U.S. to profit from selling remaining stake in AIG
It looks like the U.S. government’s rescue of insurance giant AIG is coming to an end. And, amazingly enough, it’s a happy ending: The government is selling the last of its AIG stock — for a profit.
But it’s been a long and bumpy road.
Here’s CNBC’s Maria Bartiromo four years ago: “It was an historic day with Wall Street shaken to its very foundation today.”
That historic day was September 15, 2008. CNBC reporter Mary Thompson stood outside AIG’s headquarters with the bad news.
“Late breaking news tonight, AM Best as well as Fitch cutting their ratings on AIG,” she said. “Keep in mind it has assets to sell but it needs both time and money to tide it over until those sales go through.”
AIG got the time and money it needed. Taxpayers threw the company a lifeline.
At one time, the government owned more than 90 percent of AIG. Now, the Treasury Department is announcing the sale of its remaining shares in the company.
AIG is out with a cheerful video talking about how it’s kept its promises to the U.S. government.
How did AIG do it?
Joel Naroff of Naroff Economic Advisers says the company sold off lots of assets, concentrating on its core insurance business.
“Some of the really risky kinds of investments that got them into trouble have been unwound,” he says. “They’re doing what they were doing originally. They’re really back to the more basic kind of business.”
Investors like that. The stock has been rising, and as of today the government has made a profit of more than $22 billion — from its initial AIG investment of $182 billion.
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