Hacker News Reader

Comment by boushley | Hacker News Reader

Doesn't the government own 92% of the company? How can the company make any decision they don't approve of? Did they buy 92% and have no voting power?

View on HN

The government now own no shares in AIG, it was paid back in full and with interest. In fact, the US made $18 billion profit from AIG: http://abcnews.go.com/Business/government-makes-177-billion-...

The accusation is that the government used AIG to bail out the rest of Wall Street, forcing AIG to settle trades with big name Wall Street companies for a loss. And on top of that, the gov't charged 14% interest on the money it lent.

Yes, they could have "not accepted" that deal. But there are two sides to this.

Trades that AIG took at fair terms. Sorry, but if an insurer insures something, it better damn well pay what it promised.

Even without reading through the article first, I knew that you were referring to TARP. They might've gotten a "profit" on TARP, but the government gave them a lot more than just TARP, through other programs, and some of the banks even used the money from other programs that they were supposed to use to finance small businesses, to pay back the TARP loan.

Bottomline is, the government may have gotten the money back on TARP, but I think they gave the banks a lot more, and it was a net loss. I mean we didn't even know about the $7.7 trillion the Fed printed to loan to banks in both US and through out the world. Those loans were secret. How do we know they paid them back or not?

Um, thats a misreading of the old Bloomberg report that invented the $7.7 trillion figure. Actual loans appear on the Fed balance sheet. The Fed offered 7.7 trillion in loan guarantees over a period of time, many of which were quickly wound down, which is a very different matter. The Fed currently has a balance sheet of $2.8T: 1.6T is government loans, about 1T are mortgage backed securities from the 2008 crisis.

See http://m.washingtonpost.com/blogs/wonkblog/post/no-the-fed-d...

and

http://www.econbrowser.com/archives/2011/12/777_trillion_in....

Reply on news.ycombinator.com