NY Fed repaid for two bailouts
The Federal Reserve Bank of New York said Thursday that loans it set up to help facilitate the bailouts of American International Group Inc. and now-defunct investment bank Bear Stearns during the financial crisis have been fully repaid with interest. The government stepped in with a $182.5- billion package to rescue New York-based AIG from collapse in the depths of the financial crisis in 2008. It was the largest bailout in history. The Treasury Department still owns about 60 percent of AIG's common stock and has been selling its shares in chunks. Treasury has recovered $38 billion of the $68 billion it gave to AIG. The government also helped broker a rescue sale of Bear Stearns to JPMorgan.
Government safety regulators have expanded an investigation into gas tank fires in older-model Jeep Grand Cherokees. The National Highway Traffic Safety Administration said Thursday that it has added some Cherokee and Liberty models to the probe, which began nearly two years ago. The probe now covers an estimated 5.1 million vehicles and is focused on the SUVs' gas tanks, which are mounted between the bumper and rear axle. The tanks can be damaged in a rear-impact crash and leak, causing fires. The agency says 15 people have died in 26 Grand Cherokee fires. None of the SUVs has been recalled. Chrysler, which makes Jeeps, says the vehicles meet federal safety standards.
Jobless-benefits bids rise
More Americans sought unemployment aid last week, suggesting hiring remains sluggish. The Labor Department said Thursday that weekly unemployment benefit applications rose 6,000 to a seasonally adjusted 386,000. The increase came after the government revised the previous week up to 380,000. The four-week average, a less volatile measure, rose for the third straight week to 382,000. That's the highest in six weeks. Weekly applications are a measure of the pace of layoffs. When they drop below 375,000, it typically suggests hiring is strong enough to reduce the unemployment rate. "The trend in jobless claims suggests . . . that the underlying pace of employment growth has softened," said Bricklin Dwyer, an economist at BNP Paribas.
The Coca-Cola Co. plans to start selling its drinks in Myanmar for the first time in 60 years, following the U.S. government's decision to suspend investment sanctions on the country because of its democratic reforms. Myanmar is one of three countries where Coca-Cola doesn't do business. The other two are Cuba and North Korea. The world's biggest soft drink maker said Thursday it will start doing business in the country as soon as the U.S. government issues a license allowing American companies to make such investments. The U.S. announced last month that it was suspending restrictions on American investments in the Southeast Asian country, which is still easing toward democracy. Until last year, Myanmar had been led by an oppressive military junta.
Nokia to lay off 10,000
Nokia says it will slash 10,000 jobs and close plants as the ailing company fights fierce competition, and it gave a grim outlook for most of the year. The Finnish cellphone maker Thursday also announced personnel changes and said it has agreed to sell its luxury phone brand, Vertu. The measures are aimed at cost savings of $2 billion by the end of next year. Nokia Corp. updated its outlook, saying that heavy competition would continue to hit its smartphone sector in the second quarter, but to a "somewhat greater extent than previously expected." Its stock closed at $2.35, down 16 percent.-- AP