Bailouts, U.s. Treasury | featured news

The U.S. government's short stint in the auto business is coming to an end. The Treasury Department said Wednesday that it will sell its remaining stake in General Motors by early 2014, writing the final chapter of a $50 billion bailout that saved the auto giant but stoked a heated national debate about the government's role in private industry.

The U.S. Treasury further reduced its stake in American International Group and said on Tuesday that the United States would now profit $15.1 billion from bailing out the insurer.

Fannie Mae and Freddie Mac, the two mortgage-finance giants, this week reported some of their best quarterly results since the real estate collapse. On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.

The U.S. Treasury Department launched its fourth sale of shares in American International Group, with the insurer committing to repurchase two-thirds of the $4.5 billion in shares being offered to the public.

The Troubled Asset Relief Program calmed markets and underpinned the US economy during the financial crisis. But despite the US Treasury saying last week that Tarp would make a profit, the latest report suggests otherwise. The report said it was a "misconception that Tarp will make a profit".

Shares of American International Group Inc fell more than 3 percent on Wednesday after the insurer and the U.S. Treasury sold $8.7 billion worth of stock.

The Treasury department said on Tuesday that automaker Chrysler Group LLC has repaid $5.1 billion in bailout loans and ended its ability to draw a remaining $2.1 billion.

Troubled insurer AIG is to repay a $21bn bail-out loan, paving the way for a share sale by the US Treasury.

Treasury updated its projections for the cost of the 2008 Troubled Asset Relief Program, saying that for the first time the amount of funds that has been returned to taxpayers exceeds $250 billion.

The Treasury Department said Monday it will begin selling the stake it owns in Citigroup Inc., which could result in a profit to the government of about $7.5 billion. Government received 7.7B shares in exchange for $25B it gave the banking firm during credit crisis.