The news at a glance

Bailouts: Two big banks repay Treasury

Citigroup and Wells Fargo, two of the biggest beneficiaries of the federal bank bailout, this week announced plans to repay their loans, said the Associated Press. The repayments will free the banks “from the close scrutiny and pay restrictions” that came with the loans from the Treasury Department. Wells Fargo CEO John Stumpf said the bank will repay $25 billion, while Citi, led by Vikram Pandit, will repay $20 billion. The remaining $25 billion of Citi’s $45 billion loan was converted earlier this year to common stock. The government will sell those shares in 2010.

But why is the government accepting the repayments? asked Michael Hiltzik in the Los Angeles Times. When Treasury came to the rescue during the 2008 financial “apocalypse,” its assistance came with an “implicit bargain.” In exchange for a lifeline, the banks would rein in pay, tone down their speculative trading, and help strapped homeowners. “Almost none of that has happened.” And now, in a grave tactical error, the government is “giving up what could have been an effective tool of leverage over this misbehaving industry.”

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Computers: Apple’s unhappy holidays

Buyers of Apple Computer’s new iMac desktop computer are reporting a raft of production problems, and the company has announced that fresh shipments of the popular model won’t arrive until after Christmas, said Philip Elmer-DeWitt in Fortune.com. Some customers report that the iMac’s 27-inch screen often flickers or shuts down, while others complain that their machines “arrived with a cracked screen.” Apple hasn’t said how it would fix the problems, or why it failed to anticipate a rush of holiday orders.

Energy: Exxon buys natural-gas giant

Exxon has moved aggressively to lock up a big chunk of U.S. natural-gas reserves, paying $31 billion in stock for XTO Energy, said Mark Williams in the Associated Press. The oil giant will also assume

$10 billion in XTO debt. Exxon has recently been sizing up natural-gas producers around the world, calculating that U.S. climate-change legislation could create new incentives to use cleaner-burning natural gas. “The deal could signal a new rush to own natural-gas assets” among major energy companies.

Smart phones: Google prepares to battle Apple

Google will begin selling its own brand of smart phone directly to consumers next year, “escalating the Internet giant’s assault on the traditional business model of the wireless industry,” said Jessica Vascellaro and Niraj Sheth in The Wall Street Journal. Unlike most other handset makers, Google plans to market the phone without partnering with a wireless provider. The phone business represents a promising way for Google to expand its Internet services and opens a new front in its growing rivalry with Apple.

Credit markets: A lifeline for Dubai

Abu Dhabi has given Dubai $10 billion to help meet its crushing debt load, said Landon Thomas and Bettina Wassener in The New York Times. The move was aimed at “easing fears about an outright debt default” by Dubai. The emirate, which borrowed $100 billion to finance a wild building spree during the past decade, can now make a $4.1 billion payment due on bonds issued by Dubai World, a government-owned property developer. Abu Dhabi had originally refused to backstop its fellow member of the United Arab Emirates, but relented under investor pressure.