What are the chances the big, fat Wall Steet bonus will go the way of the three-martini lunches (or mortgage-backed securities)? "Slim to none,'' says John Gutfreund, the former CEO of Salomon Brothers and the man responsible for ending Michael Bloomberg's career in investment banking in the early '80s. "They [bankers] are going to have to be a little bit sensitive because politicians, whether they like it or not, are part of their lives now." We'll go ahead and assume this will come as very welcome news to real estate brokers struggling to find buyers for $60 million apartments. [Bloomberg]

♦ Lawmakers and officials are moving close to ironing out a second stimulus bill after Fed chair Ben Bernanke endorsed the idea. [Bloomberg, NYT]
♦ The Treasury Department is pushing bigger banks to use the rescue package to acquire smaller, weaker rivals. [NYT]
♦ The Dow's 413-point rise yesterday was attributed to signs the credit market is beginning to thaw. [NYT]
♦ Some people are still making out nicely: Peter Kraus, the head of strategy at Merrill, will be leaving the firm after just a couple of months with as much as $25 million. [WSJ]

♦ John Thain says he expects "thousands" of job cuts will follow Merrill Lynch's merger with Bank of America. [Bloomberg]
♦ Another day, another bailout: The Netherlands will inject $13.4 billion into ING. [WSJ]
♦ GM is having difficulty acquiring Chrysler because it can't come up with the financing. [WSJ]

♦ Prosecutors have subpoenaed a dozen Lehman executives, including Dick Fuld, as part of three grand jury probes into the bankruptcy of the investment bank. [NYP]
♦ Warren Buffett has faith: "Buy American. I am." [NYT]
♦ Andrew Cuomo met with AIG's new CEO yesterday, who assured the attorney general the insurance giant would account for excessive executive compensation and will also cancel upcoming conferences. [NYT, Bloomberg]

♦ How did Hank Paulson's negotiations with the CEOs of the nation's largest banks go down on Monday? There were no negotiations, actually. He handed them a term sheet and told them to sign it on the spot if they knew what was good for them. [WSJ, NYT]
♦ Whether or not the federal government make actually make money taking a take in all these banks is still up in the air. [NYT]
♦ Will the bailout really change the way Wall Street CEOs are paid? Nah. They "will find other creative ways of paying their executives as they see fit." Which means Lloyd Blankfein will still take home tens of millions. [NYT, Bloomberg]
♦ The credit markets thawed ever so slightly yesterday following the news the U.S. government would take a stake in major banks. It could take weeks or months for things to really improve, though. [WSJ]

This is the official end of the Bush Administration. Yes, he'll hang around the Oval Office for another couple months, but it's over. It's done. Everyone get to work on your obits! What happened today that finally signaled the end of the era? Bush surrendered, completely, to the reality-based community. Ron Suskind, whose work chronicling the Bush administration has basically been the best political journalism of the last eight years, is responsible for that legendary phrase. In a 2004 piece for the New York Times Magazine, Suskind quoted an unnamed Bush aide (Rove?) as saying this:

♦ In a extraordinarily bold move, the U.S. will use $250 billion to take equity stakes in major financial institutions like Citigroup, Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase as part of an effort to restore confidence in the system, unlock the credit markets and "avoid financial collapse." [WSJ, NYT]
♦ The government's move isn't unprecedented, although not everyone is very happy with the "partial nationalization" approach. [NYT, WaPo]
♦ Global markets continued to rise overnight as investors responded to news of the government's plan. [Bloomberg]
♦ Notwithstanding the bailout, some hedge fund titans like Steve Cohen, John Paulson, and Israel Englander are staying on the sidelines and keeping their billions in cash. [WSJ]

Unpatriotic dissenters are expressing doubts about Neel Kashkari, America's new young bullet-headed money whiz who's been tapped to lead this great nation out of the pit of financial despair. How dare they! It was almost humorous how little anyone knew about the 35-year-old AC/DC fan when the Treasury Dept. assigned him to lead the massive bailout earlier this week. But now we know more about: his family! His politics! His hobbies! And his wall art:

♦ Invoking emergency powers, the Fed will create a special fund to buy up commercial paper—short-term debt that companies typically use for such things as payroll—in an effort to ease up the credit markets. [Bloomberg]
♦ Wachovia and its sparring suitors, Citigroup and Wells Fargo, have agreed to a two-day truce as negotiators try to work out a resolution. [WSJ, DB]
♦ Did you miss Lehman CEO Dick Fuld's testimony before the House yesterday? A recap. [WSJ, FT, NYT]
♦ Bank of America reports that profits plunged 68% in the third quarter. [CNNMoney]

♦ The legal battle between Citigroup and Wells Fargo raged over the weekend as both banks sought the upper hand in their bid for Wachovia. A Fed-led settlement which would divide Wachovia's assets may put an end to the dispute. [NYT, WSJ]
♦ Bank of America has agreed to settle government claims related to Countrywide Financial. The total price tag could exceed $8.6 billion. [WSJ]
♦ Dick Fuld will make his first appearance in weeks when he speaks before a House committee today. [NYP]
♦ Eli Lilly has agreed to acquire ImClone Systems for $6.5 billion. [Reuters]

The $700 billion bailout package has passed the House. President Bush says he'll sign it later today. [NYT, CNN]

♦ Citigroup isn't getting Wachovia after all: Just four days after the banks agreed to a deal, Wachovia has changed course and will now sell the company to Wells Fargo for $15.4 billion. [WSJ, NYT]
♦ The $700 billion bailout bill will reach the House for a vote today. This should be interesting. [NYT]
♦ JPMorgan Chase, which purchased a failed Washington Mutual last week, is already cleaning out the executive suite. [Bloomberg]

♦ Now comes the hard part. After winning the vote in the Senate last night, the bailout bill will head to the House for a Friday vote. [NYT, WSJ]
♦ John Thain will be staying put at Bank of America, contrary to initial rumors. He'll become the combined company's president of global banking, securities and wealth management. Who wants to hunt for a job in this economy? [MW]
♦ "Warren Buffett has become the new triple-A credit rating system." [NYT]
♦ Dick Fuld's last day in his corner office may come tomorrow. [WSJ]
♦ First-time applications for unemployment benefits rose to the highest level in seven years. [Bloomberg]

After sufficiently loading it up with some pork, the Senate passed the bailout bill this evening by a vote of 74-25 and it will now head to the House for a vote on Friday. This should come as happy news if you happen to have an interest in archery and rum production: The bill will now eliminate the 39-cent excise tax on wooden arrows designed for children as well as reduce the taxes imposed on companies that import rum from the Virgin Islands. Seriously. Really. Ah, yes, another day in Washington.

Why did the bailout fail to win approval in the House earlier this week? It wasn't marketing properly, naturally. "'Bailout' connotes failure, and Americans hate failure," one veteran publicist tells AdAge. "There is nothing redemptive about a bailout. What if this had been called a 'rescue' from the beginning? Or the 'Save Our Homes Act'?" Oh, also: the administration probably should have recruited a celebrity to pitch it instead of sending George Bush or a haggard Hank Paulson to the podium. Says one strategist: "The first rule of any PR campaign is to find the most credible voices you can to be your message deliverers." Anyone know what Oprah's up to this week?

The New York Times is quite concerned about this economy and this "bailout" that is probably going to pass the Senate today in the most complicated form so far presented to the American People. They note, today, that its fate as political poison was probably set when it was labeled a "bailout" from the beginning. But just maybe, institutionally, as the voice of the moderate liberal establishment, the Times needs this bailout to work! So they spend a great deal of time trying to explain it, and they also seek to explain the effect of the bailout and The Crisis on You, the Little Guy on Main Street. And every other street! Join us, won't you, as we tag along on the Times Bailout Tour '08. First: it's not a bailout!

♦ The Senate is expected to vote this evening on a revised version of the bailout bill. [NYT, WSJ, Bloomberg]
♦ Treasury Secretary Henry Paulson has spent the past day and a half working over lawmakers and lobbyists, trying to change minds. [Bloomberg]
♦ President Bush has signed into law a low-interest loan package for American automakers. [WSJ]
♦ UBS plans to cut 1,900 investment banking jobs. [Bloomberg]
♦ Wells Fargo chair Richard Kovacevich says "he feels like a kid in a candy store." At least someone is feeling good. [DB]

What role did race play in the crisis that led to the proposed bailout? What role did it play in the defeat of the bailout? The first topic has been argued and discussed for a while now—with vicious theories first proposed by far-out wackos bubbling up to "respectable" media people and even some congress members. But today brought a number of more reasoned responses to those who'd "blame the Blacks" explicitly or implicitly. The second question, though, hasn't been touched on. How did black congresspeople vote? And, uh, what about the Jews? You can see the result in that handy chart above, along with an explanation of What It Means. (It's not purely pointless provocation.) Oh no! The financial sector exploded! The market is, uh, failing! "What do we do" is the response of, like, economists. Politicians know the important question is "WHO DO WE BLAME." So liberals jumped on deregulating Conservatives and President Bush and evil Wall Street fatcats and so on. Conservatives, oddly, also blamed most of those people, except for a small but vocal subset who blamed this collapse of everything on... poor black people?

John McCain would really appreciate if you started calling the Wall Street "bailout" a "rescue" from now on. Looks like someone's been chatting with Frank Luntz! [Politico]

An ad for Fox Business that appeared in today's New York Times and Wall Street Journal. [FBNY, THR]