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GOVERNMENT PROFITS FROM SALES OF AIG SECURITIES AND SHARES Group, Inc. (AIG) at a price tag of $182.3 billion, Treasury and the Federal Reserve are expecting to see their full investment back, plus a return. Treasury proceeds from a public offering After bailing out American International of AIG stock announced in September were estimated to reach $20.7 billion, with the total number of shares sold topping out at 636.9 million. AIG itself purchased 153.8 million shares, which amounts to $5 billion of the expected proceeds from the sale. "Taking action to stabilize AIG during the as of September 11. With last month's public offering, Treasury's ownership of AIG shares has fallen from 53.4 percent to 15.9 percent. In late August, the Federal Reserve Bank of New York announced the final sale of its remaining securities from the AIG bailout. The Fed has been shedding its AIG securities since early 2012 after usurping three Maiden Lane mortgage-related portfolios from the insurance company more than three years ago. The Federal Reserve and the Treasury financial crisis was something the government should never have had to do, but we had no better option at the time to protect the American economy from the damage that would have been caused by the company's collapse," commented Treasury Secretary Timothy Geithner. "To stabilize and then restructure the company with a very substantial positive gain for the American taxpayer is a significant accomplishment." Treasury originally invested $69.8 billion in AIG's rescue and had recovered $67.2 billion stepped in to aid AIG, the world's largest insurance company, in 2008 when the company was teetering on the edge of collapse. AIG's failure "posed a direct threat to RESEARCHERS SUGGEST 'KELLEY BLUE BOOK' OF REAL ESTATE TO LIMIT BUBBLES Miami School of Business Administration suggests fragile market bubbles could be prevented if the public were aware of how assets are valued. The research, set to be published in the A study completed by the University of millions of policyholders, state and local government agencies, 401(k) participants, banks, and other financial institutions in the United States and abroad," according to the Fed. The U.S. central bank originally invested $112.5 billion in AIG's rescue. It has recovered a total of $130.2 billion from the sale of the Maiden Lane Securities as well as loans, interests, and fees repaid by the company. AGENCIES PROPOSE NEW APPRAISAL RULES set of rules to go by when it comes to appraisals. A proposed rule from six federal agencies would set out new requirements when conducting appraisals for higher-risk mortgages. For example, the rule would require Higher-risk mortgage loans may have a new creditors to use a licensed or certified appraiser when preparing reports based on the physical inspection of a property. Creditors would also need to provide borrowers a free copy of the appraisal report and disclose the purpose of an appraisal. An additional appraisal at no cost to the loans to be categorized as such based on the following criteria: they must be secured by a borrower's home and have interest rates exceeding a certain level. The rule is being issued by the Federal The Dodd-Frank Act call for higher-risk Reserve, the Consumer Financial Protection Bureau, the FDIC, the Federal Housing Finance Agency, the National Credit Union Administration, and the Office of the Comptroller of the Currency. The public has until October 15, 2012 to consumer would also be required from creditors if the seller acquired the property for a lower price during the previous six months. This requirement is to address fraudulent property flipping by checking if the property's value saw a legitimate increase, federal officials explained. According to a release from the agencies, the Journal of Financial and Qualitative Analysis, analyzed China's 2007 stock market. During that bubble period, stock prices tripled as activity nearly quadrupled, only for both to return to normal levels after the bubble deflated. The study found that stocks with a bigger amount of analyst coverage experienced significantly smaller bubbles than those that weren't covered. For example, stocks with 20 analysts reporting on them developed bubbles more than 60 percent less severe than stocks with no coverage. Researchers say the lessons learned from China's example can easily be applied to the real estate market with similar effects. "We ran into trouble with the recent housing bubble because novice buyers falsely assumed there would always be a future buyer willing to pay more," said Timothy R. Burch, associate professor of finance at the University of Miami and one of the survey's conductors. "This problem is much more severe when there is greater investor disagreement about an asset's value. Our research shows that making relevant information about an asset readily available reduces disagreement, which in turn makes bubbles less severe." The team suggests governments and comment on the proposed rule. In addition to the proposed requirements for regulatory bodies should freely disseminate information about transactions, appraisals, rental yields, vacancies, and other facts about a property to "level the playing field" for market participants. This, they said, should help limit bubbles. "The Federal Reserve or another government proposed rule implements amendments to the Truth in Lending Act (TILA), changes enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 46 higher-risk mortgages, the CFPB also released a separate proposed rule requiring lenders to provide free appraisal reports. In the bureau's proposal, creditors would need to inform applicants of their right to a free appraisal report within three days of applying for a loan, and creditors can charge "reasonable" fees associated with conducting the appraisals, but not for providing a report. body could take steps to help coordinate the beliefs of all the players in the real estate market," said Sandro Andrade, researcher and associate professor of finance at the University of Miami. "This could be achieved by creating a 'Kelley Blue Book' for real estate, a centralized, well-promoted website where everyone could go before making real estate decisions. Providing such information could go a long way in reducing the odds and severity of future real estate bubbles."

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