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AIG Sells Two Insurance Units In Effort To Repay Government Bailout

November 9, 2010 by  

AIG sells two insurance units in effort to repay government bailoutInsurance giant American International Group (AIG) says that it has raised nearly $37 billion that will be used to repay the government bailout.

According to The Associated Press, AIG has sold insurance unit American Life Insurance Co. (ALICO) to MetLife for $16.2 billion, which follows last week's $20.51 billion sale of AIA Group Ltd. The New York-based company said the two transactions will be used to further pay off its debt created by the Troubled Asset Relief Program (TARP), which supplied the company with up to $180 billion in aid.

"We promised the American taxpayers we would repay them and the initial public offering of AIA last week and the completion of the ALICO transaction move us closer to delivering on our promise," AIG CEO Robert Benmosche said in a statement, quoted by the news provider.

As part of the repayment, the government holds a bigger stake in AIG and will eventually sell common stocks in the company. The Treasury Department said in a Nov. 1 release that it would make a profit if the value of AIG's stock and other investments remains at current prices, according to the news source.

The New York Times recently reported that the bailout program, which was signed by former President George W. Bush in 2008, may end up costing taxpayers less than $50 billion, rather than the $700 billion that had been set aside originally to pay for it. Matthew Yglesias of the Center for American Progress said the bailout is "one of the most unfairly maligned policy initiatives of all time," the news provider reports.

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  • J.M.R.

    thats really to bad haha. the bailout should have never been allowed, but when the dick-tater moves his libs all liberals jump right nancy

  • FlaJim

    This is really a shame. AIG was one of the most profitable and largest insurance conglomerates in the world but the feds bullied them to put too much of their reserves (money set aside to pay future claims) into ‘securities’ backed by faulty mortgages. The implicit understanding was that the government backed those loans when, of course, it only did so under duress. Fannie Mae and Freddie Mac never really did pay off.

    The feds used the same tactics on AIG as they used on the banks: invest in these ‘securities’ or we won’t allow any expansion or acquisitions.

    This is a prime example of why the government should never be involved in the marketplace. It never makes decisions based on sound business practices.

    • Warrior

      How about the government start selling most of the property is has stolen from the states. Looks like a good debt reduction program to me.

      • 45caliber

        I agree. But only if they sell to anyone and only if they sell at market value. I would suspect that any “sale” they intended would be for cents on the dollar to a friend or family memeber.

        • Warrior

          Agreed, and Mexico can’t purchase any of it either.

          • 45caliber

            Nor any other country. It is amazing just how much of the US is owned by people from other countries. Half or more of Hawaii is owned by the Japanese. It’s so bad there they now have a state law banning sale of anything else to the Japanese without state permission!

          • http://?? Joe H.

            45caliber,
            that law, if I remember right, is that nobody not Hawaiian born can buy any property in Hawaii without state permission!!

  • Mary

    what will the money be used for? Hopefully to pay down our debt??

    • Proud to be a Christian

      Pay down debt you say, Heck no, for future trips. Now we are going to have to give a president and first lady a budget because of this presidents personal expenditures and vacations.

      • 45caliber

        He’s “not” vacationing – she is. However, I do agree with you. He seems to spend most of his time on these “business trips” taking tours of vacation spots. He wants to check out a museum in India – and demands a 1 mile tunnel so he can safely get to the museum from his hotel without having to expose himself to any danger. Cost? Who cares? He certainly doesn’t!

    • CJ

      Mary, it that’s what you “hope” for, you really don’t understand how our monetary system works. If it were that simple, we wouldn’t need accountants. You can’t simply cancel one debt with another inflow of cash. May I suggest a little research into this very complex system?

    • 45caliber

      When Reagon was in office, he appointed a commission to find a solution for our debt. They found we didn’t really have one.

      It seems that when the FHA forecloses on a failed loan, they get the property to resell – and they get an insurance payment that covers the price of the house. They were buying bonds from other countries and at that time had nearly three trillion dollars worth of them. I don’t know what they have bought since. From what I understand and guess, we still don’t have much of a debt IF we could simply trade their bonds for ours. But I sincerely doubt if any country will do that. Most countries believe that any bonds they sell us are simply free money. They never have to reclaim them.

  • 45caliber

    I suspect they discovered all the strings attached and didn’t like them.

  • jopa

    No matter how you look at it a loss of $50 BILLION is still a lot of money that Bush gave to the banks.The payback is more than we expected though thanks to President Obama.He will truly go down as the greatest president of all time (Obama) when it is all said and dome.

    • JimH

      jopa, 50 billion that the Dem congress spent at Bush’s request IS a lot of money. So that should make the almost TRILLION dollars the Dem congress spent an obscene amount of money. At least the Bush money is posible to pay back, unlike the Obama. Pelosi, Reid, money.(the greatest president of ALL time?) I looked in a picture dictionary under the word brainwashed and there was a picture of your smiling face.

  • http://com i41

    jopa, your alligator mouth over loaded your canary brain again. The “Omoron Lite” FDR start the whole damn mess with Fannie Mae monet crap, Peenut Carter sped it up and Whorehound kicked it into high gear, by telling banks to put more “minorities” in shacks. Between your two anal buddies, Blarney and Perver Dodd pushing more Freddie and Fannie no money down loans, to the lazy a$$ed “minorities” who live from fix to fix. Ir finally broke the bubble by the manulipations in Sept 2007 with dumping and bundling of failed junk home loans. You sorry nano minded NMCDUP rump kissers of Onumnutts and socialist head bobbers approving the socialist mantra veiws, always ruin any business, they get their fingers in. Just like SS, medicare, and now healthcare, what a convoluted mess all socialist democrats always create when their lips move.

    • 45caliber

      You’re right – but I very much doubt that jopa or any other liberal will believe you. All they can see is Bush and all they want to do is blame all their own bad choices on him with the expectation that their “hero” will give them all the money when he really gets time.

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