• The government is pumping another $30 billion into AIG, the insurance giant deemed "too big to fail." The company also reported a fourth-quarter loss of $61 billion, the largest quarterly loss in history. [NYT, BN, WSJ]
• Stocks moved lower on Monday morning following the AIG news. [BN]
• HSBC is cutting 6,100 jobs and raising $18 billion in capital. [Reuters, DB]
• Hedge funds are bracing for another wave of withdrawals. [WSJ]
• The third bailout of Citigroup last week? It may not be the last. [NYT]
• Investment banks pulled in $53 billion in fees in 2008, 39 percent less than the record $87 billion of a year earlier. JPMorgan took the biggest share. [BN]
• Consumer spending rose in January for the first time in seven months as shoppers took advantage of post-holiday discounts. [BN]

• Citigroup is close to a pact to boost the government's stake in the failing bank to as much as 40%; Vikram Pandit's job, however, should be safe. [WSJ, NYP]
• More on what the Obama administration is hoping to find out when it begins conducting the "stress tests" to see how banks hold up during a crisis. [WSJ]
• RBS has reported the biggest loss ($34.3 billion) in British history. [Reuters]
• Bank of America is considering a sale of First Republic Bank [WSJ]
• UBS has named Oswald Grübel as the company's new CEO. [FT]
• JPMorgan Chase will have eliminated a total of 12,000 jobs by the time it folds in the operations of Washington Mutual. [AP]
• Yet another massive financial fraud uncovered: Paul Greenwood and Stephen Walsh have been implicated in a $667 million scheme. [NYT]

• 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]

• More details about President Obama's plans to limit Wall Street pay are emerging. So is plenty of criticism. "I don't think the president should paint everyone with the same brush," says JPMorgan's Jamie Dimon. [BN, WSJ, BN]
• Wells Fargo has scrapped plans to host a employee conference in Las Vegas after the bank was pummeled with criticism. [WSJ]
• A dozen top bankers from Merrill-BofA have defected to Deutsche Bank. [TD]
• Lazard's fourth-quarter profits dropped by 50 percent. [DB]
• Daniel Och is doubling down on his hedge fund, Och-Ziff. [WSJ]
• Both Citigroup and the Mets say they're standing by their stadium plan. [NYP]
• Bloomberg LP is laying off staff. [Clusterstock]
• The House will hear testimony about Bernie Madoff today from Harry Markopolos, the investigator who tried to blow the whistle on him. [NYT]

Jamie Dimon is falling apart! Okay, not really, but the Wall Street Journal's Heidi Moore was rightfully concerned by the sight of the JPMorgan CEO when he sat down with CNBC's Maria Bartiromo in Davos today. Dimon turned up "unshaven, with mussed hair and clad in a spare black pullover sweater," and sported a "slightly sleepy, groggy demeanor that indicated he may have just rolled out of bed." Keep in mind, though, that this is Maria Bartiromo he was talking to. Given her illustrious past, it isn't out of the realm of possibility that the two were still recovering from a late night out. [WSJ, CNBC]

• JPMorgan had concerns about Bernie Madoff this fall and decided to pull its own money from Madoff's fund. Why didn't the bank inform its clients? [NYT]
• Andrew Cuomo plans to expand the scope of his investigation into the bonuses paid by Merrill Lynch. [WSJ]
• BofA is planning to defer bonus payments to some staff this year. [FT]
• UBS has cut its bonus pool for 2008 by more than 80 percent. [BN]
• Wall Street bonuses totaled $18.4 billion in 2008, down from about $33 billion in 2007. [NYT, BW]
• Last year will go down as the worst for new home sales since 1982. [WSJ]
• Ford reported a net loss of $5.9 billion for the fourth quarter. [CNN]
• Interested in a Bernie Madoff action figure? You're in luck. [Clusterstock]

With banking stocks caught in a downward spiral, there's a wonderful way for bank CEOs to both demonstrate confidence in the institutions they lead and one-up their rivals: Just buy a lot of stock in your own company! Following the news earlier today that Bank of America CEO Ken Lewis plunked down $1.2 million for 200,000 shares of BoA, JPMorgan's Jamie Dimon has now officially upstaged him by purchasing 500,000 shares in his bank for $11 million. Your turn, Vikram! [Clusterstock]

• JPMorgan Chase posted a 76% drop in profits in the fourth quarter, results that chief Jamie Dimon eloquently described as "very disappointing." [WSJ]
• Washington is close to finalizing a deal to give Bank of America billions in extra cash to help it "digest" the purchase of Merrill Lynch. [Reuters]
• What's Morgan Stanley doing with its bailout cash? It's buying an oil supertanker, which is what we'd do, too, if someone gave us $10 billion. [BN]
• An exec at Blackstone has been charged with insider trading. [CNN]
• Carl Icahn is suing fellow activist investor Warren Lichtenstein. [DB]
• The Dow dropped 248 points yesterday with Citigroup taking a particular beating, shedding 23 percent. But that doesn't mean Vikram Pandit isn't doing his best to keep morale up. [NYP, WSJ]

The Wall Street Journal reports that Bob Rubin is leaving Citigroup and Citi is now in active discussions to unload its Smith Barney unit. Possible bidders include Morgan Stanley and JP Morgan, but there's probably still time to get in on the action if you're interested in picking up a venerated brokerage brand for bargain basement prices. Just shoot a quick email over to vikram.pandit@citi.com. [WSJ]

• Next in line for a bailout: Step right up, real estate developers! [WSJ]
• Currency traders have been least affected by the gloomy bonus season. [BN]
• JPMorgan is purchasing two business units from UBS. [MW]
• The banks that have received taxpayer bailouts paid their top executives nearly $1.6 billion in salaries, bonuses and other benefits in 2007. [DB]
• John Thain's tarnished legacy at Merrill Lynch. [Bloomberg]
• 40 partners have bailed from crumbling law firm Thacher Proffitt. [NYT]
• Tim Geithner's daunting new job: Secretary of Saving the World. [Slate]

The spectacle of ordinary people coping with extraordinary forces runs throughout the cinematic work of Steven Spielberg. And now Spielberg himself is dealing with an unexpected crisis: A credit drought that could kill his studio.

♦ Stocks are poised to move higher today after yesterday's bloodbath. [CNN]
♦ Goldman Sachs may report a loss of as much as $5 billion this quarter, the firm's first quarterly loss since it went public in 1999. [WSJ]
♦ Credit Suisse and HSBC have announced another round of job cuts. [Reuters]
♦ Highbridge Capital, founded by Glenn Dubin and Henry Swieca and owned by JPMorgan, is the latest hedge to suffer a fall. More than a third of its investors are looking to withdraw cash and the flagship fund is down 25%. [WSJ]
♦ One hedge funder doing fine: John Paulson. His firm has already cleared profits of more than $1 billion this year betting that the housing market would crumble and banks would fail. [Bloomberg]
♦ What does the head of a new Congressional panel set up to monitor the bailout have to say about Hank Paulson's strategy? That it does appear Paulson has a strategy. [NYT]

If you see a bunch of glum-looking tellers tomorrow at your local Washington Mutual branch, there's a good reason for that: JPMorgan announced this afternoon that it plans to slash 20 percent of the bank's work force, or 9,200 jobs, following its acquisition of the bank in September. [CNN]

JPMorgan says it's planning to lay off 10 percent of its investment banking staff, or about 3,000 people. The bank also plans to freeze salaries next year for employees who earn more than $60,000 to $70,000. [Bloomberg]

♦ 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]

♦ Goldman Sachs' seven most senior execs have decided to forgo their 2008 bonuses. The move was simply "the right thing to do," said a Goldman spokesman. [WSJ, NYT]
♦ JP Morgan may cut up to 3,000 people, or 10 percent of its global workforce, in the coming months. [Telegraph]
♦ Citigroup's CEO, Vikram Pandit, says the bank plans to eliminate another 50,000 jobs, and cut expenses by as much as 20 percent. [Bloomberg]
♦ UBS reportedly plans to lay off 30 percent of its investment banking division. [Dealbreaker]
♦ Japan has announced that it is officially in a recession. [Bloomberg]
♦ As for the U.S., 96 percent of the economists surveyed in a recent poll believe the economy is in a recession, and nearly three-fourths think it could persist beyond the first quarter of next year. [CNNMoney]

♦ This could get messy: Asian and European markets were mauled on Friday, pointing to another monumental beating for the U.S. market today. [MW]
♦ A recap of Alan Greenspan's humiliating day in front of members of a congressional panel yesterday. [NYT, NYP]
♦ One of the very few people who is having an exceptional year: John Paulson, whose three funds are up between 15 and 25 percent. [WSJ]

JPMorgan chief Jamie Dimon and Citigroup CEO Vikram Pandit don't like each other much: In one widely-reported encounter between the two men earlier this year, Dimon told Pandit to "stop being such a jerk" on a conference call of Wall Street CEOs. It looks like Dimon is getting the last laugh. Not only did Citi announce another huge loss today, and embarrass itself last week with its failed bid to acquire Wachovia, now Dimon's JP Morgan has officially surpassed Citi as the largest bank in the US. If it's any consolation, Vikram, you do live in a nicer apartment building.

♦ The Dow's huge drop yesterday led to an massive sell-off overnight in Asia. What will happen today is anybody's guess. [Marketwatch]
♦ Citigroup reported a $2.8 billion loss for the third quarter. [WSJ]
♦ Merrill Lynch did even worse, reporting $5.2 billion in losses for the quarter. [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]