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Reuters Business Summary

Reuters - 56 minutes ago

U.S. plan for Fannie, Freddie to hit shareholders

WASHINGTON - The U.S. government plans to takeover Fannie Mae <FNM.N> and Freddie Mac <FRE.N> and all shareholders of the two mortgage giants will take a hit, an influential lawmaker said on Saturday. The move to take control of the two companies, which may be announced Sunday, could amount to the largest financial bailout in the nation's history, and is a bid to ward off further damage to the U.S. housing market which is in its deepest downturn since the Great Depression.

Boeing machinists walk off the job as talks fail

NEW YORK/EVERETT, Washington - Boeing Co's <BA.N> 27,000-strong machinists' union walked off the job on Saturday after the plane maker failed to improve its contract offer following two days of emergency talks. "Despite meeting late into the night and throughout the day, continued contract talks with the Boeing Company did not address our issues," Tom Wroblewski, the international union's Seattle-area president, said in a letter to members. "The strike is on."

Alitalia adviser to meet BA on rescue plan: report

CERNBOBBIO - Alitalia's <AZPIa.MI> adviser will soon present its rescue plan for the airline to British Airways <BAY.L>, considered by Italy as a possible foreign partner for the bankrupt airline, an executive told a newspaper. "Soon we will present the plan to British Airways as well," an executive at Intesa Sanpaolo, <ISP.MI> the Italian bank behind the plan, said in an interview published in business daily Il Sole 24 Ore on Saturday.

Greenberg could pay fine of up to $100 million: report

NEW YORK - Maurice "Hank" Greenberg, the former CEO of American International Group Inc <AIG.N>, could face a fine of up to $100 million to settle three-year-old civil fraud charges brought by New York's attorney general, according to business news channel CNBC on Friday. CNBC editor Charlie Gasparino said as part of settlement talks between the two sides, a fine of between $50 million and $100 million has been discussed. However, he said the talks could break down over the language of the settlement.

Treasury plan won't help Fannie, Freddie shareholders: Frank

WASHINGTON - Fannie Mae <FNM.N> and Freddie Mac <FRE.N> shareholders, including preferred stockholders, will not fair well under a proposed U.S. Treasury takeover of the two housing finance companies, House Financial Services Committee Chairman Barney Frank told Reuters on Saturday. "I think all shareholders will be disadvantaged," Frank said in a Reuters interview when asked if holders of preferred stock of the government sponsored enterprises could also be wiped out along with common stockholders under the Treasury plan.

GE gets "Wells notice" in SEC accounting probe

CHICAGO - General Electric Co <GE.N> said on Friday it had been notified by U.S. regulators that a civil complaint could be filed against the company following a more than three-year-long probe into its use of hedge accounting for derivatives and other accounting matters. In a filing with the U.S. Securities and Exchange Commission, the company said SEC staff had issued a so-called "Wells notice" on Thursday, advising GE the agency may "bring a civil injunctive action against GE for possible violations of the securities laws."

Citi could sell Primerica, Texas business: Ladenburg's Bove

NEW YORK - Citigroup <C.N> could sell its Primerica financial services unit and its First American banking subsidiary in Texas as the bank continues to restructure its business, Ladenburg Thalmann analyst Richard Bove said in a research note. In the note, Bove said Primerica does not fit into Citigroup Chief Executive Vikram Pandit's goals of making the bank an international company across business lines and estimates Primerica could fetch as much as $7.5 billion, or 15 times Primerica's annual earnings.

DSG sought bid from Media Markt, but rebuffed: report

LONDON - Germany's Media Markt, Europe's biggest electrical goods retailer, has rejected a request from DSG International Plc <DSGI.L> to consider a bid for its closest rival, the Financial Times said on its Web site. The FT.com, citing unnamed people familiar with both companies, said Britain's DSG, which trades as Currys and PC World in the UK, UniEuro in Italy and Elkjop in Nordic countries, first made the informal approach in the Spring.

Jobless rate at 5-year high

WASHINGTON - An unexpectedly steep 84,000 U.S. jobs were lost in August and the national unemployment rate hit a five-year high of 6.1 percent, fanning worry ahead of November's presidential vote about rising recession risks. The eighth straight month of job cuts underlined the weakening state of labor markets and prompted back-and-forth jibes by Democratic presidential contender Sen. Barack Obama and Republican nominee Sen. John McCain about how to help.

Alabama group files suit over Jefferson County debt

BIRMINGHAM, Alabama - An Alabama activist group has filed a lawsuit seeking to cancel $6.6 billion in debt and related swaps issued by Jefferson County, claiming the county faces financial disaster because of misdeeds by Wall Street firms, corrupt local politicians and others. The lawsuit, filed in Jefferson County Circuit Court under a state law that allows citizens to sue parties corrupting government, names as defendants several Wall Street banks and leading local politicians, including Birmingham Mayor Larry Langford.

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