AIG reporting they finally won't need more taxpayer money

It's only taken about $200 Billion, give or take a few, but AIG is reporting they don't need anymore bail out money.

American International Group Inc., the insurer rescued four times by the U.S., may post first-quarter results this week that don’t trigger a new capital injection from the government, said three people familiar with the matter.

The insurer will report that results in the first three months of 2009 improved from the record $61.7 billion fourth- quarter loss that New York-based AIG posted in March, according to the people, who declined to be identified because the firm scheduled its earnings announcement for May 7.

CNN money has a bail out tracker on all of the money doled out, which may or may not be accurate.

Report says U.S. May Convert TARP Bail Out Money to Common Shares

Now that the Treasury and the Federal Reserve have burned through all of the TARP money without a prayer's chance of Congress approving more, a new tactic is being reported:

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

Goldman Sachs Selling Stock to Pay Back TARP

Now here is an interesting story:

Goldman Sachs Group Inc., by selling stock to help it repay $10 billion to the U.S. Treasury, may pressure competitors to follow suit or appear dependent on government support, analysts said.

The company, scheduled to report earnings April 14, is considering announcing the share sale as early as next week, the Wall Street Journal reported yesterday, citing unidentified people familiar with the matter. Lucas van Praag, a spokesman for New York-based Goldman Sachs, declined to comment.

Now while the report states Goldman Sachs owes $10 Billion, the reality is, through AIG, Goldman Sachs received $12.9 billion.

I'd say that's a very nice free profit by getting 100% payouts via AIG.

Stress Test - What a Surprise, all the banks pass....yet need another round of bail out money

You're gonna love this one, according to the New York Times as the Treasury laboriously pours over banks books, all of the banks are passing their stress tests.

They are discovering may come as a relief to both the financial industry and the public: the banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say.

That is the good news. The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say.

Elizabeth Warren Interview - Paulson Lied to Us on TARP Exchanges

Elizabeth Warren, Congressional Oversight Panel Chair for TARP funds did not say Paulson lied. But to fit it in the title of the Instapopulist, I am summing it up for you.

Below is a Bloomberg interview where when COP cranked the numbers, they discovered for every dollar given in TARP funds, on the day it was given, the United States received 66¢ in shares, warranties. In other words, former Treasury Secretary Hank Paulson told the panel one thing, that the funds with a direct 1:1 ratio exchange for stocks and warrenties and the reality was another, by the numbers. It was a $78 Billion dollar subsidy with no return, straight out of the box and this is the actual day of transaction. In other words a $78 billion giveaway to the banks.

Now Insurance Companies Can Get U.S. Taxpayer TARP Money too

The blood that keeps on bleeding. Life Insurance Companies to get TARP funds:

The U.S. Treasury said on Wednesday some life insurers have met requirements for government capital investments under an existing rescue plan, clarifying that it is not launching a new bailout for the sector.

"There are a number of life insurers that have met requirements for the Capital Purchase Program because of their bank holding company status," said Treasury spokesman Andrew Williams. "These are among the hundreds of financial institutions in the CPP pipeline that will be reviewed and funded as appropriate on a rolling basis."

The statement was made in response to a Wall Street Journal story published late on Tuesday saying the Treasury would extend its $700 billion financial bailout program to certain life insurers and would make an announcement in coming days.

Will Elizabeth Warren become the new Brooksley Born?

In an article published today in The Observer, it is reported that Elizabeth Warren, Chair of the Congressional Oversight Committee of the TARP program, will issue a report this week calling for the ouster of the chief executives of Citigroup, AIG and other institutions which have received government bailout funds.

Additionally, Professor Warren is reportedly also set to call for shareholders in those institutions to be "wiped out". "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade."

The article goes further:

William Black on Bill Moyers Journal drops bailout bomb on Obama

This evening, Bill Moyers interviewed William K. Black, the former senior regulator during the savings and loan crisis of the 1980s, who blew the whistle on the Keating Five (the U.S. Senators implicated in taking “gifts” from S&L bankster Charles Keating was convicted of racketeering and fraud in both state and federal court after his Lincoln Savings & Loan). Black is now an Associate Professor of Economics and Law at the University of Missouri, and the author of the recently released book, The Best Way to Rob a Bank is to Own One.

Bailouts create disincentives.

We are now in the eighth month of extraordinary efforts to reverse the financial crisis. Tillions of dollars have been spent or guaranteed with the stated goal of getting the banks to lend again. Many acronymic plans like TARP, TALF, PPIP and countless others have been devised to accomplish the goal. Yet, it seems that for all the efforts of the Fed and Treasury, little has been accomplished, other than reward bad behavior in the Financial Markets. The more they direct their efforts only toward the largest institutions, the better the hedge becomes for bondholders everywhere. This has been the achilles heel of all the bailout plans, going back to Paulson/Bernanke and right up until today.

I think Joseph Stiglitz has been out of the country for an extended period or we would have heard more from him about the PPIP. He was recently interviewed by Der Spiegel in which he makes a suggestion that is the antithesis of the governments efforts to date.

Bloomberg details the PPIP program - $1 trillion write downs

Bloomberg has discovered some of the details of the "private-public investment partnership":

U.S. regulators may force lenders including Citigroup Inc. and Wells Fargo & Co. to sell assets and write down as much as $1 trillion in loans, twice what they’ve already recorded, based on Federal Deposit Insurance Corp. auction data compiled by Bloomberg.

Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.