Bailout of AIG and GM getting paid off

American International Group and General Motors have been making good progress in paying the United States Treasury back for the bailout loans both corporations received. Despite huge national corporations having to admit defeat and ask for help, both have turned around relatively quickly and made payments on their debt. GM recently posted its largest profits in years. AIG is slowly paying down its balance, though it was the single largest recipient of bailout funds.

Selling MetLife stock so Treasury financial loans could be paid

MetLife insurance shares are being sold off by insurance giant American International Group. USA Today reports that this is how AIG is paying back the United States Treasury for loans. About 146.8 million shares of MetLife stock was sold by AIG getting $6.3 billion for United States Treasury payments. In order to make an effort to buy back the $18.2 billion American International Group shares the Treasury currently owns, American International Group is using the funds. Currently, the government also owns about 92 percent of AIG's common stock. This is because part of the Troubled Asset Relief Program, or TARP mandated this take place. With over $182 billion in financial loans total, AIG got more from the bailout than everyone else. The business received $68 billion in loans. This was after the Treasury and Federal Reserve bought the company's toxic assets.

General Motors coming back

About $49 billion was borrowed from the government for GM during the bailout which the company now wants to pay back. There was a profit for General Motors in every quarter of 2010. This was announced by GM recently, reports Reuters. This marks the first time since 2004 that the automaker has been profitable for an entire year, and it made the largest profit since 1999. GM posted a profit of $4.7 billion for 2010, though the stock price for the business has barely moved since the initial public offering in Nov. About 33 percent of GM stock is the property of the Treasury still. Considering it was at 61 percent in Nov 1010, that is a huge improvement. It is projected the General Motors share price may have to rise to $53 per share for the government to break even.

Was Troubled Asset Relief Program worth it?

The cost of the money going to the housing crisis is more than the cost of putting money to the corporate bailout, David Miller said. Reuters reports that Miller is the chief investment officer for the TARP. Miller said the Congressional Budget Office estimates that TARP will cost a total of $25 billion, and the Obama administration estimates slightly more than $28 billion. Timothy Geithner is the Treasury Secretary. He claims that the $25 billion estimate is higher than it needs to be. Various companies still owe the government $135 billion for Troubled Asset Relief Program financial loans.

Citations

USA Today

usatoday.com/money/economy/2011-03-02-aig-bailout-metlife_N.htm

Reuters

reuters.com/article/2011/02/24/us-gm-idUSTRE71N0ZD20110224

Reuters

reuters.com/article/2011/02/25/usa-treasury-tarp-idUSN2524950220110225