Daily News: December 10, 2013

Treasury Sells Final Shares of GM Stock; Loses $10.5B

As the Troubled Asset Relief Program (TARP) continues to wind down, the U.S. Department of the Treasury announced that it has sold all of the remaining shares of General Motors (GM) common stock.

The Treasury said it recouped a total of $39 billion from the original GM investment. According to a related AP story, the government received 912 million GM shares or a 60.8% state in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. The government therefor ended up losing $10.5 billion on the bailout but says the alternative would have been much worst (see below).

“The President’s leadership in responding to the financial crisis helped stabilize the auto industry, and prevent another Great Depression. With the final sale of GM stock, this important chapter in our nation’s history is now closed,” said Treasury Secretary Jacob J. Lew. “The President understood that inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production. As a result of his efforts, which built on those of the previous Administration, more than 370,000 new auto jobs have been created, and all three U.S. automakers are profitable, competitive, and growing.”

To date, the Treasury said it has recovered a total of $432.7 billion on all TARP investments – including the sale of Treasury’s shares in AIG – compared to $421.8 billion disbursed. Treasury will continue to wind down the remaining investments in a manner that balances maximizing the taxpayer’s return on investments with the speed of our exit.