Aug. 27, 2010 (United Press International) -- JACKSON HOLE, Wyo., Aug. 27 (UPI) -- U.S. Federal Reserve Chairman Ben Bernanke said Friday the central bank would consider several options for priming the stalled economic recovery. Bernanke said the Federal Open Market Committee was open to an expansion of its quantitative purchasing programs, which is currently set as a reinvestment of funds earned by the Fed's nearly $2 trillion portfolio. The current strategy keeps the Fed's holdings from shrinking, Bernanke noted at the annual central bank retreat in Jackson Hole, Wyo. At this point, however, Bernanke said, "We do not rule out changing the reinvestment strategy if circumstances warrant." Bernanke outlined further steps for economic stimulation the Fed could take, including lowering the interest rates paid on reserve accounts at the bank, which would prompt banks to put their reserves to better use. "On the margin, a reduction in the … rate would provide banks with an incentive to increase their lending to non-financial borrowers or to participate in short-term money markets, reducing short-term interest rates further," he said. Bernanke also said policy makers could chose to alter their public statements, specifically changing the coded message of leaving bank-to-bank lending rates low "for an extended period" to a new phrase that would signal to lenders that rates would remain low "for a longer period than is currently priced in markets." By signaling rates would stay low for a longer duration, the central bank would, in effect, give banks confidence that they could keep the flow of credit going. As a more radical step, the bank could also raise its inflation rate target, a move suggested by other economists, Bernanke said. However, "I see no support for this option on the FOMC," he said. WASHINGTON, Aug. 27 (UPI) -- The U.S. Justice Department said Friday it has approved the proposed merger of United Airlines Inc. and Continental Airlines Inc. (NYSE:CAL) In a statement posted on its Web site, the department said approval of the $3 billion merger came after United and Continental agreed to transfer takeoff and landing rights "and other assets at Newark (N.J.) Liberty Airport to Southwest Airlines Co. (NYSE:LUV) " The decision clears the way for the merger to be completed within a few weeks, The New York Times reported. United and Continental shareholders are to vote on the merger Sept. 17. Once the merger is completed, the airlines will continue to operate separately for one year but they will be owned jointly by United Continental Holding Inc., the Times said. The combined company will be based in Chicago and will supplant Delta Air Lines (NYSE:DAL) as the largest U.S. air carrier. United and Continental currently account for 21 percent of the domestic airline capacity as measured by available seat miles -- one seat flown 1 mile. United and Continental said July 20 they had reached a critical agreement on combining their pilots as part of the merger. They will have to negotiate a new contract with their combined pilot staff once the merger is completed. PYONGYANG, North Korea, Aug. 27 (UPI) -- An American held in North Korea since January made it back to the United States Friday afternoon with the help former U.S. President Jimmy Carter. WHDH-TV, Boston, reported Aijalon Mahli Gomes was escorted by the former president and their plane arrived safely at Logan International (OOTC:LIIZF) (TSX:LII) Airport. Gomes's family gathered around the aircraft to welcome him, the TV station said. "The family of Aijalon Gomes feels blessed today to be able to welcome Aijalon back in the arms of those who love him," the family said in a statement. "It's been a long dark and difficult period for Aijalon and the entire family ... ." The family expressed its gratitude for Carter's efforts and thanked the government of North Korea and the Swedish ambassador. Carter traveled to Pyongyang Wednesday as a private citizen and negotiated a special pardon for Gomes, 31, who had been sentenced in May to eight years of labor and fined about $700,000 for illegally entering the country, the South Korean news agency Yonhap said. The North's Central News Agency reported Carter apologized to Kim Yong Nam, president of the Presidium of the Supreme People's Assembly, for Gomes's actions and requested his release. The North Korean news agency said leader Kim Jong Il issued an order granting amnesty to Gomes, saying, "The measure taken by (North Korea) to set free the illegal entrant is a manifestation of its humanitarianism and peace-loving policy." The U.S. State Department said in a statement it welcomed news of Gomes's release and expressed appreciation to Carter for his efforts. The statement stressed that the U.S. government did not propose or arrange the trip, and that Carter traveled at the invitation of the North Korean government. Gomes, a graduate of Bowdoin College who grew up in Mattapan, was in South Korea the past few years teaching English. It wasn't clear why he traveled into North Korea, though it may have been in support of a friend who was a human rights activist, WHDH-TV said. MEXICO CITY, Aug. 27 (UPI) -- A government prosecutor investigating the massacre of 72 people in northern Mexico is missing, authorities said Friday. The prosecutor, Roberto Suarez, has been missing since Wednesday, the day after Mexican marines found the bodies of the massacre victims on a ranch near San Fernando in the violence-plagued state of Tamaulipas. A San Fernando police officer was reported missing as well. Mexican President Felipe Calderon said Friday during a speech on drug violence the body of one of the two had been found -- but after someone handed him a note he clarified his remark, saying the investigator was missing and there was no information on whether he was dead, CNN reported. There had been reports in Mexican media Friday morning that two bodies -- including that of the prosecutor -- had been found, CNN said. As of Friday, authorities said they have identified 31 of the 72 massacre victims. They said 14 of those who have been identified came from Honduras, 12 from El Salvador, four from Guatemala and one from Brazil. Also Friday, two car explosions were reported in Tamaulipas -- one at a TV station in Ciudad Victoria, the capital, and the other outside a police station in San Fernando, the Los Angeles Times reported. It was not immediately clear whether the cars had been rigged with bombs, the newspaper said. TRENTON, N.J., Aug. 27 (UPI) -- New Jersey Gov. Chris Christie Friday fired Education Commissioner Bret Schundler, expressing "regret" for the state's failure to win a federal education grant. The state lost out on a $400 million grant this week because its application contained incorrect financial information. What has been described as a clerical error resulted in the state falling short by three points and losing out to Ohio in the competition for federal funding under an Obama administration program called Race to the Top. In defending his administration this week, Christie maintained Schundler had included correct information to federal officials reviewing the state's application. However, federal officials released video Thursday contradicting that assertion. Schundler told The New York Times Christie's chief of staff, Richard H. Bagger, requested his resignation Thursday evening. Christie issued a statement Friday saying he was "extremely disappointed to learn" the videotape "was not consistent with the information provided to me by the New Jersey Department of Education and which I then conveyed to the people of New Jersey." "I regret this mistake was made and will do all I can to have my administration avoid them in the future," the statement said. New Jersey's application contained budget figures for 2010 and 2011, rather than a comparison of figures for 2008 and 2009.
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