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Loose Lips

October 2, 2008

Insurers dive on Reid’s ‘bankrupt’ quote

Comments from Senate Majority Leader Harry Reid about a ‘major insurance company’ on the verge of bankruptcy send already hard-hit stocks sharply lower.

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.

Careless.  Just plain careless and stupid.  But hey, at least you got your sound bite and camera time right Senator?  Everyone knows that’s the most important thing. right?

But thats not all:

A spokesman for Sen. Reid backtracked a bit Thursday and said that the senator was not aware of any company being in danger of bankruptcy.

“Senator Reid is not personally aware of any particular company being on the verge of bankruptcy. He has no special knowledge about [a bankruptcy] nor has he talked to any insurance company officials,” said Jim Manley, spokesman for Sen. Reid, in an email to CNNMoney.com.

Too late Senator.  The damage is done.

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