Jimbo the Clown never got the memo that Louisiana Citizens Insurance is insolvent. A Captured Regulator Update.

Louisiana Insurance Commish Jim Donelon

A dimmer bulb has never flickered in the Louisiana DOI folks.

Donelon said he took off another 2.3 percent because it was excessive and served to build the company’s capital and reserves.

“They don’t need to be building reserves” with rates, Donelon said. He said other fees help Citizens remain solvent.

Reserves????  Didn’t you mean the almost billion dollar deficit Jimbo? A common clown may well be able to fool the big business lackey/buffoons over at the Wall Street Journal editorial board but the numbers don’t lie and convey the ugly truth about Louisiana’s corrupt, special interest ridden insurer of last resort.

sop

Before we covered political corruption in Jefferson Parish we cut our teeth on AIG.

Mississippi Insurance Commissioner Mike Chaney

“There would be nobody there to protect consumers except the lobbyists for the insurance companies,” Louisiana Insurance Commissioner James Donelon said. “That’s how federal regulation works. 

He and others pointed to the financial collapse of AIG Inc. under federal regulation. AIG insurance companies under state regulation remained solvent. 

It was never a question in my mind that AIG, including its state regulated insurance operations, were insolvent. Rather the qustion in my mind was exactly how ignorant the State insurance commissioners that parrotted that III talking point above were and the relative degree of their stupidity. Sadly for our friends in Louisiana I concluded the hands down dumbest insurance commish was Jim Donelon mainly because even Mississippi’s Mike Chaney had enough sense to not parrot Robert Hartwig’s talking points on AIG. 

Today, even our State Insurance commissioners know better than to hold up AIG as a triumph of state regulation, especially after they allowed insurers to cook their books to gain regulatory capital, a topic we well covered back in the day:  Continue reading “Before we covered political corruption in Jefferson Parish we cut our teeth on AIG.”

How about a quick finance post for those that are trying to get the license plate number of the Greek semi that ran them over today.

How about we start with today’s market action explained at the Huff Po of all places and visit with Zachary Karabell:

The Greek debt crisis finally spilled over in full force to U.S. markets, aided and abetted by extreme statements emanating from such esteemed and prominent voices as Muhammed El-Erian of the large bond investor Pimco, who warned that Greece could be just the beginning of sovereign debt catastrophes. In the space of minutes, the major U.S. indices plunged more than 10%, fueled by the same programmatic electronic trades that were part of the battering in late 2008 into 2009. And then in the space of 15 minutes, they recovered, without — it’s fair to say — much human decision-making during that interval (and if an individual even tried trading during those 30 minutes, they would have found it difficult or impossible, as web sites such as schwab.com were completely overwhelmed with traffic).

Fair enough but the man’s conclusions past this point aren’t worth printing here on Slabbed. Program trading will be with us forever but it is not the culprit here despite the uninformed rantings of the author who is obviously long the market now most likely stuck (stuckholder in finance board parlance). For my part I sold in April and went away (a month ahead of time). That said I am not Carnac the Magnificent but besides staying at a Holiday Inn last night I also read Yves Smith over at Naked Capitalism.

To the extent the problems with Greek debt were hardly a secret Yves is not special among financial bloggers. What makes Yves special is the fact he understands the ramifications of the interconnectivity in global finance and in the case of Greek debt there is a special connection I’ll now share with the Slabbed Nation: AIG most likely will be on the hook for a decent chunk of Greek National debt should there be a default. Continue reading “How about a quick finance post for those that are trying to get the license plate number of the Greek semi that ran them over today.”

Roubini, Taleb Talk Economic Recovery and Risk on CNBC

I noted the majority of the comments on the Huff Post post which featured this video were driven from a political idealogy standpoint than one of economic common sense which is one of the reasons I opined on the last Taleb CNBC video I posted that:

using history as a guide we’ll go bankrupt before most folks are able to pull their heads out of their asses.

This is simple common sense, not only do we spend far more than we take in, we have also rewarded those who brought us this disaster known as the financial crisis. My own greatest heartburn isn’t derived from the short term measures taken designed to cushion the economic blow, rather we have no long term solution designed to prevent the inevitable.

[vodpod id=ExternalVideo.860311&w=425&h=350&fv=]

 

 

more about “Roubini, Taleb Talk Economic Recovery…“, posted with vodpod

Continue reading “Roubini, Taleb Talk Economic Recovery and Risk on CNBC”