♦ 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]

♦ 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]

"Unemployed and foreclosed male WaMu Teller Doll seeks position in your action figure collection. Includes cell phone, CAN! outfit, teller tote bag, trading card, and a handsome plastic dude with a permanent smile." Just three days left to grab a bit of banking history! Assuming, that is, our hunch is correct and JPMorgan Chase CEO Jamie Dimon has no plans to remain in the action figure business. [EBay]

If you're a Washington Mutual customer and you're wondering what's going to happen now that your bank is defunct, your new bank (JP Morgan Chase!) would like you to know that it's already decided to wipe the WaMu brand off the face of the planet. WaMu branches will be rebranded, debit cards will be replaced, and your bank statement will have a new logo at the top very shortly. And, no, you won't be seeing any silly WaMu commericals on TV any longer. [AdAge]

♦ All eyes are on Washington, of course, as lawmakers reconvene to try and hammer out a bailout. [Politico, NYT]
♦ J.P. Morgan Chase has agreed to pay $1.9 billion to the government for WaMu's banking operations and will take over the company's portfolio of loans. WaMu depositors will still have access to their cash; holders of WaMu equity and debt won't be as lucky. [WSJ, DB]

As expected, Washington Mutual collapsed yesterday, making it the largest bank failure in U.S. history. JP Morgan Chase scooped up the company's assets, so if you were a WaMu customer, you'll be banking with Chase in the future. (Whoo hoo!) If you're a WaMu shareholder, however, you're totally out of luck. [CNNMoney, NYT]

♦ The Federal Reserve and Treasury are working with Congress on a sweeping bailout program that would represent the biggest intervention in financial markets since the '30s. Asian and European markets soared on the news. [WSJ, Bloomberg, NYT]
♦ Five banks are now looking at Washington Mutual, including Wells Fargo, JPMorgan Chase and HSBC. [WSJ, Dealbook]
♦ Morgan Stanley's John Mack fought for his life yesterday, lobbying for regulatory changes, twisting arms, and discussing deals with potential partners. China's sovereign wealth fund, China Investment Corp, is now believed in be in discussions to take a 49 percent of Morgan. [WSJ, Marketwatch]

• U.S. inflation soared to a 17-year-high annual rate in July. [WSJ]

• Morgan Stanley has offered to buy back about $4.5 billion in auction-rate securities from clients, following a similar offer by Merrill Lynch last week. The move came after Attorney General Andrew Cuomo's office sent out another round of letters to banks, including Morgan Stanley, JPMorgan Chase, and Wachovia. [Bloomberg, WSJ]

• JPMorgan announced that profits fell 52% due to write-downs, slightly less than the Street expected. [Bloomberg]

Got an illegal firearm sitting around the house? Good news: If you bring it to one of six churches this weekend, you'll earn yourself a $200 Chase gift card. No questions asked! Do note, though, that you can't simply waltz in with the gun in plain sight. To qualify, you'll need to wrap it up in a plastic or paper bag. Feel free to turn up with a rifle, handgun or a shotgun—they all qualify although BB guns will only earn you $20—and there's no need to remove the ammo: You can bring them loaded. And this unusual marketing arrangement is clearly a win-win for Jamie Dimon's notoriously aggressive JP Morgan Chase: Not only do illegal gun owners represent a valuable demo (all those ill-gotten stacks of $100 and no place to put them!), we also suspect fewer guns on the street also translates into fewer tellers with guns pointed in their direction.

• The Weather Channel was sold by Landmark Communications to NBC Universal, Bain Capital, and Blackstone for just under $3.5 billion. [NYT]

• Anheuser-Busch will reject InBev's $46.4 billion takeover bid. [Reuters]