IN BRIEF
NEW YORK
Failed loans are behind loss of $7.77 billion for Citigroup
Citigroup Inc. became the latest bank to take a cautious view of consumers' credit problems, reporting a $7.77 billion fourth-quarter loss due to failed loans and the costs of repaying $20 billion in government bailout money.
Even with the loss, Citigroup, the hardest hit of the big U.S. banks during the credit crisis and recession, plans to give big bonuses this month to its top employees.
The earnings report Tuesday, which met analysts' expectations, reflected Citigroup's struggles and changing status in the banking industry. The company was forced to set aside $8.18 billion to cover the loans consumers can't repay, joining other big lenders who are still losing money on loans. But Citigroup, having been forced to shed its big investment banking and brokerage businesses during the banking crisis, lacked those buffers against losses that other major financial companies still have.
The company's focus, therefore is on loans, which are deeply troubled but showing some very early signs of improvement. For example, the addition to Citigroup's loan reserves was down 10 percent from the third quarter, and 36 percent from a year earlier.
TOKYO
Japan Airlines, burdened by debt, files for bankruptcy
Japan Airlines filed for one of the country's largest bankruptcies ever Tuesday, entering a restructuring that will shrink Asia's top carrier and its presence around the world.
Staggering under a $25.6 billion debt mountain, the carrier applied for protection from creditors under the Corporate Rehabilitation Law -- Japan's version of Chapter 11 -- with the Tokyo District Court.
Japan's flagship airline will slash nearly 16,000 jobs, reduce pensions for retired staff, cut routes and shift to more fuel-efficient aircraft as part of its restructuring.
SAN FRANCISCO
Google postpones debut of mobile phones to link to China
Google has delayed the debut of two mobile phones designed to connect with its Internet services in China, widening the void that might be opened if the company and Beijing can't resolve their rift over online censorship and security.
The phones, made by Motorola and Samsung, use the Android operating system, created by Google to steer people to its search engine and other services. China Unicom Ltd. was supposed to be the carrier.
The postponement Tuesday is the latest aftershock from Google's threat to shut down its services in China, which could cut off the world's most populous country from Google's services through any kind of computer or phone.
Google says it will remain in China only if the government relents on rules requiring the censorship of content the ruling party considers subversive. The ultimatum came last week after Google said it uncovered a computer attack that tried to plunder its software coding and the e-mail accounts of human rights activists protesting Chinese policies.
Putting the sale of the Android-powered phones on hold is a logical extension of Google's threat. It doesn't make sense to sell the device in a market where key services might be restricted or unavailable, said Forrester Research analyst Charles Golvin.
WASHINGTON
Bernanke asks Congress to review Fed's role in AIG bailout
Federal Reserve Chairman Ben Bernanke took the unusual step Tuesday of asking Congress' investigative arm to conduct a "full review" of the Fed's role in bailing out insurance giant American International Group.
The Fed chief's move is aimed at defusing criticism of the government's $182 billion rescue. The bailout sparked public outrage and demands in Congress for more information, especially after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company's need for a bailout.
The House Committee on Oversight and Government Reform has a probe under way that seeks to provide a fuller picture of the AIG bailout. Those lawmakers are especially interested in details involving billions in payments AIG made to Goldman Sachs and other Wall Street firms that did business with the insurer. Some lawmakers want to know why those firms were fully paid and why concessions weren't demanded.
NEW YORK
By shrinking refining business, Chevron will reduce work force
Chevron Corp. said Tuesday it plans to shrink its refining business in a move that will cut jobs throughout the company.
Chevron hasn't yet decided how many of its employees will be affected and whether the cuts will be concentrated in the U.S. A spokesman said the company is reviewing its entire downstream operation and will announce more details about how it plans to reorganize in March.
Chevron's refining business will be "a less complex and smaller organization that will require fewer positions," spokesman Lloyd Avram said.
Avram said the company hasn't decided when to announce job cuts. However, changes to the company's refining business are expected to be in place by the third quarter, he said.
WASHINGTON
FHA raising fees, tightening standards to shore up finances
The Federal Housing Administration is raising fees and tightening lending standards to shore up its strapped finances and avoid a taxpayer bailout.
The new policies, to be announced today, are designed to bring more revenue into the agency, while at the same time keeping loans available.
Under the changes, homebuyers will:
• Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500.
• Need a credit score of at least 580 to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.
