Treasury take on AIG bailout hits $15.1B

MagicBob

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#1
WASHINGTON, Sept. 11 (UPI) -- The U.S. Treasury said its return on the sale of stock in bailed-out insurance giant American International Group reached $15.1 billion Tuesday. The Treasury began with a sale of 553.8 million shares of the company into which it had invested $182.3 billion to keep it from collapsing in the heat of the financial meltdown of 2008 and 2009.
The shares were priced at $32.50 apiece, with expected proceeds of $18 billion. However, with an over-allotment in effect, the Treasury's take was expected to reach $20.7 billion, the department said in a statement.
The sale was also expected to disperse 636.9 million shares that would reduce the department's holdings of AIG from 53.4 percent to 15.9 percent.
In total, the Treasury said its return on the $182.3 billion investment had now come to $197.4 billion, "representing a positive return of $15.1 billion to date," the department said.


Huh looks like Obama did the right thing bailing out the financial sector huh? :action-sm

inb4the "but Bush!" :D
 

weeniewawa

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#2
and GM still owes us something like $35 billion

and they don't have to pay any corporate income taxes

another great investment my bin obama
 

Ballbuster1

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#3
Lets see... The govt spent trillions on many loans and gets some profit back on 1 loan.

Yeah, the bailout was a huge success.
 

Josh_R

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#4
Nope. Still philosophically wrong to gamble taxpayers' money on private companies.
 

whiskeyguy

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#5
Wait, I'm confused. Now doesn't the government owe someone $2,265,000,000 in capital gains tax? (How much a private investor would have to pay for stepping in and "saving" AIG)
 

MagicBob

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#6
Lets see... The govt spent trillions on many loans and gets some profit back on 1 loan.

Yeah, the bailout was a huge success.



ya thats what it means. *facepalm*...

why is it that some make this leap in "logic"? There is a story about 1 loan getting paid back so that means that there was only profit on 1 loan. I really cant fathom how someone would even think like that. I guess there is the key, there isnt much thinking behind it.

and its one thing to look at TARP in the metric of "did we make money" to judge its success... another way to look at it is that ..."money still exists".. everyone didnt end up with ZERO dollars when it was all done (financial system meltdown).

http://www.treasury.gov/initiatives/financial-stability/Pages/default.aspx
 

Norm Stansfield

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ya thats what it means. *facepalm*...

why is it that some make this leap in "logic"? There is a story about 1 loan getting paid back so that means that there was only profit on 1 loan. I really cant fathom how someone would even think like that. I guess there is the key, there isnt much thinking behind it.

and its one thing to look at TARP in the metric of "did we make money" to judge its success... another way to look at it is that ..."money still exists".. everyone didnt end up with ZERO dollars when it was all done (financial system meltdown).
Maybe then you would've lost some weight, and we wouldn't be making fun of your fatty mac'fatness TM now.
 

mrbucket75

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#9

Creasy Bear

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Wow, just buying everything up at this point, we will be chinese soon.
A point I've made before, but worth repeating...

In the near future... WHEN the Chinese are calling the shots in the People's Republic of America 2: Electric Boogaloo... the only place you'll be able to see one of "those people" will be in a cage at a zoo.

You think whitey's a bad boss man? Wait'll yellowey is in charge. Boss yellow man's idea of givesmedat is a bullet behind your ear.
 

KRSOne

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#11
Wow, just buying everything up at this point, we will be chinese soon.
When the dollar becomes worthless and foreigners don't want it anymore, every foreigner with US dollars will start buying up everything before it becomes worthless and we will see some real inflation as the dollars come back home.
 

MagicBob

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#12
http://www.washingtonpost.com/busin...57294a-4314-11e2-8c8f-fbebf7ccab4e_story.html

WASHINGTON — The U.S. government said Monday that it is selling its remaining shares of American International Group stock, moving to close the books on the government’s biggest bailout during the 2008 financial crisis.
Treasury said it had begun a sale of 234.2 million shares of common stock in a public offering. The government’s shares represent a 16-percent ownership stake in the insurance company.
reasury has already recovered more on its AIG investment that the original $182.3 billion bailout. It was the largest government bailout package, including both loans and federal guarantees.
As of September, Treasury and the Federal Reserve had received $197.4 billion.
AIG, which is based in New York City, nearly collapsed at the height of the financial crisis. The company suffered massive losses from exotic financial instruments whose value was based on mortgage securities.
AIG became a symbol for excessive risk on Wall Street and a touchstone of public anger. It was criticized by some members of Congress for spending $440,000 on spa treatments for executives only days after it was bailed out.
AIG stock closed at $33.36 on Monday, down 77 cents from Friday’s close. AIG stock has traded between a low of $22.19 and a high of $37.67 over the past 52 weeks.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
 

whiskeyguy

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#13
MagicBob, hate to inconvenience you with math, but adjusting for inflation we loaned AIG $200 billion, and recouped ~$205 billion. That means we gave them a 4 year "loan" at a 2.4% interest rate (rough average of .6% per year), which is insanely low. When you consider opportunity cost and the time value of money (not to mention administrative costs to bailout AIG), the federal government lost money on this deal.
 

MagicBob

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MagicBob, hate to inconvenience you with math, but adjusting for inflation we loaned AIG $200 billion, and recouped ~$205 billion. That means we gave them a 4 year "loan" at a 2.4% interest rate (rough average of .6% per year), which is insanely low. When you consider opportunity cost and the time value of money (not to mention administrative costs to bailout AIG), the federal government lost money on this deal.

cept for the part where the monetary system didnt melt down.... taking that into consideration I think it was a pretty good investment.
 

whiskeyguy

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cept for the part where the monetary system didnt melt down.... taking that into consideration I think it was a pretty good investment.
1) You can't quantify that value.

2) When you bail out companies, you weaken the system. Capitalism is a great system because it's based on the concept of Darwinism. The strong survive and the weak fail... and eventually you can stand upright and use your thumbs to send text messages. In America we're drifting towards helping the weak companies while punishing the strong ones. Which way will our economy (d)evolve if we continue with those types of policies?
 

MagicBob

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#16
1) You can't quantify that value.
a lot

world wide monetary system melting down = bad... to put if very simply.

2) When you bail out companies, you weaken the system. Capitalism is a great system because it's based on the concept of Darwinism. The strong survive and the weak fail... and eventually you can stand upright and use your thumbs to send text messages. In America we're drifting towards helping the weak companies while punishing the strong ones. Which way will our economy (d)evolve if we continue with those types of policies?
the system was put at risk by the derivatives market. Everyone (meaning financial institutions) were so heavily into that market that when it crashed, it could have take the entire system down with it. This want a case of "we need to let the system fail to have a stronger one"... it was a case of one specific risk that threatened the entire market. It really wasnt a case of a overall weakness in the market, it was the case of a very strong specific poison that was allowed to fester and grow. Had it been taken care of (regulated) it wouldnt have threatened the system.

You like to talk about how it would be great to let it all topple and rebuild from nothing. Sounds great, cept when it means that everything YOU, and this case I'm not talking about the rhetorical you, but YOU personally have is worth ZERO. The money you had in the back? Gone. Your pension? Gone. The cash in your hand? worthless. You wouldnt be able to sell your house, car or anything of large value for a long time (think decades) cuz no one would have any $. Think our current economic situation is bad? Its nothing compared to what could have happened.
 

whiskeyguy

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a lot

world wide monetary system melting down = bad... to put if very simply.



the system was put at risk by the derivatives market. Everyone (meaning financial institutions) were so heavily into that market that when it crashed, it could have take the entire system down with it. This want a case of "we need to let the system fail to have a stronger one"... it was a case of one specific risk that threatened the entire market. It really wasnt a case of a overall weakness in the market, it was the case of a very strong specific poison that was allowed to fester and grow. Had it been taken care of (regulated) it wouldnt have threatened the system.

You like to talk about how it would be great to let it all topple and rebuild from nothing. Sounds great, cept when it means that everything YOU, and this case I'm not talking about the rhetorical you, but YOU personally have is worth ZERO. The money you had in the back? Gone. Your pension? Gone. The cash in your hand? worthless. You wouldnt be able to sell your house, car or anything of large value for a long time (think decades) cuz no one would have any $. Think our current economic situation is bad? Its nothing compared to what could have happened.
That's bullshit and you know it. Even if it hurts for a while (our economy wouldn't have failed with AIG), we'll end up being stronger. One of our problems is we want band-aids to make us feel cozy right now... that's what entitlement programs are, but that destroys our future as a country.

What happens in 50 years when our economy fails anyway? If you fell off a scaffold, wouldn't you rather it be on the bottom plank than the one 40 feet up?
 

MagicBob

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That's bullshit and you know it.
uhmm... no its not bullshit.

Even if it hurts for a while (our economy wouldn't have failed with AIG), we'll end up being stronger.
thats just it.. .it wasnt JUST AIG... it was the entire financial sector that had 16 times the WORLDS gdp tied up in a house of cards market. If all of them had been allowed to collapse the financial system would have been taken down.

One of our problems is we want band-aids to make us feel cozy right now... that's what entitlement programs are, but that destroys our future as a country.

What happens in 50 years when our economy fails anyway? If you fell off a scaffold, wouldn't you rather it be on the bottom plank than the one 40 feet up?
again, this wasnt the case of a systemic weakness in the market... it was one specific thing that was allowed to get out of control.