Warp Speed

What AIG has done is move to warp speed how looming the presence of the federal government is in the insurance business right now. Life insurers, especially those who were supportive of an optional federal charter (and that includes most of the biggies), are covered with pinch marks and beside themselves over how much closer something federal seems at this point.

But nobody ever gets anything from the federal government for nothing. There's always a price. The question is: What will the price be for those insurers asking to be allowed to line up at the $700 billion trough called TARP, or the Troubled Asset Relief Program, for those who are acronymicly challenged?

(Maybe it's perverse, but with just the slightest change, that acronym could have been TRAP.)

Everything is moving so fast that it sometimes seems like the ground is constantly shifting and there are no rules that anyone can count on. But I go back to the one thing you can always count on–the federal government will do it their way, not yours. It doesn't matter whether it's the Treasury Department or Congress or the White House. If you get something you are going to have to give something back, and it's usually more than you anticipated having to give and often more than you want to give.

But once you've taken a banana or two from the D.C. gorilla it's awfully hard (if not impossible) to say, "Gee, I'm not in the mood for a hug right now."

Thus my anxiety for those life insurers who are getting pretty excited about traveling at warp speed to a destination they thought they wouldn't be seeing for at least a couple of years. As big as they are and as famous as some of their brand names are, they are not calling the shots in this scenario.

Warp speed, as we know, can cause some pretty strange things to happen, even if things don't go spinning out of control.