• Following a similar move by Morgan Stanley last week, Citigroup and Bank of America are raising base salaries for bankers. It's designed to make up for the new limits on annual bonuses (and won't make up for the difference, by any means), so don't expect shouts of joy at either bank today. [WSJ]
• Bank of America has scraped together another $5.9 billion, which means it's now 76 percent of the way toward filling its $33.9 billion capital hole. [WSJ]
• New York State Controller Thomas DiNapoli is cutting ties with 10 hedge fund managers as part of the state's pension corruption investigation. [DB]

• Stocks are down sharply today over concern about the deepening recession. The stimulus package last week? So much for it restoring confidence. [BN, WSJ]
• Need more proof of mismanagement at Citigroup? Chuck Prince was ousted as CEO 15 months ago but he still has an office and secretary at the company. So does John Reed, Citi's former CEO who left nearly nine years ago. [BN]
• The stimulus package that cleared Congress Friday includes hefty new restrictions on bonuses and perks at Wall Street firms. [WSJ]
• GM will file the largest restructuring plan of its 100-year history today. [DB]
• Hedge funds may lose as much as 35% of their assets this quarter. [Reuters]
• Citi is having a hard time finding anyone to buy their junky assets. [NYP]
• Banco Santander, Europe's second largest bank, is offering a generous compensation deal for clients who lost money to Bernie Madoff. [WSJ]

Cranky Times columnist Clyde Haberman has a long list of (really good) questions for the banking industry, like why banks can't seem to figure out how to provide pens that actually work. ("How can people feel confident that their money is being managed wisely if those in charge can't even provide a functioning pen?) But he also has an interesting conspiracy theory to share with the world. It seems Banco Santander, which announced the purchase of Sovereign a few weeks ago, is now advertising itself in the Times as just "Santander." "Want to bet that Santander left out "banco," except in very small type at the bottom of the ad, so that few would see right away that another piece of America had been acquired by a foreign institution?" Click through for Haberman's litany of complaints.

♦ 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]

♦ Morgan Stanley closed its deal with Mitsubishi UFJ Financial Group. The $9 billion investment on the part of MUFJ gives it a 21 percent stake in the beleaguered bank. [WSJ, DB]
♦ U.S. stock futures rallied on Monday morning as government efforts to beef up the banking system reassured panicky investors. [WSJ]
♦ Treasury official Neel Kashkari outlined the government's efforts to bail out the financial system and resuscitate the economy this morning, although details were few and far between. [CNNMoney]
♦ New York Times columnist and Princeton economist Paul Krugman won the Nobel economics prize this morning. He'll collect a $1.4 million check for the honor. [Economix]

• The Federal Reserve and U.S. Treasury will inject billions of dollars into Fannie Mae and Freddie Mac to shore up the mortgage financing giants. [WSJ]