Lehman Brothers filed for bankruptcy four years ago this week, plunging the global economy into chaos and triggering massive bailouts of the financial sector. Few bailouts were as controversial or scary as the government's rescue of AIG, which ultimately totaled $182 billion in multiple installments.
After selling 554 million shares of AIG on Monday -- the fifth such sale in the past 18 months — the U.S. Treasury Department has reduced its stake in the insurer to 22% from 92% in early 2011. More importantly, the Treasury says it has now turned a profit of $12.4 billion on the AIG bailout.
The Treasury's claim is somewhat controversial: Neil Barofsky, former TARP Special Inspector General, says the Treasury's cost basis on AIG is $43.53 a share, not the $28.73 cited by Treasury. (Monday's sale was at $32.50 per share.)
Barofsky is "technically correct that if you isolate the original cost to TARP for its investment in AIG," writes DealBook's AndrewRead More »from AIG Bailout Better Than Expected for Taxpayers, (Still) Even Better for Banks