U.S. Treasury Sells $18 Billion of AIG Stock, Cuts Stake to 19%

By and | September 10, 2012

  • September 11, 2012 at 8:45 am
    CB says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    As I recall, TARP was signed into law by President George W. Bush, not Obama. While I supported Bush, I don’t really support either President’s support of propping up private companies with taxpayer money since we the taxpayers will never see a dime of any of the profit made from this AIG transaction. Not like we’re going to get tax credit for the profits.

  • September 11, 2012 at 9:06 am
    D says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Wow. What a simplistic prospective on a complicated transaction. Actually, the US government made money off of this deal as well as GM. Therefore, the taxpayers do benefit as do the employees of both companies who have jobs and work for financially sound organizations. Maybe you should look up treasury or stock warrants to see how the government gets their money back and then some. These companies were not “propped up”. If that was the case, they would not be expected to pay government back. So, you want someone to come and give you your cut on what was profited in the AIG and GM deal? Tax credit for profits? Why don’t we just mix apples and oranges and call it the same thing. How would that work if they lost money? Can Uncle Sam knock on your door and ask for their cut from you??

    • September 11, 2012 at 10:06 am
      Agent says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      D, the facts are the taxpayers got hosed when the government decided to pick the winners and losers. Do you really think Turbo Tax Time will apply this money to the deficit? We are running a $1.6 Trillion annual deficit currently. As far as GM goes, they are not exactly roaring back to life as our current President says. Their stock has fallen dramatically and they are doing sub prime loans to sell cars. They are making 7 out of 10 vehicles in China now making this government the biggest outsourcer of jobs in history.

      • September 11, 2012 at 3:25 pm
        D says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        Stop the tea party nonsense. They saved the company from going under, saved jobs within and outside (vendors, suppliers, surrounding business) the company. They made money off the deal. (again, look up warrants). Case closed! AIG and GM had not negetive affect on the defficit. The stock is doing fine. It’s trading in the middle of it’s 52 week range with a P/E ratio of around $8. They make the Cadillac in China which does not work out to 7 out of 10 jobs. Now you want the government to tell GM where to locate it’s plants? I want the government out of GM now that they saved them and profited from it. What other things should the government control? Maybe providing tax incentives for companies that do not set up shop oversease would be nice. But, this lame congress cannot seem to get their act together.

        • September 11, 2012 at 3:49 pm
          Agent says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          Stop with the Progressive talking points D. These jobs were saved for the unions and you know it. Legitimate investors got the hose and unions assumed control. Judging from what is going on currently, they are running GM into the ground again. If you bought GM 6 months ago, you are under water for half your investment now. They now have 11 assembly plants in China. I hardly think Americans are working over there. They also have lost $1bil on the Volt investment and it costs them $90,000 to make a $40,000 car that no one wants. Trust me, they are making several models of Chevy over there as well, not just Cadillacs.

          • September 11, 2012 at 3:58 pm
            J.S. says:
            Like or Dislike:
            Thumb up 0
            Thumb down 0

            So, you agree with D that the government bailouts saved jobs, right? You’re just not happy because some of them happened to be union jobs. As for them being union jobs, while that is clearly correct with respect to GM, I didn’t know that AIG was unionized. Where did you hear that?

        • September 12, 2012 at 1:28 pm
          Bob says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          D:

          The current congress is not responsible for 2 years of “lame congress” democrats in office not passing a tax plan for overseas hiring (they did not pass a budget plan either. They did pass massive healthcare reform. So they did have the ability to get a common sense budget and tax plan in place.) Obama just plain didn’t want to tackle that area. If you want to talk about something not getting done, blame the people at fault.

          Side comment to your comment about the bailouts: So then are you saying Bush did a good job?

          Additional side comment: The average oil company’s total tax rate including outside country rates was about 40%. Oil companies are the main companies that ship over seas, in fact you will see why I’m using this as an example for hiring over seas and off shore revenues in a moment. Their effective rate in the U.S. was 9%-17%. This means they deducted about 23%-27% of another country’s taxable revenue and still paid 9%-17% here. Do you fully understand what that means? Think it out for a moment. It means our taxes are way too high.

          You could not make enough deductions through payroll for hiring here to give a corporation a 23% tax cut for hiring here. It has to be a rate reduction, or it will not work.

          http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/

          Also just some food for thought: Most liberal sites leave out that the oil company’s effective U.S. tax rate is not their total tax rate. Kind of makes you think they are misleading you by stating we need to raise taxes here to get those revenues eh? Increasing the tax rate here will not bring that company back in to operating in this country, could make them leave, and increases the cost of living for all of us.

          This is not even including the average 44 cent to the gallon tax from state and federal taxes.

          http://www.msnbc.msn.com/id/8670108/ns/business-answer_desk/t/who-benefits-rising-gas-prices/

          The U.S. tax system does need to change. And republicans are the only ones right now who have a plan to do it right. Canada is considering lowering their corporate tax rate to 10%. 10. They have lowered it since we raised it and over the years their dollar in that time period went from being worth less than half of ours, to more than ours, as well as paying of a substantial portion of their debt and having better growth than us while getting hit less by the recession. I say follow Canada. That means following the policies they did. The policies they put in place mirrored Romney’s to the letter.

          • September 12, 2012 at 5:12 pm
            Agent says:
            Like or Dislike:
            Thumb up 0
            Thumb down 0

            Bob, Do you think that Canada lowering their tax rate on corporations has anything to do with them developing their oil and selling it on the open market? Since we didn’t let them have Keystone, they plan to build their pipeline to the Pacific and sell it to China or Japan who need it. They are rolling in energy dollars and want to beat us to the market. We have 20 times the reserves they do in our Bakken and Green River basin and we are still doing Solyndra things and making gas out of algae, switchgrass and cow dung. Something is wrong with this picture.

          • September 12, 2012 at 5:47 pm
            Bob says:
            Like or Dislike:
            Thumb up 0
            Thumb down 0

            It might. It definitely means they could sell the oil at either a higher profit margin to reinvest into more drilling / energy research, or lower gas costs. Considering their gas costs are comparable to ours I’m going with the first rather than the later. At which point you must be correct on that mentality. I just never connected the dots before.

    • September 11, 2012 at 3:12 pm
      Expert Novice says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      So, $18,000,000,000 in revenue gained from this sale? Does that bring us any closer to paying off the $16,000,000,000,000 in debt or had we already spent that $18,000,000,000 before this sale was finalized?

      • September 11, 2012 at 4:43 pm
        Agent says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        JS, My comments related to GM, not AIG. However, the financial boys at AIG that were doing all the fancy swaps didn’t deserve the have their jobs saved. They ended up bailing out several banks including several in Europe before all was said and done. $182 Billion of our tax dollars that won’t see the light of day again for the average taxpayer. Whatever they say about the government profiting from these sales do not translate into help for the common citizen? Does Turbo Tax Tim have a stash hidden somewhere or has he pledged the money to pay down the deficit? I hardly think so.

        • September 11, 2012 at 5:03 pm
          J.S. says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          Agent, perhaps the folks in London doing the guarantees of the swaps didn’t deserve to have their jobs saved. How about the thousands of other AIG employees who weren’t involved?
          Yes, many of the dollars went to foreign banks under the terms of guarantees issued by AIG. This helped prevent the worldwide collapse of banks, which, if it had happened, would have had catastrophic consequences on the world, including US, economy. It was a necessary evil.
          And, why are “union jobs” bad? Don’t they also feed families and help with local economies?

      • September 12, 2012 at 6:14 pm
        Agent says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        Bob, With the Middle East about to implode with the Arab Spring and killing our Ambassador in Libya along with three others, I think energy will be going up a lot in the coming months. That is a fine how do you do when we help liberate them from Kadafi and they turn around and do this. Obama feigned outrage and then went to his fundraiser in Vegas. He has no intention in finding the perps and will continue to apologize to the Muslims.

  • September 11, 2012 at 4:22 pm
    CB says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    My comments were to the point, not simplistic. Sure, the treasury made a profit off the “investment”, but it was done with taxpayer money — yours and mine. We don’t see any return for that at all to our own personal bottom limes. If I wanted to expound more on what I mean it is that in a free market, the government should not be in the business of bailing out private companies. Perhaps AIG and GM are turning a profit today, but what about the next time they or another company are in trouble? Does Uncle Sam keep stepping in? The government needs to spend more time fixing its own operating problems and stop manipulating the economy.

  • September 11, 2012 at 4:54 pm
    J.S. says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    I find it somewhat disturbing that none of the people commenting on this story seems to have any recollection of WHY the government bailed out AIG.
    It had nothing to do with picking winners and losers.
    It was an attempt to limit the worldwide financial and banking fallout which would have occurred had AIG collapsed and all of the credit default swaps they guaranteed lost that guarantee. Major banks around the world would have collapsed because they couldn’t instantly make the cash payments necessary to meet their obligations under the swaps.
    If this had occurred, the world economy would have seen a depression substantially greater than the great recession that we have all been living through.
    You can agree or disagree whether this would have been the outcome. We will never know. But, when you feel compelled to comment either way, at least understand what happened and why.
    Personally, as much as I dislike AIG and hate the competitive advantage they were given over my company, I believe the correct choice was made. As bad as it has been during the past 4-5 years, it easily could have been much worse.

    • September 11, 2012 at 5:16 pm
      Agent says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      JS, We can agree that AIG is bad news. Perhaps you can remember when they, among several other carriers got caught along with Marsh Mc on the bid rigging scheme. That was a tawdry affair and not nearly enough of these dudes were dealt with. Then, they graduated to the financial arm to do these credit default swaps which had such disastrous results. Have any of these guys been sent to prison like Bernie Madoff? If left to their own devices, they will do something else and we will be back to square one. They have had several CEO’s come and go and they are certainly not stable in their business dealings. I won’t accept a quote on Chartis paper.

      • September 11, 2012 at 5:38 pm
        J.S. says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        Agent. I absolutely agree that AIG is bad news. In addition to your proofs, I add the misreporting of Work Comp premium to avoid paying residual market assessments and their gross underpricing of business during the recent soft market. I’m sure we can both add to the list.
        Have a great afternoon.

      • September 12, 2012 at 11:02 am
        Underbroker says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        Agent the only problem with that arguement is that the supposed parties involvbed and convicted all had thier convictions overturned on appeal and they were proven innocent.

        As for AIG being bad news, success breeds contempt, and how many of the current insurance products available today were created by the people at AIG who were willing to take a chance on a product and make it work like Occurrence Pollution coverage.

        I have noted that you have a great deal of contempt for AIG and while I do not know why, perhaps some transparency as to the grounds for the contempt would be in order.

        • September 12, 2012 at 5:42 pm
          J.S. says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          Underbroker, you say you don’t know why there is contempt for AIG. Let me explain. Many people in this industry have been watching AIG act in numerous documented unethical ways over an extended period of time. In many cases, these unethical actions led to criminal or civil penalties.

          This gives our industry a bad name and we resent AIG for hurting our good names.

          I hope this helps.

        • September 13, 2012 at 2:19 pm
          Ralph Kramden says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          …I have noted that you have a great deal of contempt for AIG and while I do not know why, perhaps some transparency as to the grounds for the contempt would be in order.” Underbroker–are you not from the USA? If you’re not, perhaps that will explain your ignorance as to why we hold AIG in such great contempt.

        • September 13, 2012 at 3:18 pm
          Agent says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          Hey Underbroker, are you an employee of AIG? We have contempt because of their behavior over several years. They take unethical to a new level. In addition, several things they did border on criminal. So what if someone at AIG puts forth a new product. It certainly doesn’t offset what they have been doing over an extended period of time and I agree with JS that it gives the industry and agents a bad name. The public saw first hand what has gotten them into trouble and taxpayers had to bail them out to the tune of $182 Billion, most of which will not see the light of day again. Will our tax rates go down with any repayment? I think not. Is that transparent enough for you?

  • September 11, 2012 at 9:15 pm
    Carl says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Baxtor, most went to institutional investors.

  • September 12, 2012 at 9:17 am
    Agent says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    It is hard for me to believe the stock market is not in the tank yet with all the bad economics news, chronic unemployment in the country and a government that is decidedly anti-business. We have seen other cases of IPO’s like Facebook starting out high and it is worth about half each share than the IPO. Does anyone remember the .com bubble that burst and a lot of people got hurt? AIG is not worth what these shares are priced at.

    • September 12, 2012 at 12:10 pm
      nomesaneman says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      Ironic isn’t it that the learned fellow who coined “Irrational exhuberance” in the dotcom 90s arguably contributed to the RE bubble of the 00’s? Maybe LaRouche was right all along.

  • September 12, 2012 at 9:27 am
    youngin' says:
    Like or Dislike:
    Thumb up 0
    Thumb down 0

    Sometimes I feel like we just go round in circles. People have an extremely short memory.

    • September 12, 2012 at 10:23 am
      Agent says:
      Like or Dislike:
      Thumb up 0
      Thumb down 0

      Youngin, there is an old saying that still rings true. Those that don’t learn from history are doomed to repeat it. This country is not learning from history and the same mistakes are being made that will insure more disasters in the future.

      • September 12, 2012 at 10:31 am
        youngin' says:
        Like or Dislike:
        Thumb up 0
        Thumb down 0

        Yes, but we all disagree as to which lessons are relevant. I oppose the idea of bailouts and the idea of the government picking winners and losers, as do you. However, I actually sort of understand why the bailout of AIG was necessary. But the conditions which made it necessary never should have existed in the first place. There should be no such thing as Too Big To Fail. These are the lessons I have learned from history. What have you learned?

        • September 12, 2012 at 12:41 pm
          Agent says:
          Like or Dislike:
          Thumb up 0
          Thumb down 0

          Actually youngin, I am probably twice your age and have learned a lot and by the way have an Economics degree to show for it. Anytime we have a government which is way too big and intrusive, we will have big problems. Government is the problem, not the solution. They are picking the winners and losers in this country and small business is suffering as a result. This is the worst government I have seen in my lifetime and I go back a ways. You don’t remember Carter if you are young, but we went around that block as well and it is good he was a one termer because we had just about as bad an economy then except interest rates were over 20%, stagflation, energy crisis etc.

          • September 12, 2012 at 12:52 pm
            youngin' says:
            Like or Dislike:
            Thumb up 0
            Thumb down 0

            Government was not the reason AIG became too big to fail. It doesn’t take an Economics degree to understand that (though I have one).



Add a Comment

Your email address will not be published. Required fields are marked *

*