Is Reid Trying to Tank The Markets?

J.J. Jackson* | October 5, 2008

Filed Under Economy / Economics, Harry Reid, The Economy

Chuck Schumer started a bank run by making comments and leaking them to the public. Now Harry Reid is adding fuel to the economic panic fire by dropping bombs here and there. Now he is insinuating that there might be an insurance industry bankruptcy on the horizon causing all insurance companies to take a hit.

NEW YORK (CNNMoney.com) — Several big life insurance stocks fell sharply Thursday, dragged down by jitters about their role in the credit crisis and fears sparked by a comment from Senate Majority Leader Harry Reid, D-Nev., Wednesday about a potential bankruptcy in the industry.
“We don’t have a lot of leeway on time. 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. That’s what this is all about,” Reid said prior to the Senate’s approval of the $700 billion bailout bill.

Steven Schwartz, an analyst who covers insurance companies for Raymond James & Associates, said that even before Reid made his bankruptcy comment, investors were growing worried about life insurers’ exposure to real estate as well as “secondary exposure” via investments in troubled finance firms like Lehman Bros, Wachovia and Washington Mutual.

But the comment from Reid clearly caused even more fear.

“Harry Reid didn’t help any,” Schwartz said.

If it is true, that is fine but Harry Reid should not be causing a panic by not stating which insurance company may be going bankrupt and giving evidence as to why. Instead, what he did was make a vague comment that caused a panic and all such companies suffered. That is not a responsible thing to do and quite frankly would only be done by someone purposefully trying to cause problems and seeking political power.

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