Beleaguered insurer American International Group Inc. could be split into at least three government-controlled divisions to try to save the business, according to a report Thursday in the Financial Times. Earlier, reports surfaced that New York-based AIG may be asking for its fourth loan from the U.S. government days before it is expected to report a fourth-quarter loss. AIG has already received $150 billion in loans from the government. In return the government has taken an 80 percent stake in the insurer. Under the proposed new plan, the government would swap its 80 percent stake for even bigger pieces of three units that would be split off from the company, according to the FT report citing anonymous people. Those units would be AIG's Asian operations, its international life insurance business and its U.S. personal lines business.U.S. durable-goods orders skid 5.2 percent
Manufacturers saw orders for big-ticket goods plunge a bigger-than-expected 5.2 percent in January as global economic troubles cut into demand from customers in the United States and abroad. The latest report on U.S. factory activity, released Thursday by the Commerce Department, showed orders falling for a record sixth straight month. January orders for autos, metal products, machinery, computers and electrical equipment, and household appliances all posted declines. Not only was last month's drop steeper than the 2.5 percent decline analysts expected, but activity in December turned out to have been much weaker. Updated figures showed a 4.6 percent drop in orders, vs. a 3 percent decline previously estimated.J.P. Morgan's WaMu deal to cost 12,000 jobs
J.P. Morgan Chase & Co. said Thursday it expects to realize about $2 billion in savings related to its acquisition of Washington Mutual Inc., the failed Seattle thrift the bank acquired at the end of September. This includes about $1.35 billion related to job cuts, the bank said. J.P. Morgan said about 12,000 jobs will be eliminated related to the acquisition. In December, the bank said it would cut a total of 9,200 jobs related to the WaMu deal. The 12,000 figure includes 2,800 jobs expected to be lost through attrition. At the end of December, the bank had a total of 224,000 employees worldwide.New-home sales hit a record-low annual pace
The Commerce Department reported Thursday that new-home sales in January fell 10.2 percent to a seasonally adjusted annual rate of 309,000, the worst showing on records going back to 1963. It also was weaker than the pace of 330,000 that economists expected, and shattered the previous all-time monthly low set in September 1981.Japan falling into its worst postwar recession
Japan's economy is sinking into its worst recession since World War II, international credit rating firm Standard & Poor's said Thursday. The Japanese economy is expected to shrink 4 percent in 2009, which would be worse than the 2 percent contraction in 1998, when Japan went through its own financial crisis after an economic bubble burst, S&P said. The projections underscores similar views expressed recently by other analysts as well as Japanese government officials.