Treasury sells off remaining AIG shares — for profit of $22.7 billion on bailout

posted at 12:01 pm on December 11, 2012 by Ed Morrissey

How often do we see a government operation end up with a profit?  Ironies abound in this denouement of the Troubled Asset Relief Program (TARP), bitterly opposed by people across the political spectrum but proposed, passed, and extended in bipartisan votes in the dark hours of the financial collapse of 2008.  The insurance conglomerate AIG was one of the biggest beneficiaries of TARP, and the target of much of the ire that resulted from the government’s $182 billion rescue, which gave it a large portion of ownership in the company while the money arguably constituted a second bailout of banks and other financial companies.

Today, though, Treasury sold the last of its stake in AIG — and ended up with a $22.7 billion profit off of the bailout “investment”:

The U.S. Treasury’s sale of its remaining stake in American International Group Inc (AIG.N) will fetch $7.6 billion, bringing the government a total profit of $22.7 billion from its crisis-era bailout of the insurer.

The share offering will close the chapter on one of the most politically contentious rescues of 2008, which ultimately gave AIG up to $182 billion of government support.

At one point, the government estimated that it would never recover all of the bailout money, but as AIG restructured and returned to viability, it was able to repay the entire rescue fund plus generate a profit for U.S. taxpayers.

AIG said on Tuesday that the Treasury agreed to sell 234.2 million shares to investors for $32.50 apiece. The insurer said that Treasury has additional AIG warrants that it can sell to boost the government’s $22.7 billion of total returns so far.

The Reuters article notes the most controversial part of the AIG bailout, which was the distribution of US funds to Europe:

The company also funneled over $90 billion of taxpayer money – more than half the funds the government used to rescue AIG – to various European and Wall Street banks, including Goldman Sachs, Deutsche Bank and Barclays Plc.

At the time, critics argued that Treasury was operating a back-door bailout of foreign financial firms, using AIG as just a smoke screen.  That criticism is just as valid today, especially with the US backing the IMF’s efforts to bail out Greece, and perhaps especially since the AIG path was significantly less transparent.  Congress should have exercised more control over the use of the bailout funds, but with a global collapse arguably in progress, they chose to act quickly at the expense of wisdom and, er, expense.

Still, it’s hard to argue with success.  AIG has bounced back, its clients and investors haven’t lost their capital, and taxpayers even made a profit off of the investment, which is highly unusual these days for government investments.  (Just consider Solyndra, A123,et al.)  Does the profit justify the bailout?  Take the poll:


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Blind squirrell. Acorn. All that.

iurockhead on December 11, 2012 at 12:06 PM

The ultimate ending to the bailout travesty.

The USA is the joke of the world.

The rotw used to envy and respect/fear the US.

Now, for excellent reasons, they all laugh.

Schadenfreude on December 11, 2012 at 12:06 PM

Is this a profit via government accounting standards, or by the standards used by private enterprise?

sharrukin on December 11, 2012 at 12:06 PM

I’m all about end results. The real question is, “was it worth the risk?”

Also:
Were any of the other bailouts even close to this kind of success?

And what did we do with the profit?

DeathtotheSwiss on December 11, 2012 at 12:07 PM

TARP is what saved us.

Critic2029 on December 11, 2012 at 12:08 PM

So how fast can Obama spend it?

Ooops there it went.

HumpBot Salvation on December 11, 2012 at 12:09 PM

AIG has bounced back, its clients and investors haven’t lost their capital…

My AIG stock is still in the red…

zoyclem on December 11, 2012 at 12:09 PM

22.7 billion vs the other 850 billion?

Where did that go?

What is the return of investment on that?

One profit of 22.7 billion vs a loss of the rest is not a good deal…

Khun Joe on December 11, 2012 at 12:09 PM

I wonder how long it will take the President’s partisans to credit the President with this ‘win’?

Scott H on December 11, 2012 at 12:09 PM

Does the profit justify the bailout?

All it does is provide precident for further bailouts on the notion that “it worked last time”.

How did the $90 billion funneled to Europe do? It looks as though they’re still in a rapid decline.

They should have worked it out on their own. What ever happend to the ‘risk’ aspect of having a company? If there is no risk and only reward.

Patriot Vet on December 11, 2012 at 12:10 PM

So Bush is charged with the spending and Obama gets credit for the revenue.

HumpBot Salvation on December 11, 2012 at 12:10 PM

Lost in all this is that the sale went to CHINA, your new masters. Enjoy the scrooming by one of the most vicious on Earth.

On Sunday, AIG said it will sell up to 90% of its airplane leasing unit to a Chinese investor group for $5.3 billion. It said it planned to use the proceeds to help repay the government for the bailout.

The Chinese paid way less than what the US asked for. They received a sweetheart deal, just because they could.

Schadenfreude on December 11, 2012 at 12:11 PM

Wait a second. Shares in a company that will always have the backing of the federal government no matter what it does is appealing to investors?

No way!

Still, it’s hard to argue with success. AIG has bounced back, its clients and investors haven’t lost their capital, and taxpayers even made a profit off of the investment, which is highly unusual these days for government investments. (Just consider Solyndra, A123,et al.) Does the profit justify the bailout?

when do the taxpayers start receiving their “profit” checks?

Joey24007 on December 11, 2012 at 12:11 PM

iurockhead on December 11, 2012 at 12:06 PM

I’m with you and will add stopped clock. I wonder where in the Constitution this stunt falls?

Cindy Munford on December 11, 2012 at 12:12 PM

Article is a little bit old but lays out what is still owed.

http://investorplace.com/2012/05/2008-tarp-funds-where-are-they-now/

HumpBot Salvation on December 11, 2012 at 12:12 PM

Khun: IIRC, the stimulus package was ~$850 billion. That was passed under Obama, whereas TARP (not that I agreed with it in principle) was passed under Bush.

If I am reading the numbers right, at least for AIG, we gave them $182 billion, and we received a $22.7 billion profit on that. That’s about a 12% ROI over 4 years (or so), which is pathetic from a corporate perspective, but considering how rarely the government can avoid turning any account red, it’s rather interesting.

Scott H on December 11, 2012 at 12:13 PM

Starve the Looters.

The taxpayers are the biggest fools and loosers.

YOU sustain the Obama’s lifestyle and on down. They become billionaires, based on all this looting.

Schadenfreude on December 11, 2012 at 12:13 PM

@blink on December 11, 2012 at 12:04 PM

I have to disagree.
If they truly wanted to fix the problem and put in incentives for doing the right thing.
(I am not for this option either, but I think it is better than what was done).

They should have given the money to every person that has a mortgage, and was current on their loan.
Give enough money to pay off their loan.

That would have unfrozen the credit, and then the people now have money to spend on other things, since their mortgage is paid off.

MityMaxx on December 11, 2012 at 12:13 PM

GREAT! NOW IT’S JUST A MATTER OF TIME BEFORE THE GM ‘INVESTMENT’ TURNS THE GOVERNMENT A PROFIT!

Waiting….. zzzzzzzzzzzzzzzzzzzzzzzzzzz

Marcola on December 11, 2012 at 12:13 PM

So the only parts of the TARP bailout money the Treasury hasn’t gotten back is what it gave to Detroit and Ally Bank?

agmartin on December 11, 2012 at 12:14 PM

Bush’s fault!

Galt2009 on December 11, 2012 at 12:14 PM

profit of $22.7 billion? sure, sure and unemployment dropped to 7.7% too

DanMan on December 11, 2012 at 12:15 PM

Dan: I’ll point out that a profit of $22.7B on a $185B investment over 4 years is about the same amount of money as you would make in a (personal) savings account.

Therefore, it’s not incredible, but of course a cursory glance at federal fiscal policy reveals this as a very rare event.

Scott H on December 11, 2012 at 12:16 PM

Gee, when Mitt Romney did things like this with his own money, Obama called him a vampire.

Congratulations, Count Dracubama.

Now if Obama had any sense of fairness, he would divide $22.7 billion by 310 million and send each of us shareholders a dividend check for about $73. I’m waiting, but not holding my breath.

Steve Z on December 11, 2012 at 12:17 PM

Does the profit justify the bailout?

No, but the bailout and TARP were justified for other reasons. As Blink has already suggested, the collapse as it was was bad but would have been catastrophic had the inevitable chain reaction of failure been allowed to run free through the US and global economy. These are not institutions you can build from scratch or be re-floated efficiently after bankruptcy.

AIG is the sole provider of a range of vital risk services. Like the banks, they are part of a vital infrastructure for commerce. More important than the p&l sheet for TARP is how we avoid being so beholding/vulnerable to a few corporate players in the future. Our economy could benefit from having more competition and healthy diversity when it comes to the financial sector. AIG and the large banks are still intact and we are still vulnerable to the same disease which led to TARP.

lexhamfox on December 11, 2012 at 12:17 PM

Well Steve Z
How bout to those that actually pay taxes.
So it would be far less than 310 million people ;)

MityMaxx on December 11, 2012 at 12:18 PM

Is this true?

http://www.ntu.org/governmentbytes/the-myth-of-tarps-profit.html

Allow me to burst your bubble. That $25 billion profit is a myth, a fiction of Washington accounting (like so many other numbers we hear), and here’s why: because the banks that got bailed out through TARP shuffled all of their bad assets over to Fannie Mae and Freddie Mac, which got their own separate bailout. So, really, it should be no surprise that they’re relatively healthy. They cut out the cancer and passed it right along to Fannie and Freddie. The banks have issues with the current foreclosure mess, but the worst loans are no longer their problem, they’re taxpayers’ problem.

So, just how big is that problem? Well, big. Really big. Their regulator is reporting that they could need another $215 billion worth of cash infusions over the next three years alone just to stay afloat. That’s on top of the $148 billion we’ve already shelled out for them. That means that the top-line cost could rise as high as $363 billion. When you subtract the $25 billion profit from TARP from that number, our bailout of Wall Street from their mortgage mess through Fannie/Freddie could cost $338 billion.

sharrukin on December 11, 2012 at 12:19 PM

the government’s $182 billion rescue…and ended up with a $22.7 billion profit off of the bailout “investment”

about 12 % over 4 years? My 401k had 10% return this year alone.

This:

…bringing the government a total profit of $22.7 billion from its crisis-era bailout of the insurer…

=/= this:

…insurer said that Treasury has additional AIG warrants that it can sell to boost the government’s $22.7 billion of total returns …

socalcon on December 11, 2012 at 12:20 PM

sharrukin on December 11, 2012 at 12:19 PM

I would guess it is highly likely that is what happened.

They did the same thing with GM.

Remember the commercials last year, saying how GM paid back the tax payers??

When all they did was shift pockets.

MityMaxx on December 11, 2012 at 12:21 PM

blink on December 11, 2012 at 12:04 PM

I’m not mad at you but I think this was all smoke and mirrors and will never be convinced that it was the correct thing to do. Being unable to use the ATM machine sounds like a valuable life lesson to me.

Cindy Munford on December 11, 2012 at 12:21 PM

sharrukin: Naturally it’s all accounting gimmicks.

socalcon: Oh, good, someone else that can do basic arithmetic. *highfive*

Scott H on December 11, 2012 at 12:22 PM

The U.S. Treasury’s sale of its remaining stake in American International Group Inc (AIG.N) will fetch $7.6 billion, bringing the government a total profit of $22.7 billion from its crisis-era bailout of the insurer.

And how long will it take 0bama to blow through that $22.7B? A few minutes?

UltimateBob on December 11, 2012 at 12:23 PM

Probably selling to beat the cap gains tax increases.

TexAz on December 11, 2012 at 12:24 PM

Cindy: I rather agree. Some long-overdue life lessons are coming, and trying to wriggle out of them instead of accepting the responsibility will only worsen the problem.

Scott H on December 11, 2012 at 12:24 PM

That huge profit will fund the govt for …… 2 days!!!11

jdpaz on December 11, 2012 at 12:27 PM

As to this one particular instance (aside from all the money that looted ‘invested’ in ‘bailouts’) a broken clock is right twice a day. Should we all get one?

ghostwalker1 on December 11, 2012 at 12:28 PM

I’m not mad at you but I think this was all smoke and mirrors and will never be convinced that it was the correct thing to do. Being unable to use the ATM machine sounds like a valuable life lesson to me.

Cindy Munford on December 11, 2012 at 12:21 PM

+1

It’s just reinforced the notion that certain well connected businesses are too big to fail and been an excuse for hyper-regulation to fix problems which regulation created in the first place.

gwelf on December 11, 2012 at 12:31 PM

oops.

sesquipedalian on December 11, 2012 at 12:32 PM

Scott H on December 11, 2012 at 12:24 PM

I think we are at the now or later stage, the longer we put this off, the worse it’s going to be. And while I am trying to be prepared I doubt there is any way to avoid being affected.

Cindy Munford on December 11, 2012 at 12:32 PM

Wasnt’ TARP I sold as a mechanism to temporarily buy bad mortgages until the real estate market settled down (to get them off of the bank’s balance sheets)?

And then it was never used for that?

gwelf on December 11, 2012 at 12:32 PM

the collapse as it was was bad but would have been catastrophic had the inevitable chain reaction of failure been allowed to run free through the US and global economy. These are not institutions you can build from scratch or be re-floated efficiently after bankruptcy.

Says who? The bankers who got the bailout and their politician puppets who agreed?

LoganSix on December 11, 2012 at 12:32 PM

Any “profit” made by AIG was vaporized by the multiple heavy losses to other beneficiaries.

HotAirian on December 11, 2012 at 12:33 PM

Is it bad that I question whether this is factual?

I’ve heard a few times that GM had repaid all of their money too, only to find out later that, well, no – not really.

Midas on December 11, 2012 at 12:33 PM

Wasnt’ TARP I sold as a mechanism to temporarily buy bad mortgages until the real estate market settled down (to get them off of the bank’s balance sheets)?

And then it was never used for that?

gwelf on December 11, 2012 at 12:32 PM

yep. even the name describes this: troubled asset relief program. the Treasury was to purchase the “troubled assets” that were causing these institutions problems.

Joey24007 on December 11, 2012 at 12:37 PM

after accounting for inflation, the cost of the bailout would be 201.3 billion. 182B+22.7B-201.3B = real return of 3.4B which is .46% per year returns. Great investment.

But there is more. This was a predatory investment that destroyed vast swaths of value in many other concurrent investments. So, how much did they gain? Likely hundreds of billions over the 4 year period.

astonerii on December 11, 2012 at 12:40 PM

Fannie and Freddie continue to be a HUGE risk.

blink on December 11, 2012 at 12:38 PM

Did AIG move bad assets over to Fannie and Freddie?

If they did then the taxpayers are the ones paying the bill so AIG can show a fake profit.

sharrukin on December 11, 2012 at 12:41 PM

New tone? Mich. Democrat threatens violence over right-to-work vote; ‘There will be blood’; Update: Mich. Dems proudly tweet violence threat; Update: Thugs follow-through with violence; AFP tent stormed, Steven Crowder punched
http://twitchy.com/2012/12/11/new-tone-mich-democrat-threatens-violence-over-right-to-work-vote-there-will-be-blood/

AFP tent torn down with women and children in it. Was punched in the face four times. RT and await the video.—
Steven Crowder (@scrowder) December 11, 2012

BREAKING People WERE inside AFP tent that was destroyed. Mob have knivea—
Lee Stranahan (@Stranahan) December 11, 2012

Vicious thugs.

Minor cut on forehead. RT for truth. http://t.co/GxYhSrK0—
Steven Crowder (@scrowder) December 11, 2012

Update: Huh. Now Michigan House dems have deleted their proud tweet of the violence threat.

FYI: @MIHouseDems deleted their Tweet wherein they suggested violence over RTW.—
Dana Loesch (@DLoesch) December 11, 2012

Galt2009 on December 11, 2012 at 12:42 PM

With the logic used here with AIG……

The Federal government should just take over all private enterprise and then privatize it in a few years for a healthy profit and then buh-bye deficit.

Dumbarsian Logic.

I hope the Mayans were right.

PappyD61 on December 11, 2012 at 12:42 PM

More important than the p&l sheet for TARP is how we avoid being so beholding/vulnerable to a few corporate players in the future. Our economy could benefit from having more competition and healthy diversity when it comes to the financial sector. AIG and the large banks are still intact and we are still vulnerable to the same disease which led to TARP.

lexhamfox on December 11, 2012 at 12:17 PM

Agree with this.

blink on December 11, 2012 at 12:35 PM

Maybe this here? I have not read it, but maybe you can and give your thoughts.
http://blogs.marketwatch.com/thetell/2012/12/10/u-s-u-k-regulators-take-on-too-big-to-fail-banks/

astonerii on December 11, 2012 at 12:42 PM

To blink and lexhamfox.

The reality is that we don’t know what would have happened if the bailout hadn’t occurred. Would teotwawki occurred maybe and again maybe not. It is all speculation.

chemman on December 11, 2012 at 12:43 PM

The problem then is still the problem: Fannie Mae and Freddie Mac.

These institutions pushed their crappy investments to Fannie and Freddie until they couldn’t take anymore. The institutions were left with nothing but “troubled assets.”

Nothing has changed and the scenario will probably repeat itself again.

Charles Gasparino does a great job of explaining this stuff.

Joey24007 on December 11, 2012 at 12:43 PM

still waiting to see more bankers in jail…

nathor on December 11, 2012 at 12:44 PM

What is the deal with postings not going through today?

astonerii on December 11, 2012 at 12:44 PM

Let me take over any company under the premise that I don’t have to pay bondholders, and I’ll be able to show a profit, too.

theperfecteconomist on December 11, 2012 at 12:45 PM

the treasury dept is telling us there was a profit from tarp? hahahahahahahahahahahahahahahahahahahahahahahhahahahahahahahahahahahahahaahahahahahahhahaha!!!!!!!!!!!!!

who is stupid enough to believe that whopper.

renalin on December 11, 2012 at 12:45 PM

Did AIG move bad assets over to Fannie and Freddie?

If they did then the taxpayers are the ones paying the bill so AIG can show a fake profit.

sharrukin on December 11, 2012 at 12:41 PM

all of these institutions bought and sold assets to each other and finally passed them off to Fannie and Freddie.

Joey24007 on December 11, 2012 at 12:45 PM

Yeah, and the GM bailout is approaching $70 billion in the red….

So, you got that going…

elowe on December 11, 2012 at 12:46 PM

still waiting to see more bankers in jail…

nathor on December 11, 2012 at 12:44 PM

More bankers were jailed under Bush than Obama. But don’t worry Obama’s on the job. Maybe he can ask Corzine to look into it.

gwelf on December 11, 2012 at 12:47 PM

I kinda agree with this. The only thing TARP I did was give us an extension of time. It gave us enough time to fix things properly.

The problem now is that things haven’t been fixed properly.

blink on December 11, 2012 at 12:45 PM

there is no need for the players involved to fix anything properly because they know that the government will always come in and bail them out.

Joey24007 on December 11, 2012 at 12:47 PM

Well, $22.7 billion is a nice down payment on the $4 trillion and growing we are into Freddie Mac.

Nice!

elowe on December 11, 2012 at 12:47 PM

Of course you are. In fact, I’m surprised that they didn’t use the word, banksters.

Free free to tell us what laws they broke.

blink on December 11, 2012 at 12:47 PM

Probably none and what is worse is that their actions were fueled by the so-called “lawmakers.”

A corrupt bargain.

Joey24007 on December 11, 2012 at 12:48 PM

blink on December 11, 2012 at 12:45 PM

whats the going rate for a bushie sock puppet?

renalin on December 11, 2012 at 12:49 PM

That’s General Motors – not AIG. General Motors was Obama’s terrible TARP II.

blink on December 11, 2012 at 12:45 PM

There was no TARP II. Congress allocated a certain amount of funds for a bailout they called TARP. The Bush administration spent a part of those funds and then Obama asked them to hold off on spending the rest until he took office. All of the funds were TARP. When the TARP program itself makes a profit let me know otherwise smoke and mirrors.

chemman on December 11, 2012 at 12:50 PM

blink on December 11, 2012 at 12:42 PM

I am sick and tired of being guided into things based on fear and possibilities. Democrats and the media have cried “wolf” over and over again and I am immune. The only time that one of their horrific premonitions came to pass was the government shut down under Newt. Big whoop! The government has got to stop swooping in and “fixing” things out of their purview, it’s not good for us and it usually makes everything worse. Also, that financial “meltdown” is my one nod to tin foil hat territory and I think Soros was behind it. Mission accomplished.

Cindy Munford on December 11, 2012 at 12:52 PM

Of course you are. In fact, I’m surprised that they didn’t use the word, banksters.

Free free to tell us what laws they broke.

blink on December 11, 2012 at 12:47 PM

eh, that was what the economist called them:
http://www.economist.com/node/21558260
and you know the economist is a communist rag/

nathor on December 11, 2012 at 12:53 PM

$22.7 billion just doesn’t seem to be all that impressive compared to this:

Taking together the size of the GSE’s outstanding guarantees and current debt obligations, $5 trillion is a reasonable estimate of the amount for which Fannie and Freddie (and thus American taxpayers) are now responsible.

I guess I am a glass half empty kind of guy. But I am sure glad we saved Goldman Sachs from going under! Another long line of Treasury Secretaries is surely in the wings.

elowe on December 11, 2012 at 12:54 PM

Today, though, Treasury sold the last of its stake in AIG — and ended up with a $22.7 billion profit off of the bailout “investment”:

LOL. The Fed acquired lots of AIG’s mortgage related securities (i.e. sh#t) that now sit on the Fed’s balance sheet (which is upwards of $3 trillion, devoid of any accounting, and amazingly unlikely to ever be wound down) to make the company “strong”. Great. You print up phony money to buy worthless assets off of me that are recorded as valuable and then crow about how much I’m worth afterwards! What a strategy!

TARP was wrong in what it was and how it was implemented. It was un-Constitutional (the Congress has the responsibility for the financial system, but not the power to just run around and buy into any company it wants in order to “save the economy”, which it didn’t do as the bulk of the fake financial recovery was due to the trillions the Fed printed up and wasted to provide the illusion) and the wrong thing to do. Period. Even if it had actually turned a profit on the whole (which it didn’t) it would still be the wrong thing to do and un-Constitutional. How difficult is it to understand this?

As to this fantasy of TARP having been a money-making proposition … get back to me after the Fed has unwound its balance sheet (LOL – as if). TARP could have been Constitutional but it just wasn’t structured to be and it wasn’t. It also wasn’t smart. It burned up tons of money to just buy some more time for an illusion but that illusion was mostly paid for by us through the Fed’s funny money, print, twist, zero-interest strategy. The Fed is the biggest buyer of US Treasuries, now … let me know when they’ve disgourged themselves of that worthless paper at the lowest interest rates in history (which you’d have to be brain-dead to imagine they’ll do at anything but a gigantic, humungous, unimaginable loss).

ThePrimordialOrderedPair on December 11, 2012 at 12:55 PM

blink on December 11, 2012 at 12:51 PM

We all react based on our experiences, I must point out that my other example was Y2K. Nothing could have happened on that date that was worse than what the company I worked for did in preparation for it. People start giving me end of the world scenarios and I immediately call bull sh!t and write them off. That’s why I am a current member of the Let It Burn contingent in our current “crisis”.

Cindy Munford on December 11, 2012 at 12:55 PM

I doubt it. AIG assets aren’t the type that would be accepted by Fannie and Freddie.

blink on December 11, 2012 at 12:43 PM

They were involved with troubled mortgage bonds, so why wouldn’t they have some of these same assets?

http://www.bloomberg.com/news/2011-08-09/goldman-sachs-says-aig-has-threatened-to-sue-over-mortgages.html

Goldman Sachs Group Inc. (GS) said American International Group Inc. (AIG), Fannie Mae and Freddie Mac are among companies that have threatened to take legal action against the firm over mortgage-related securities.

AIG, the insurer rescued by U.S. bailouts during the 2008 financial crisis, yesterday disclosed plans to sue Bank of America Corp. In that case, AIG alleges that Bank of America caused more than $10 billion in losses at AIG, which specialized in investments and insurance tied to mortgage bonds.

http://seekingalpha.com/article/122484-why-is-aig-backing-fannie-freddie-enhanced-mortgages

These questionable standards are ‘business as usual’ today at Fannie and Freddie. They continue to buy pools of mortgages where the required equity of a borrower has been replaced with an insurance company’s promise to pay. The incredible part is that one of those “approved’ insurers continues to be AIG.

Twenty-two percent of Fannie’s 08 business was enhanced. AIG was one of the biggest providers of the PMI coverage.

AIG owes its existence to the taxpayers. Yet they are writing first loss insurance on high risk mortgages.

sharrukin on December 11, 2012 at 12:55 PM

I could at least understand the need to indemnify & shore up the banking institutions that posed a systemic risk. There are some lessons from the Great Depression that are worth learning. Many on the right have used TARP as too much of a litmus test for orthodoxy, IMO.

SAMinVA on December 11, 2012 at 12:57 PM

Probably none and what is worse is that their actions were fueled by the so-called “lawmakers.”

A corrupt bargain.

Joey24007 on December 11, 2012 at 12:48 PM

chicken and egg problem, because the banks also sponsor many the same politicians that make the laws.

nathor on December 11, 2012 at 12:57 PM

all of these institutions bought and sold assets to each other and finally passed them off to Fannie and Freddie.

Joey24007 on December 11, 2012 at 12:45 PM

That’s what I suspect, but I would like to see some direct evidence.

sharrukin on December 11, 2012 at 12:58 PM

blink must be on piece time.

renalin on December 11, 2012 at 12:59 PM

existential question: are we the wall street party? can I be capitalist and hate wall street?

nathor on December 11, 2012 at 1:00 PM

I’m just trying to help the Hot Air community understand the actual facts about this issue.

blink on December 11, 2012 at 1:01 PM

An economic collapse should have taken place in 2008.

Now when it comes, and it WILL come… the damage will be far more massive.

sharrukin on December 11, 2012 at 1:03 PM

blink on December 11, 2012 at 1:01 PM

You can’t call those actual facts, they are possibilities. And you don’t know that a few days of discomfort wouldn’t have produced a better solution. NOBODY KNOWS! So my speculation is every bit as viable as yours.

Cindy Munford on December 11, 2012 at 1:05 PM

I knew you were going to point towards the LIBOR issue as if it had anything to do with the financial meltdown of 2008 – which it absolutely did not.

blink on December 11, 2012 at 1:00 PM

with the greedy and corrupt “masters of the universe” managing our economy, no wonder 2008 happened.
I think this conservative belief that 2008 was caused only by “government intervention” is delusional. it was only part of the problem! by all means privatize fanny and Freddie but I don’t understand why we should be so much against financial regulations. its obvious that the “high rollers” that command our economy have the ethics of children on a candy shop.

nathor on December 11, 2012 at 1:06 PM

I’d like to see the House put Obama’s plan up for a vote with all Republican House members promising to vote Present. If it passes, then it passes. It’s all on the Dems. If it’s defeated by only House democrats, then Obama will lose a heck of a lot of credibility.

blink on December 11, 2012 at 12:58 PM

Yep.

Cindy Munford on December 11, 2012 at 1:07 PM

No, but the bailout and TARP were justified for other reasons. As Blink has already suggested, the collapse as it was was bad but would have been catastrophic had the inevitable chain reaction of failure been allowed to run free through the US and global economy. These are not institutions you can build from scratch or be re-floated efficiently after bankruptcy.

AIG is the sole provider of a range of vital risk services. Like the banks, they are part of a vital infrastructure for commerce. More important than the p&l sheet for TARP is how we avoid being so beholding/vulnerable to a few corporate players in the future. Our economy could benefit from having more competition and healthy diversity when it comes to the financial sector. AIG and the large banks are still intact and we are still vulnerable to the same disease which led to TARP.

lexhamfox on December 11, 2012 at 12:17 PM

Agreed.

jimver on December 11, 2012 at 1:08 PM

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