American International Group Inc. (AIG) shares valued at $18 billion were sold by the U.S. government, converting a four-year bailout into a profit for taxpayers.
The U.S. sold about 553.8 million shares at $32.50 apiece, the Treasury Department said yesterday in a statement. The New York-based insurer bought $5 billion of the stock. The U.S. has recovered its full $182.3 billion commitment under the rescue with a profit of about $12.4 billion and still holds about 22 percent of the insurer’s shares for future sale, Treasury said.
“To stabilize and then restructure the company with a very substantial positive gain for the American taxpayer is a significant accomplishment,” Treasury Secretary Timothy Geithner said in the statement. “We need to continue the critical task of implementing Wall Street reform so that the American economy is never put in this position again.”
With the Treasury stake below 50 percent, the Federal Reserve will become the company’s regulator, the insurer said in a preliminary prospectus supplement. AIG may face capital requirements and limits on its ability to repurchase stock or pay a dividend, under Fed oversight, according to the document…
The U.S. needs to average about $28.73 a share on the sales to break even on the equity stake it acquired as part of a 2008 bailout, excluding unpaid dividends and fees, according to the Government Accountability Office. The first two offerings were priced at $29 a share, and the second two at $30.50.
Interesting how a lot of economics doesn’t fit ideology.
The bank bail outs actually did turn out to show a profit though Obama put the money into a slush fund rather than doing something intelligent with it.
GM US on the other hand zeroed out the original share holders and we are down, I think 25 billion on share values and I believe we forgave another 20 billion in unpaid taxes, gave sweetheart deals to union employees while shafting non union employees and new hires.
Romney says that we should have simply run them through chapter eleven and saved ourselves 20 billion. Not saying he’s right but he knows a heck of a lot more about this sort of stuff than either me or Obama who has spent more time working on raising money than playing golf and more time playing golf than working on the economy.
Obama inherited about 500,000 from his grand parents according to what I’ve read. To the best of my knowledge most of the rest of his estate came from money off his book sales tied directly to his run for President.
By the way Moody’s is threatening to down grade our rating again unless we do something about the debt like shrinking it. Since that isn’t likely to happen anytime soon they should have done their job and not bothered with the yammer. Our ballooning debt, according to the Germans, is putting a damper on the world economy. As long as the US is a super power that actually computes of course the EU dept is doing the same thing.
Looks like TARP is doing better in the stock market than the average investor.
Let’s see, the right will blame Obomba for the failure when it goes bad and give the credit to Bush for it turning out okay.
The left will do just the opposite.
The only losers, the citizens of the USA.
Not true by a long shot, according to Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program.
It appears to be a profit only by using some creative accounting. Sound familiar ?
Not just creative accounting (which is present) but outright lies too. As a part of AIG bailout US Government didn’t just buy the AIG shares. In addition to that action hundreds of billions were given to FOREIGN banks as payment for AIG debts (or “debts”). Nowhere in the article does one see those numbers. That was money not only given away but given to foreign beneficiaries and given without any expectation or ability of getting anything back.
Profit? Ya, right. Just more political BS, I think.
Citizens were the big time losers.
The plan worked out well for the dem party, some highlights: ramp the benefits for the poor angle while blocking all attempts at mortgage reform. After taking congress in 06 ensure the supposed independent sec removes uptick rule 07. In 08 just before election pull the bailout and collapse the stock market ensuring landslide win. In 09 after inside trades complete take foot off market, cash in leaving joe public in the cold. In 2010 flash crash shakes out more of the remaining retail holders. 2012 Jpm scam further shakes down public confidence and ownership in share market, as usual insiders cash in with a rally just in time for election. Then apply regs preventing banks etc participation in markets leaving way clear for certain private hedge funds and other friends of govt to dominate ownership of America.
Citizens lose big time. Then thank nanny state for food stamps and sympathy.
The US govt is the new Bain Capital. This was just a PE deal of epic proportions.
AIG was underwriting loans all over the place, and was largely responsible for so many bank failures after it couldn’t pay off its insurance policies, and the cost was only $18 billion?
And Mitty goes on singing the Romney song::
“Yo, get out the get out the way of the money man Ladies know I’m dope, so consider me contraband Fella’s are just jealous, ‘cuz they’re ponies and I’m mustang Cuz I’m a user, a shmoozer, a big dollar loser That doesn’t matter ‘cuz my friends call me a bruiser And I, get chicks, so many chicks want me ‘Cuz I’m not funny, honey, a big oafy dummy That doesn’t matter ‘cuz my friends say I’m money
Don’t try to hang ‘cuz I’m out with a big bang” ……
You mean the tax payers (me) made a profit. And I ain’t getting it!!! Back the free paycheck/food line… I’ll take it that way… it’s easier!!!
An $18 billion loan for AIG is not that bad, but I think we all know they spent a lot more than that.
I thought liberals were against the bailout? Now they want to promote it as a reason to vote for Obama? A few months ago, they were doing the same and praising lower gas prices.
Too bad the money goes back to the Fed, which is a private bank, after the citizens of the United States got jacked off with vampire gloves and put up the assets to cover it.
Meanwhile, the CEO of the banks all got fat bonuses for getting their arms twisted into accepting the money.
Meanwhile, we got bent over and took it up the ass without any lube with the real-estate repossessions, the high interest we’re forced into accepting while also being forced to accept squat-doodle for out savings. (There’s a whole repo industry fuckin’ drooling over the fisting all those students are going to have to endure to repay their loans.)
Man are we stupid.
But not as stupid as the Euro-peons who are selling off their public property at bargain basement prices to whoever deigns to buy them. (Want to buy the Temple to Athena? [I bet you could fit the world’s largest mall food court in there, once you get rid of all those fuckin’ columns.:-)])
What? No Vampire Head Sweat Bands? Must be for submissives new to the game?
And the credit-reporting agencies (S & P, Moodys, Fitch) that called toxic sludge CDOs high-quality continue in business with no regrets or apologies.
Well done Bush and well done Obama, and your pragmatic teams that chose to rescue the economy rather than letting it go bust.
One in the eye for the ideologues.