Consumers are still cutting credit use
WASHINGTON -- Consumer borrowing fell in June for a fifth straight month as households keep cutting back on credit card use. Borrowing dropped at an annual rate of $1.3 billion in June, the Federal Reserve reported Friday. That marked the 16th drop in overall credit in the past 17 months.
Americans backed away from swiping their credit cards for the 21st straight month. That offset a rise in the number of auto loans.
Households are borrowing less and saving more, and that has been a drag on the overall economy by lowering consumer spending.
The $1.3 billion June drop in borrowing was much smaller than the $5 billion decline that economists had expected. The government also revised the May decline to show a smaller drop of $5.3 billion rather than the initial $9.2 billion decrease.
Pay freeze lifted for Ford chairman
DETROIT -- After a five-year wage freeze, Ford Motor Co. Executive Chairman Bill Ford is getting paid again. The automaker said Friday that Bill Ford will be paid $4 million in salary and $11 million to $12 million in stock options -- the money he would have earned from 2008 to the present.
Bill Ford, the great-grandson of company founder Henry Ford, said in 2005 that he would stop taking a salary or bonus until the company returned to profitability.
Ford's compensation committee had ruled that Bill Ford could be paid from 2008 on when the company's automotive operations returned to profitability. The committee recently decided that condition has been met. Ford reported a $2.6 billion profit in the second quarter, its fifth straight quarterly profit.
Derivative losses a drag on Berkshire
OMAHA, Neb. -- Warren Buffett's company reported a 40 percent drop in second-quarter profit because largely unrealized derivative losses of $1.4 billion outweighed improvements at Berkshire Hathaway Inc.'s operating companies.
Berkshire reported $1.97 billion net income Friday, or $1,195 per Class A share. That's down from $3.3 billion, or $2,123 per share, a year ago. Its revenue grew 7 percent to $31.7 billion.
Those results fell short of the $1,360.44 profit per share analysts expected.
But there were several bright spots. Berkshire's insurance unit contributed $462 million in underwriting profit, up from $66 million last year. Burlington Northern Santa Fe railroad added $603 million in its first full quarter as part of Berkshire.
AIG repayments to feds trigger loss
NEW YORK -- The insurance giant AIG on Friday reported a $538 million loss in the second quarter due to charges related to selling assets to repay the federal government bailout it received during the financial meltdown.
AIG's adjusted results excluding the charges beat Wall Street expectations as its insurance business improved. Its CEO also said discussions are under way regarding a government exit from its huge stake in the company. Its shares rose in midday trading.
American International Group Inc. said its net loss attributable to common shareholders amounted to $3.96 per share. It had a profit of $311 million, or $2.30 per share, a year ago.