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TARP Spin Spun Out of Control, 19,000 Left Jobless

Pharmaceutical giant Pfizer announced today that it is acquiring drug maker Wyeth in a gargantuan deal valued at over $68 billion dollars.

Pfizer CEO Jeff Kindler didn't hesitate to use the announced acquisition of Wyeth as an opportunity to champion the role of banks involved in the deal:

"It's good to see that banks are doing what banks are supposed to be doing," said Pfizer CEO Jeff Kindler on a conference call with reporters Monday. Read more on the Pfizer/Wyeth deal. J.P. Morgan Chase, Bank of America, Citigroup and Goldman Sachs have all received government aid under last fall's TARP program."

I actually believe a successful transaction of this size during a period of economic retraction is a good thing because it reflects some level of optimism in the long term economic prospects for the country. However, it will be interesting to observe Congress' reaction to this deal in light of the loss of 19,000 jobs resulting from the combination of the two companies.

Some bank analysts are asking the obvious:

'We also wonder whether some of the banks who appear to have taken money under the TARP will than turn around and loan that money to finance a deal that will obviously -- to us -- lead to job losses -- something we assume the authors of the legislation would be vehemently against.'

What will Senator Countrywide (Dodd) and Representative FNMA (Frank) have to say about this?


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Comments (5)

Look at it from the point o... (Below threshold)

Look at it from the point of view of Dodd and Barney. That's 19,000 DEMOCRATIC VOTES. Get those people sucking on the public teat via unemployment checks and you've got loyal voters.

As long as they cut my inte... (Below threshold)
Senator Dodd:

As long as they cut my interest rate by another .25%, I don't care what they do with the money.

"What will Senator Countryw... (Below threshold)

"What will Senator Countrywide (Dodd) and Representative FNMA (Frank) have to say about this?"

They don't understand anything about the creative destruction of the market. They only thing they understand is how to manipulate the public opinion in order to garner more power for themselves.

The government made a point... (Below threshold)
Mac Lorry:

The government made a point to buy preferred (non-voting) stock in banks using the TARP funds in order to keep the government out of banking business. However, it seems anytime TARP funded banks do something beyond giving a consumer loan some politician is questioning the move.

Companies and banks need to be warned that if they take TARP funds they are going to come under political scrutiny and attack from the President, to congress, to mayors and citizen groups. Keep it up and we'll see some companies or banks refuse the toxic TARP money or even give it back.

As for GM and Chrysler, a government committee has been set up to design their cars and trucks. Here's the government's prototype for the 2011 Chevy Trabant.

The "Big Three" are under b... (Below threshold)

The "Big Three" are under bankruptcy watch and begging for more bailout money. President Barack Obama thinks this is a good time to appease his environmental base by weighing Detroit down with a new round of environmental regulations. This is a horrible timing and it will severely damage the ability of the "Big Three" to return to profitability. The first increase in CAFE will take place by the 2011 model year. Detroit is now preparing to launch the 2010 model year in July. Read more here. The "Big Three" are sinking and Barack Obama fires a salvo of torpedoes






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