’s just great…I’ve got my entire retirement in the Hartford with my financial advisor assuring me that they are as solid as a rock. What the hell am I supposed to do now? Take it out and bury it in the back yard?
This economy sucks the big one!