American International Group and GM paying on bailouts

Bailout receiving firms AIG and General Motors have both made real progress in paying off the financial loans the companies received from working class individuals. Despite huge national corporations having to admit defeat and ask for help, both have turned around relatively quickly and made payments on their debt. No single entity received more money in the bailouts than AIG, which has been dutifully making payments. Source of article – AIG and General Motors make strides in repaying bailouts by MoneyBlogNewz.

Selling MetLife stock so Treasury loans can be paid

USA Today reports that AIG, insurance giant, is paying of the United States Treasury by selling off shares of MetLife insurance. About 146.8 million shares of MetLife stock was marketed by American International Group getting $6.3 billion for United States Treasury payments. In order to try to purchase back the $18.2 billion AIG shares that the Treasury currently owns, AIG 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. When it comes to the bailout, AIG received the most in financial loans. Over $182 billion was lent to the company. The company received $68 billion in financial loans. This was after the Treasury and Federal Reserve bought the company's toxic assets.

General Motors on the road to health

General Motors has been working hard to pay the government back for bailout funds received. About $49 billion was lent to the business. GM recently declared in an earnings report that the business had made a profit every quarter of 2010, according to Reuters. The largest profit since 1999 was reported by General Motors while this is the first time the company has been profitable for a whole year since 2004. For 2010 profits, General Motors reported $4.7 billion was made. Nevertheless, the first offering stock prices in Nov haven't changed at all since. Since Nov 2010, when 61 percent of General Motors stock was owned by the Treasury, there has been great improvement since now the government only owns 33 percent. The government needs General Motors share prices to go up to $53 a share. That is the only way the government will break even on the loan.

End result of TARP

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. You will find several companies that owe the government nevertheless. About $135 billion in TARP financial loans are nevertheless owed.

Articles cited

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