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On August 23, the NY Fed successfully unloaded the last of its toxic AIG mortgage-backed securities. Now, the US Treasury is selling $18 billion of its AIG shares to the public, with an additional $2.7 billion available to cover investor demand. (Citi, Deutsche Bank, Goldman and JPMorgan are carrying Uncle Sam's water as joint global coordinators.)
The sale will bring the government's stake down from 53% to as low as 15%, as Damian Paletta, Erik Holm and Serena Ng write in the WSJ:
A near-exit by the government from one of the most controversial bailouts is both a significant accomplishment for the Obama administration and a sign of how far the markets have come in four years, thanks in part to the rescue of financial companies and the Fed's efforts to support the economy by reducing interest rates.
But the sale could also renew complaints that Treasury still hasn't outlined a concrete strategy for exiting other large financial-crisis investments... The government remains in the red on its investments in Fannie and Freddie, which have received $188 billion in taxpayer support. The US continues to hold sizable stakes in General Motors and Ally that it spent $68 billion on and may not fully recover.