Jobs To Return to Apple

Great news! Jobs may be returning to aid the U.S. economy. Unfortunately, it's only one position, but a significant one at least. Yesterday, Apple directors told agitated shareholders that talismanic CEO Steve Jobs is planning to return to the company in June, the New York Times reports. Breaking a nine-month radio silence about Jobs' health, Arthur D. Levinson, co-lead director of Apple, said Jobs "is deeply involved in all strategic matters." Whether that will be enough to calm investors nervous over Apple's future is about as clear as Jobs' true condition.

There's no mystery about the state of the economy in general, and the Obama administration is proposing $634 billion in new tax increases on the affluent and government spending cuts, the New York Times reports. They "signal his ambition to overhaul the health-care system, one of the main planks of his presidential campaign," the Wall Street Journal adds. The new taxes would raise an estimated $318 billion over 10 years by "reducing the value of such longstanding deductions as mortgage interest and charitable contributions for people in the highest tax brackets," it adds.

Sticking with the sorry economy—the banking sector, to be exact—the Obama administration has announced a "stress test" aimed at assessing the health of the nation's 19 largest banks in order to determine the size and scope of future bailouts, CNN Money reports. According to the Treasury Department test, the banks have to demonstrate their viability based on worst-case predictions that the economy contracts by 3.3 percent this year and remains almost flat in 2010. Other assumptions are that housing prices fall another 22 percent this year and unemployment jumps to 10.3 percent in 2010. However, these projections, which the government describes as unlikely, "are not much more dire than what many private forecasters already expect," the NYT writes.

On the subject of unhealthy banks, the federal government is set to increase its stake in Citigroup to as much as 40 percent, the WSJ reports. The federal boost may help prop up the bank, but it will bring with it a "slew of new complications," not least in the form of a Mexican law that "bars any institution that is more than 10%-owned by a foreign government from running a bank in that country." Citigroup owns Grupo Financiero Banamex, the No. 2 bank in Mexico by assets. In the United Kingdom, RBS is undergoing a radical restructuring and will take another $20 billion in government funds after posting the biggest loss in British corporate history—more than $34 billion, the FT and Guardian report. The bank's public image has not been helped by revelations that its former CEO Sir Fred Goodwin is drawing a pension of more than $1 million a year even though he is only 50.

Chrysler's top brass was in Washington on Wednesday to meet with Obama administration officials. On the agenda was the pending Fiat alliance and how much progress it's making with fuel-efficient vehicles, the WSJ reports, citing sources in the know. There's no word on whether Chrysler is any closer to getting the $5 billion emergency loan it requested a week ago. It appears the Obama administration didn't want to talk money but, instead, green cars. Obama's advisers are "pushing the two companies to commit to building more-efficient vehicles, including plug-in electric models," the newspaper reports, citing its sources. The Detroit News reports that General Motors will get similar treatment today. GM will be called in to speak with newly appointed car czar Steven Rattner, the newspaper writes. The Asian automakers are facing an equally difficult period. Japan's Big Three—Toyota, Honda, and Nissan—all reported staggering cuts in production in January as global demand stalled, the Guardian reports.

AIG's finances are such a mess that it might make more sense to split the stricken, government-controlled insurer into three parts. That's the new radical AIG restructuring plan under discussion in Washington, the Financial Times writes. Citing a source, the newspaper writes that government officials are prescribing a "controlled break-up" that would mean the end of AIG's "90-year history as a stand-alone global insurance conglomerate." Edward Liddy, the man appointed last fall to run the company, may have little choice. AIG's attempts to sell off parts of the business in a fundraising move are not working, Bloomberg writes. Meanwhile, Saks, a company dogged by bankruptcy rumors ever since it started discounting its pricey goods by as much as 75 percent, is not going under, CEO Stephen I. Sadove defiantly told analysts yesterday. Instead, Saks is rolling out a new plan that entails "cutting costs and introducing exclusive but more affordable merchandise" to keep the operation afloat, the NYT writes.