• BlackRock has reached a deal to buy Barclays Global Investors for $13.5 billion, making BlackRock the world's largest money management firm. [WSJ]
• Lawmakers grilled Bank of America chief Ken Lewis in Capitol Hill yesterday, although he defended his decision to go ahead with the acquisition of Merrill Lynch and placed blame on Ben Bernanke and Hank Paulson. [NYT, WSJ]
• John Paulson's hedge fund, which made $3+ billion betting the housing market would collapse, is now scooping up lots of distressed debt. [BN]
• Goldman was an investment bank before becoming a commercial bank. Now that it's free from the bailout, it may go back to being an I-bank. [Reuters]
• US households lost $1.33 trillion of wealth in the first 3 months of '09. [DB]
• Foreclosures fell during May, not that things have improved much. [CNN]

The Way We Live Now: Stably. The new economic thing is here, and that thing is stability. Car sales are stabilizing! Consumer confidence is stabilizing! One caveat: don't look for stability.

Federal regulators say that ten of the 19 largest financial institutions in the U.S. will have to raise a combined $75 billion in capital by November. Does this strike you bad news? It shouldn't! "The results released today should provide considerable comfort to investors and the public," explained Fed chairman Ben Bernanke in a statement. Be sure to keep that in mind when you explain to your kids why they can't go to private school next year, and when you find yourself sunning yourself in Coney Island this summer because you couldn't afford a proper vacation. [NYT/Dealbook, Bloomberg]

• About 10 of the 19 largest banks that have undergone "stress tests" will be notified by Washington that they need to raise more capital. [WSJ, BN]
• JPMorgan Chase chief Jamie Dimon isn't expecting to be one of the 10: He said he thinks "there are still too many banks in the United States," and will happily acquire some of the institutions that can't survive on their own. [WSJ]
• UBS announced a first-quarter loss of $1.8 billion as the bank took more writedowns on risky investments and client withdrawals continued. [Reuters]

• After a two-month wait, the nation's 19 largest banks will start to hear today how they did on those stress tests conducted by Washington regulators. [NYT]
• If the test indicates Citigroup will need more money to stay afloat, Vikram Pandit can probably kiss his job as the bank's CEO goodbye. [NYP]
• Andrew Cuomo is urging federal regulators to investigate allegations that Hank Paulson and Ben Bernanke applied pressure to Bank of America chief Ken Lewis to go ahead with the acquisition of Merrill Lynch. [WSJ, NYT, CNN]
• Chrysler is preparing to file for Chapter 11 as soon as next week. [WSJ]

• Bank of America CEO Ken Lewis testified under oath that Fed chairman Ben Bernanke and former Treasury Secretary Hank Paulson pressured him to keep quiet about BofA's plans to buy Merrill Lynch. [WSJ, CNN]
• Credit Suisse reported a profit of $1.7 billion for the first quarter. [BN]
• Executives from a bunch of credit card companies will face off against President Obama today over possible limits on fees and interest rates. [BN]

• Stocks dropped at the opening bell this morning following the Commerce Department's report that retail sales fell 1.1 percent last month. [WSJ]
• The SEC is looking into whether Bank of America broke the law by not telling shareholders about Merrill Lynch's plan to pay out billions in bonuses. [FT]
• President Obama is expected to tap Fannie Mae chief Herb Allison to head up the government's $700 billion financial rescue program. [WSJ]
• From Dick Fuld to Tim Geithner, Steve Rattner to former AIG chief Bob Willumstad, the big guns of finance have a friend in Michael Bloomberg. [NYT]
• Lehman Brothers "is sitting on enough uranium cake to make a nuclear bomb as it waits for prices of the commodity to rebound." No, this is not a joke. [BN]

Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke wore identical ties for their testimony before Congress today. Almost as embarassing as when everyone at Gawker HQ wears nearly identical grey V-neck sweaters.

• Is AIG officially the most despised company in America? Following the disclosure over the weekend that execs planned to go ahead with $165 million in bonuses to top execs comes word that a good deal of the billions in bailout money it received went to banks like Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), and Bank of America ($5.2 billion). [BN, NYT, WSJ]
• Larry Summers: "There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous." [BN]
• UBS plans to cut another 5,000 jobs. [Reuters]

The stock market was up big today! Hard to imagine, huh? The Dow closed up more than 375 points, its biggest gain since November, following encouraging comments by Fed chair Ben Bernanke, news that Citigroup had turned a profit during the first two months of '09, and hints that the government planned to reinstate rules governing short sales of stocks. Don't get too excited just yet: "Similar sharp rallies in September, October and November turned out to be fleeting, and the market has still not had two gaining sessions since Feb. 5 and Feb. 6." [Marketwatch, NYT]

• Merrill Lynch's top 10 earners in 2008—a list that Andrew Cuomo will be interested to take a look at—is out. Each made more than $10 million in cash and stock in 2008 as the bank racked up losses of $27.6 billion. [WSJ]
• The private sector lost nearly 700,000 jobs in February. [CNN]
• A UBS exec will address the Swiss bank scandal on Capitol Hill today. [NYT]
• Ben Bernanke yesterday: "If there is a single episode in this entire 18 months that has made me more angry, I can't think of one other than AIG." [BN]
• Bill Ackman's hedge fund dropped in February, Ken Griffin gained. [BN, NYP]
• More than 8.3 million mortgages are underwater, according to a report. [BN]
• Bernie Madoff has agreed to give up rights to his investment firm and company art collection. A hearing scheduled for today to look into conflicts of interest on the part of his lawyer, Ira Sorkin, has been postponed. [AP]

• Stocks appear positioned to rise this morning after tumbling to their worst levels in more than a decade during yesterday's trading session. [CNN, MW]
• More on what the government is trying to do with the billions it's been pumping into AIG. Meanwhile, the insurance giant's founder, Hank Greenberg, has filed suit against his former company and accused it of fraud. [NYT, NYP]
• Citigroup is still hoping to shed a handful of "non-core" assets, including its mortgage and insurance operations, Japanese brokerage, and private-label credit card business. [NYP]

• Citi chief Vikram Pandit is still working out the details of a rescue package that would turn over as much as 40% of the bank to the federal government. He'd really love to hang on to his job as part of the deal, though. [WSJ]
• In a last-ditch effort to raise cash, Citigroup is looking to sell off both its Japanese investment bank and brokerage. [Reuters]
• John Thain "sneaked in a side door" to answer Andrew Cuomo's questions for a second time on Tuesday, and provide more detail on the billions in bonuses Merrill Lynch handed out just before the firm was acquired by BofA. [NYDN]
• AIG is now facing two "distasteful" options: sell "prized assets to competitors or hand over a big part of its business to the federal government." [NYT]
• Connecticut is planning legislation to regulate the hedge fund industry. [DB]
• You can thank Ben Bernacke for the Dow's rally yesterday. [NYT]
• Existing-home sales tumbled to a nearly 12-year low in January, and prices took a double-digit drop. [WSJ]

• As part of the rescue plan currently under discussion in Washington, the government would end up with 40 percent of Citigroup, which isn't quite the same as nationalizing it, but is pretty darn close. [NYT]
• JPMorgan Chase cut its dividend to a nickel yesterday. [AP]
• John Thain spent six hours answering Andrew Cuomo's questions last week. But he'll make a return visit this week now that a judge has ruled Thain has to provide more detail on Merrill's controversial bonus payouts. [Reuters]
• AIG needs more government money. Feel free to laugh or cry about this. [DB]
• UBS may end up going to court as it tries to fight an order to disclose the names of its American clients suspected of offshore tax evasion. [NYT]
• Allen Stanford had ties to Joe Biden's brother and son, apparently. [WSJ]
• A bankrupt Lehman Brothers is spinning off its venture capital arm. [WSJ]
• Home prices in 20 U.S. cities declined an average of 18.5% in December. [BN]
• Federal chairman Ben Bernanke says the recession should end this year and 2010 "will be a year of recovery," if the banking system's stabilized. Reassuring words, provided you still believe anything Bernanke has to say. [WSJ]

• Have you heard? Our banks are insolvent. Happy Friday to you, too. [NYT]
• The markets are down this morning as the House and Senate prepare to vote on the $789 billion economic stimulus package. [CNN]
• It's still unclear whether Wall Street got the message that "that high living on the corporate tab is now unacceptable." That's comforting to hear. [Reuters]
• Leon Black's Apollo has tapped Henry Silverman as COO. [WSJ]
• AIG's financial products unit is now under investigation in Britain. [DB]
• Morgan Stanley has suspended its global head of real estate investing. [FT]
• Prosecutors have started interviewing employees of Bernie Madoff. [WSJ]
• Tim Geithner and Fed chairman Ben Bernanke are in Rome today and tomorrow to meet their G-7 counterparts to discuss the stimulus plan. [WSJ]
• Time's list of 25 people to blame for the economic crisis. [Time]

Men with unusually long ring fingers are more likely to be either a successful stock trader, or gay. So what does that tell us about the government's wise men patching up the economy?

• Citigroup and Morgan Stanley may announce a joint venture combining their brokerage divisions as early as today or tomorrow. The firms have already agreed to set aside $2 billion and $3 billion to retain top brokers. [WSJ, NYP]
• The joint venture isn't giving Citigroup or its CEO, Vikram Pandit, much of a boost. Shares dropped 17 percent yesterday as investors grew concerned the deal was prompted by Citi's desperation more than anything else. [NYT]
• Close to 2,000 former Merrill Lynch employees in London have been laid off by new parent Bank of America. [Times UK]
• AIG is expected to sell its Canadian life insurance operations to Bank of Montreal to repay government loans. [BN]
• Federal Reserve chair Ben Bernanke says a fiscal stimulus won't be enough to spur an economic recovery. [BN]

Ed Koch is turning 84 today. Happy birthday, Mr. Mayor! Jennifer Connelly is 38. Actor Tom Wilkinson is turning 60. Hollywood powerhouse Paula Wagner is turning 62. Fox Business anchor Liz Claman is 45. Rory Kennedy, the youngest daughter of Bobby Kennedy, is 40. Model Bridget Hall is turning 31. Dionne Warwick is 68. Mayim Bialik (yes, Blossom) is 33. And your favorite game show host ever, Bob Barker, is celebrating his 85th. Weekend birthdays below!

♦ 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]

It is a stunning reversal of fortune of the sort his old investment bank just narrowly averted thanks to Warren Buffet and the government to which he to which he does not have to pay any of those "tax dollars" he is throwing around to save his old neighborhood! But yes, sources are now informing us Billionairish bald man Hank Paulson is officially hot. Just yesterday we were still thinking the Treasury Secretary and Most Important Man in America Right Now looked creepy and mechanical compared to his furry little Fed Chief partner in congressional rage collection. Then suddenly today our very own commenters are telling us that no, actually, he is hot. As with all the really significant developments in this market collapse, Daily Intel started this trend when they posted a shirtless photo of Hank circa 1973. But look, he got the job done. Unless Republicans succeed in botching the plan he will save Wall Street. Very fast. So who is this guy?Judging from the recent Fortune profile we went back and read, he is exactly the type of dude we'd never see ourselves getting involved with, which maybe gives you some insight into how he has stayed married for 39 years. A non-ideological mild-mannered Republican pragmatist who likes to work out, he's depicted as a consummate optimist. Oh yeah and he doesn't drink. "Slow to grasp the seriousness of the credit crunch." And there's this scary quote that is so scary because he sounds like he thinks he is expressing some serious conviction: