HT to Rhymes With Shown for this. You should read his post to get a feel for Professional Rent-Seeking.
Long story short, the FDIC began backing the borrowing of certain banks and S&L's about the same time TARP rolled out. That FDIC guarantee encouraged bond-buyers.
At the time, GECapital owned a couple of small S&L's in Utah and was primarily an "industrial loan" company--essentially, GE financed sales of its own product. They were not limited to that, by the way; they also made a lot of commercial real-estate loans.
Anyhoo, GE's lobbying effort paid off--despite its prima facie non-eligibility for FDIC backing, they managed to get it.
What's just as interesting as that is this:
Not every finance company has had that peace of mind. One of GE's competitors in business lending markets, CIT Group, a smaller company, has had a harder time raising cash. It has been unable to persuade the FDIC to allow it into the debt-guarantee program, at least in part because of its lower credit ratings. A recent Standard & Poor's analysis cited CIT's "inability to access TLGP" as a factor in the company's declining financial condition.
Awwwww. Too bad. A major GECapital competitor may just disappear.
Now and then the critics of "capitalism" are absolutely correct.
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