From the WALL STREET JOURNAL:
The Federal Reserve Bank of New York on Thursday sold the last toxic assets it acquired from the bailout of American International Group Inc., AIG +0.63%closing the book on its most controversial intervention during the financial crisis with a large gain to taxpayers.
The regional Fed bank said it reaped $6.6 billion in profits from selling complex mortgage securities that it took on in late 2008 to stem AIG’s cash bleed. The securities, known as collateralized debt obligations, were chiefly responsible for the New York-based insurer’s near-collapse and government bailout after their market values plunged during the financial crisis.
The sales end one of the most contentious elements of the government’s efforts to stabilize the financial system as markets were seizing up and banks and other financial institutions were collapsing. The rescue of AIG and the New York Fed’s purchases of mortgage securities that AIG previously owned or insured saw tens of billions of taxpayer aid flow from the insurer to banks in the U.S. and overseas…
Click here to read the full article.
EDITOR: Of all of the government’s investments in 2008, this was considered the ultimate bail out … highly unlikely ever to be recouped, let alone earn $6.6 billion. Amazing! Will anyone give credit to Barack Obama’s administration and the Federal Reserve for this? The article was virtually buried on the WSJ web site.
