I have really tried to maintain a level head over the past 3 months, 4 months, who knows. But the crap that just came out tonight is beyond belief. Without further ado, here is what’s up on the WSJ Real Time Economics site tonight. (Note that both of these moves were done today which was the last day-I thought the last day was a month ago-that banks and thrifts could apply for TARP funds).

Earlier in the day, the Fed agreed to allow Protective Life Corp. of Birmingham, Ala. to acquire Bonifay Holding Company, and its subsidiary Bank of Bonifay, based in Florida. Protective Life has $41 billion in consolidated assets. The bank had just $220 million in assets, and the Fed said its “capital level is not considered sufficient given its current risk profile.” The Fed also said the bank, chartered in 1906, was operating under a cease and desist order from Florida regulators. (See the approval.)

Just before 8 p.m., the OTS announced it approved the application of the Phoenix Companies Inc. of Hartford, Conn. to acquire American Sterling Bank of Sugar Creek, Mo. The OTS said Phoenix agreed to recapitalize the small thrift, which was chartered in 1934 and has $194 million of assets. The regulator also agreed to waive the normal public comment process, suggesting there was a need to close the deal quickly. The OTS slapped American Sterling with a cease and desist order last August. Its Tier 1 risk-based capital was just 2.19% at the end of September, according to the FDIC. (See the decision.)

This is beyond believable. Now we are letting a couple of no name insurance companies buy a couple of banks that appear beyond salvation so the insurance companies can tap into the TARP. It can’t be about saving the banks because they are just gnats on an elephants ass so the insurance companies have to be in trouble. So where are the state insurance funds? When did it become the Fed’s job to look out for that industry?

This is over the top. There is a stink starting to come out of all of this and it smells like nothing so much as a bunch of people who have corralled power taking care of their friends. That’s a pretty radical statement for a right of center guy like me but something just isn’t right.

Note: A couple of years ago I was doing a project down on the Gulf, just south of Bonifay. I had to occassionally drive through Bonifay and I can assure you that aside from one of the better greasy spoon restaurants I have ever been to there is no redeeming value to Bonifay.