US Government sells last stake in AIG; bailout resulted in profit for taxpayers.

Good article. I know that HAMP did nothing to help my mother-in-law who tried to enroll in the program but was stonewalled by the bank and finally lost her home this last summer.

MacBrave wrote:

Good article. I know that HAMP did nothing to help my mother-in-law who tried to enroll in the program but was stonewalled by the bank and finally lost her home this last summer.

Yeah. We looked into it and just didn't see anything good so we kept paying the higher payments. Thankfully we can currently afford it.

MacBrave wrote:

Good article. I know that HAMP did nothing to help my mother-in-law who tried to enroll in the program but was stonewalled by the bank and finally lost her home this last summer.

HAMP was a really good idea that was executed poorly and given no accountability. I think this last fall they finally streamlined the process enough to help it do what it was billed to do, but it's way too late for most.

Robear, you really should read that article, and internalize it. The whole program was started under false pretenses, run under false pretenses, and 'repaid' under false pretenses. It was a web of lies, utter and complete, one of the larger frauds in American history.

At least, with the Iraq war, after paying all that money, we got a client state out of the deal. In this case, we've become the client state.

Will do.

The headline says it all, except for the part that bailouts are part of the fabric of the US's most fundamental economic roots and policies. That was more or less the grand purpose of the first Bank of the US. Our first bailout was had under Washington. It is nothing really that new, it just keeps getting larger.

Hell, one of the oldest get rich quick scams has been sold as the solution to the last one-prospecting, mining, and speculating on coal, gas, and oil.

There are many unhealthy repetitive behaviors in the US and World Economy that need fixing.

Seriously?

AIG may join bailout lawsuit against U.S. government

(Reuters) - American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion, drew angry condemnation on Tuesday after it said it may join a lawsuit against the government alleging the terms of the deal were unfair.

That's why companies that have failed should be allowed to fail. Insane.

The justification seems to be "the bailout screwed shareholders out of money". And I have to say that I really do not fathom that one bit, but I can believe there may be something I'm missing here. From what I can tell, though, the bailout kept the company afloat, where otherwise the shareholders would have gotten nothing. What am I missing?

Wall Street execs who believe they could have saved the company and done better than with the bailouts. We should have let them find out on their own.

Given that these companies were failing, and fast... can they really sue for money that they "could have earned" if they hadn't been saved? It's like that guy who sues Mr. Incredible for saving him from leaping to his death, just don't get it and don't know that I could ever wrap my brain around it.

Robear, you really should read that article, and internalize it. The whole program was started under false pretenses, run under false pretenses, and 'repaid' under false pretenses. It was a web of lies, utter and complete, one of the larger frauds in American history.

Malor, since you addressed this to me directly, I'll point out that I've criticized just about all the points raised by Taibbi, as they happened - I agree with his analysis if not every word of his hyperbole. The fact that we actually got *some* money back on the bailouts is what prompted me to start the thread, not some knee-jerk "it's all good" stance. Given that we *could* have seen a crash of the banking system, and we *could* have seen *nothing* come back, yeah, the AIG bailout and TARP were bargains. We could have lost more. We could definitely have done better with adults in charge, too. Remember, I strongly backed Elizabeth Warren and her crusade to fix this stuff.

Should we have bailed out the original failing banks? Yeah, probably, I think that was a good call given the alternatives. I called for them to be strongly administered and regulated. I backed the hard form of the regulatory proposals put forth in the next few years, the ones that consistently got shot down the Wall Street interests. I pointed out the policies that had led to the current problems, like getting rid of Glass-Steagal, and suggested solutions at times. I supported the idea of using bailout funds for homeowners in trouble. I supported the proposals that banks and investment house and insurance firms should not be held by the same companies. I criticized the movement of the financial markets to more and more risky products. I criticized the profits made by banks. I noted that they were not lending, which was supposed to be the cornerstone of the recovery. I criticized the executive bonuses made while they were supposedly in dire straits. I worried about whether we'd be paid back at all by companies like GM and AIG (hence my post). I criticized the corrupt rating system used for judging the safety of investment products. I've noted that the whole bailout seems to have been people "winging it", with some successful ideas but a lot of failures.

I was expecting a lot of things I didn't know in that article. Instead, there's a lot there that I had not only internalized, but had taken stances on here based on Taibbi's earlier writings (and others by similar investigators) that agree with what Taibbi is saying here, in broad strokes. I avoid sweeping statements and conclusions, I dislike conspiracy theories, and we disagree on things like the Gold Standard, but we also have a lot of conclusions in common, regardless of how we get there. This article is one example of that. While we may disagree on the exact solutions, I think we both agree on most of the problems (again, modulo the basic disagreements on economic systems.)

(This would all be much easier face to face, I suspect.)

Hypatian wrote:

Seriously?

AIG may join bailout lawsuit against U.S. government

(Reuters) - American International Group Inc, the insurer rescued by the U.S. government in 2008 with a bailout that ultimately totaled $182 billion, drew angry condemnation on Tuesday after it said it may join a lawsuit against the government alleging the terms of the deal were unfair.

It looks like sanity has prevailed and AIG's BoD has decided not to join the lawsuit filed by its former CEO, Hank Greenberg, and his company, Starr International.

The AIG's current CEO, Bob Benmosche, said "It is not acceptable socially for AIG to have taken this money and to think we can go back and sue the government."

Interestingly, AIG's Board has also decided that it's going to step into the legal fray to make sure Greenberg and Starr can't sue the government on behalf of AIG.

I wonder what the potential endgame was, anyway? I mean, if the suit went through and AIG proved they would have done better without the bailout... wouldn't taking the bailout money constitute fraud?

Bloo Driver wrote:

I wonder what the potential endgame was, anyway? I mean, if the suit went through and AIG proved they would have done better without the bailout... wouldn't taking the bailout money constitute fraud?

As with most lawsuits over stock performance, I imagine the end game for Greenberg and his company was to extort a fat settlement check out of AIG to make it go away or sweep it up into a big class action lawsuit and then take it to the courts where he'll hope for the courts to award him a fat damages check.

Malor wrote:

Robear, you really should read that article, and internalize it. The whole program was started under false pretenses, run under false pretenses, and 'repaid' under false pretenses. It was a web of lies, utter and complete, one of the larger frauds in American history.

At least, with the Iraq war, after paying all that money, we got a client state out of the deal. In this case, we've become the client state.

I read the article, and I like it a lot and think it's a good description of why the bailout were such a cluster f*ck. However there was nothing in there that disproved the Robes initial point that the US got more money selling its shares than it did buying them.

After the Fed printed trillions of dollars to artificially juice the economy and the banking system.

Malor wrote:

After the Fed printed trillions of dollars to artificially juice the economy and the banking system.

The two are linked, but separate. The massive influx of cash, experts said and I have not seen this refuted, was to create a false gold rush. Historical economists studying the milder recession of the mid 1800's point to the precious metal rush on the west coast as a significant tempering effect on what should have been a much harder recession/depression. And it was only after a huge influx of cash in the 30's that the US economy began to turn around.

The massive influx of cash, King Gorilla, just made sure that absolutely nothing really got fixed, and it set the stage for the next collapse, wherever that ends up being. And it will be even bigger than this one was, just like the 2008 crash was so much worse than the one in 2001.

This is a very good news for taxpayers! But what is the main purpose of this? It was reported recently that after all was said and done, the bailouts done by the federal government were likely to turn a profit. That has just been confirmed, as part of the last of the government's stake in AIG was recently sold making for almost $18 billion in profit from the AIG bailout.