• New jobless claims are down, but a record number of people are collecting unemployment, which won't be good news for the markets today. [BN, WSJ]
• Bank of America is hoping to pay back the $45 billion in bailout money by the end of the year. And it looks like they might actually be able to do it. [DB, WSJ]
• Speaking of taxpayer money, GMAC is getting $7 billion of it. [WSJ]
• Hedge funds are back: They raked in $15.4 billion in April. [BN]
• The Justice Dep't is looking into shady behavior at Lehman circa '07. [WSJ]
• Britain's Serious Fraud Office is building a "warning system to help it spot hedge fund fraud." But only serious hedge fund fraud, obviously. [Reuters]

• The Carlyle Group will pay $20 million to end an investigation by Andrew Cuomo into its dealings with pensions and placement agents. [NYT, WSJ]
• Two attorneys at the SEC are under investigation for insider trading. [CBS]
• Hedge fund manager Jim Simons is facing tough questions from angry investors who put money into one of Simons' under-performing funds. [WSJ]
• Barclays is in talks to sell its Barclays Global Investors. Blackrock and Bank of New York Mellon are two of the bidders. [BN, Reuters]
• Six major insurance companies are getting a bailout. [BN, NYT]

• The market has been up big the last few weeks. But the ride may be over. "The market has gone too far, too fast," as one fund manager puts it. [BN]
• Following the stress tests last week, a number of banks have been busy de-stressing: Both Morgan Stanley and Wells Fargo raised billions late last week to satisfy new capital requirements mandated by the Fed. [NYT]
• Meanwhile, Bank of America, which needs to raise $34 billion (down from the $50 billion it could have been forced to raise) is looking to offload its stake in China Construction Bank, although finding takers isn't easy. [WSJ]
• Warning: Turning around AIG may take a bit longer than expected. [WSJ]

• Employers only cut 539,000 in April, which was slightly better than Wall Street expectations and an improvement over the month of March. But the unemployment rate rose to 8.9 percent, which is a 25-year high. [WSJ, NYT]
• Stephen Friedman has resigned as chairman of the board of the Federal Reserve Bank of New York after questions about possible conflicts of interest given his role as a director (and shareholder) of Goldman Sachs. [WSJ]
• It looks like GMAC is going to need another bailout. [NYT, NYP]

♦ Congressional Democrats and the Bush administration are in the final stages of negotiating an auto bailout package. A vote in the House is expected as soon as Wednesday afternoon. [NYT]
♦ Bad news for GMAC: The auto and consumer lender failed to secure additional financial and will not be able to transition to a bank holding company. [CNNMoney]
♦ Yahoo! is expected to hand out 1,500 pink slips today. [CNN]

♦ The effort by U.S. automakers to secure a bailout hit a major roadblock after execs from the Big Three were sent home by Congress empty-handed. The behind-the-scenes negotiations continue. [WSJ, Bloomberg]
♦ Shares of JPMorgan Chase, Citigroup and Bank of America are at multi-year lows as the Dow hovers at a six-year low of its own. [DB, DB]
♦ GMAC, controlled by Steve Feinberg's Cerberus Capital, says it's applied to become a bank holding company so it will be eligible for bailout cash. [DB]
♦ GE has turned to China and Singapore as it looks to raise cash. [Bloomberg]
♦ Harbinger's Phil Falcone is pulling back on his media investments. He's reduced his exposure to the New York Times and Media General, just months after fighting for board representation. [WSJ]
♦ Deutsche Bank plans to cut 900 more jobs. [NYP]
♦ Weekly jobless claims have reached a 16-year high. [MW]

♦ The Bank of England slashed its key interest rate to 3 percent. And it may go even lower. [Marketwatch]
♦ The short list for Treasury Secretary: Larry Summers, Tim Geithner, Paul Volcker, and Bob Rubin. [WSJ]
♦ Steve Schwarzman's Blackstone Group reported a $502.5 million loss for the third quarter. [DB]
♦ More chatter about falling bonuses: One study says the drop could be 20 and 35 percent on average with a 70 percent fall-off for some top execs. [NYT]

♦ October will go down as one of the gloomiest months in history. [CNN]
♦ Barclays plans to raise $11.8 billion by selling shares to Abu Dhabi and Qatar in order to meet Britain's new capital requirements. [NYT, WSJ]
♦ The banks benefiting from the bailout also owe $40 billion in compensation to employees, just in case you were wondering where your tax dollars were going. [WSJ]
♦ Meanwhile, banking CEOs may be in talks to cap compensation. Or they may just be paying the idea lip service in this sensitive political climate. [WSJ]

♦ The Fed is expected to cut interest rates again today, possibly to as low as 1 percent. [WSJ]
♦ The White House is pushing banks to stop hoarding the bailout billions and start making more loans. [AP]
♦ George Soros says the number of hedge funds "will be reduced in size by anywhere between half and two thirds" over the next few years. [Reuters]
♦ GMAC, which is controlled by GM and Steve Feinberg's Cerberus Capital, is now looking to become a bank holding company so it can tap into the $700 billion bailout pool. [WSJ]
♦ Credit card crunch: Lenders wrote off an estimated $21 billion in bad credit card loans in the first half of 2008. [NYT]