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Yeah, if you ignore the fact that they paid the government back with money borrowed from the Fed.
Unfortunately your talking points don't apply to AIG. They should have been the model for ANY company taking bailout money, yet Bush and more to the point Paulson couldn't/wouldn't stomach essential defacto ownership of GS, BoA, CitiGroup, et al. and having the Gov't being able to restructure and reconfigure the risk models and practices they'd spent the past 10 years burning through.
AIG got swallowed up and at the time of the bailout was 92% owned by the U.S. Gov't. GS, et al got free money essentially.
What if a friend came to you claiming he needed $5000 or he and his family would be out on the street and you later found out he went to the casino with it?
same thing here, we are taxed by the fedguv to fund certain services and that money should not be used to gamble.
Yes, if that friend was GS, and the other 'banks' who it turns out were not only scamming you on the fact to give them money, and then run to the casino, but that they had the money all along and were banking on you giving them money b/c they also had money betting that their own "assets" were going to fall.
NEW YORK (CNNMoney) -- The U.S. government will make a $15.1 billion profit from the bailout of insurer AIG, according to a congressional watchdog panel's report.
The Government Accountability Office said Monday that the size of the profit will be determined by the long-term health of American International Group (AIG, Fortune 500), the timing of the Treasury's sale in the stock and AIG's share price
Treasury's exposure to AIG, which received government aid beginning in 2008, has been reduced sharply from the more than $180 billion committed to the bailout. In the latest sale of AIG stock, the Treasury said Monday that it was going to sell about $5 billion worth of common stock, reducing the remaining investment to $30.7 billion.
That's nice, but many more still owe us:
WASHINGTON — Companies that were bailed out during the financial crisis still owe U.S. taxpayers nearly $133 billion.
Some of the money will never be recovered. That's the conclusion of the acting inspector general for the government's financial bailout. Some bailout programs, like the effort to reduce home foreclosures, will last as late as 2017, the inspector general said. Those programs could cost an additional $50 billion or more.
GM is one of those companies we bailed out that may never pay us back. GM is taking advantage of $15 billion or so in tax-loss carry-forwards and other provisions, which allows GM to deduct losses from prior years, and even costs related to their pensions and other expenses for up to 20 years.
Tell me again, how GM is a success story? We bailed them out with tens of billions, and now they don't even have to pay taxes. Oh yeah, did i mention we are also paying $20 million for GM's Early Retiree Reinsurance Program too?
You have to have a seriously myopic view to consider the U.S.'s investments into AIG "profitable." The return generated by the U.S. treasury only exists because the Fed loaned AIG (and the financial system at large) trillions of dollars at unreasonably low interest rates.
So yes, if you pretend that there is no Federal Reserve bank, then you can consider this a "success."
Again, there was not really any "loan". There was a stock and OWNERSHIP acquisition of AIG in exchange for a cash infusion. Now there was a loan later to what was essentially a "asset pool" titled Maiden Ave./lane or something like that which was to "float" their debts to keep the economic cycle moving, but in larger scope was a much smaller deal compared to the others.
Yes, I agree. I believe there is now a law whic makes repetition of 2008 not possible. Some politicians want to repeal that law, but I think they are just playing political games.
I would like to know where the money goes when the government sells the stocks. Profit is profit, but how about the $180B? It shoud be eliminated, but is it?
Agree. What needs to happen is (and what is happening almost defacto) is Glass-Steagall to be re-instituted, and let it be known that from time forward if you want to be a hedge fund/investment bank...fine. Size and scope will be closely scrutinized. But if you fail, you fail.
Tell me again, how GM is a success story? We bailed them out with tens of billions, and now they don't even have to pay taxes. Oh yeah, did i mention we are also paying $20 million for GM's Early Retiree Reinsurance Program too?
There's this thing called opportunity cost. You're not exactly including what would have happened if the financial sector had collapsed or GM/Chrysler and their suppliers had evaporated. I'm not sure if you remember, but it was the biggest financial collapse in 100 years. Looking back with rose colored glasses is a little silly.
Unfortunately your talking points don't apply to AIG. They should have been the model for ANY company taking bailout money, yet Bush and more to the point Paulson couldn't/wouldn't stomach essential defacto ownership of GS, BoA, CitiGroup, et al. and having the Gov't being able to restructure and reconfigure the risk models and practices they'd spent the past 10 years burning through.
AIG got swallowed up and at the time of the bailout was 92% owned by the U.S. Gov't. GS, et al got free money essentially.
Quote:
Originally Posted by txgolfer130
Again, there was not really any "loan". There was a stock and OWNERSHIP acquisition of AIG in exchange for a cash infusion. Now there was a loan later to what was essentially a "asset pool" titled Maiden Ave./lane or something like that which was to "float" their debts to keep the economic cycle moving, but in larger scope was a much smaller deal compared to the others.
Sep. 16, 2008 First AIG Bailout
With AIG collapsing, the Fed bails it out with access to an $85 billion credit line.
Oct. 8, 2008 Second AIG Bailout
The government restructures its bailout of AIG. The insurer gets access to $37.8 billion more in loans.
Dec. 1, 2009 AIG and Fed Strike Deal to Reduce AIG Debt
AIG announces that it has completed two deals that, together, shave $25 billion off its tab to the Federal Reserve Bank of New York, bringing the combined total it owes the Fed and the Treasury to about $62 billion.
WASHINGTON — Companies that were bailed out during the financial crisis still owe U.S. taxpayers nearly $133 billion.
Some of the money will never be recovered. That's the conclusion of the acting inspector general for the government's financial bailout. Some bailout programs, like the effort to reduce home foreclosures, will last as late as 2017, the inspector general said. Those programs could cost an additional $50 billion or more.
GM is one of those companies we bailed out that may never pay us back. GM is taking advantage of $15 billion or so in tax-loss carry-forwards and other provisions, which allows GM to deduct losses from prior years, and even costs related to their pensions and other expenses for up to 20 years.
Tell me again, how GM is a success story? We bailed them out with tens of billions, and now they don't even have to pay taxes. Oh yeah, did i mention we are also paying $20 million for GM's Early Retiree Reinsurance Program too?
Yes, some of the money is lost, but even if the number stayed at $133, I'd say that is pretty cheap all things considered.
Sep. 16, 2008 First AIG Bailout
With AIG collapsing, the Fed bails it out with access to an $85 billion credit line.
Oct. 8, 2008 Second AIG Bailout
The government restructures its bailout of AIG. The insurer gets access to $37.8 billion more in loans.
Dec. 1, 2009 AIG and Fed Strike Deal to Reduce AIG Debt
AIG announces that it has completed two deals that, together, shave $25 billion off its tab to the Federal Reserve Bank of New York, bringing the combined total it owes the Fed and the Treasury to about $62 billion.
Sep 16, 2008 ~ [QUOTEThe Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.][/quote]
October 8, 2008 ~
Quote:
In exchange, AIG is giving the New York Fed investment-grade, fixed-income securities that it had previously lent out to other institutions for a fee. Those institutions are now returning these securities and want their money back.
The new program, announced Wednesday, is on top of the $85 billion the federal government agreed to lend to AIG last month to prevent the global company from collapsing. AIG said last Friday it had drawn down $61 billion.
** For perspective, the Fed Bank NY & the Fed now owns almost 92% of AIG with this deal. This IS NOT A LOAN. A loan doesn't require you to give up ownership. This is a defacto takeover for their malfeasance. That is the price they ALL should have been forced to pay.**
December 1, 2009 ~
Quote:
AIG announced Tuesday that it completed a deal wiping out $25 billion of its debt to taxpayers by selling stakes in two subsidiaries to the Federal Reserve Bank of New York.The troubled insurer gave the New York Fed preferred shares of two of its international life insurance companies, including $16 billion of American International Assurance Co. and $9 billion of American Life Insurance Co. The deal was originally announced in March.
The deal brings the New York-based insurer's debt to the New York Fed down to $17 billion.
All examples show how for each and every infusion AIG had to give up or essentially pay a penalty for extra infusions. This should have been the norm rather than the exception in the bailout process.
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