AIG's third rescue passes test

Major credit-rating companies have signed off on the latest revamp af American International Group inc.'s $ 150 billion resue package, people familiar with the matter say, removing the most immediate threat to the plan's implementation.

Both Standard & Poor's and Moody's Investors Services have quietly endorsed the terms of the revised bailout, which was negotiated over a period of months between AIG and US government offials, the people said.


Without the support of the credit tating firms, AIG would have faced crippling cuts to its ratings. The downgrades would likely have forced it to post billions n collateral on an array of financial contracts.

AIG sought the latest revision of the terms on the government aid after its plan to repay as much as $ 100 billion in assistance through asset sales failed. The company has blamed the financial critis-it fourth quarter loss in expected to exceed $60 billion-has also weakened its negotiation position with sutors.

American economy's fall is the deepest since 1982

The uS economy deteriorated far more than priviously thought in the fourth quarter, according to new revisions of government data, casting fresh doubt about the cances of a recover this year.


With falloffs in consumer spending and exports, gross domestic product declined ad a 6.2 % annual rat in the forth quarter of 2008 , according to a Commerce Department report . The agency's first estimate for GDP, reported in January, was for a 3.8 % decline

Besids the revised GDP, economic indicators for the first two months of the year point to a deepening recession-and the prospect of a dismal first quarter, too Every week in February , more than 600,000 people filed new claims for unemployment insurance, and the unemployment rate rose to 7.6 % in January, from 7.2 % in December.

India GDP grows 5.3% in quarter, slowest in years

India's economy grew at the slowest rate in almost six years, 5.3% in quarter ended dec. 31, signaling the global sownturn's impact even in a nation less dependent on exports than others in Asia.

The figures cast some doubt on predictions that India would escape relatively unscathed compared with market such as China and Singapore. Gross domestic product grew 8.9% in the same period the year before and 7.6% year-on-year in the previous quarter, the Central Statistical Organization said.

Recessions in key expot markets such as the US and Europe have prompted Indian exporters to cut production and lay off workers. Manufacturing output dropped 0.2% compared with rise of 8.6% in the year-earlier period. Capital in flows which played a big role in fueling local demand in recent years, have all but dried up as risk-averse investors shun emerging markets.

CHINA'S STIMULUS CHALLENGE

BEIJING-The annual meeting of China's parliament, which begins thursday, will reveal how far Beijing will go the support families hit by the economic downturn and to boost the nation's consumer spending.

The policier rolled out at the National People's congress session will be watched by the US and other countries that want China to help the global economy by awakening the spending power of its vast population. To do that, economists say, Beijing needs to invest more in health care education and social welfare, so people have the confidence to spend-instead of adding to savings.

China, the world's third_largest economy after the US and Japan, has seen its growth slow sharply in the past year, but its trade surplus remains high. China's trading parner hop the country will import more.

Despite the limited power of the legislature, its annual session is China's political event of the year, where major policies are discussed and announced. Expectations are high that Premier Wen Jia Bao and othe officials will make substantial new commitment to social programs.