Stakes is high

Treasury announces it will raise stake in Citigroup to 36%; Pandit will stay. (NYT)

Obama and Orszag introduce new budget; Wall Street Journal publishes analysis with headline “Wealthy lose out as others gain.” (WSJ)

Gates ends policy banning pictures of soldiers’ coffins. (AP)

FBI arrests Stanford investment chief; SEC was alerted of Ponzi scheme five years ago. (FT)

Commerce announces economy shrank at 6.2% rate last quarter, most in 26 years. (Bloomberg)

Continuity and conflict

Panetta‘s CIA will continue many Bush operations, including drone attacks and renditions. (WSJ)

Latest financial fraudsters: Greenwood and Walsh. (NY Daily News)

Fidelity chief condemns FDR’s unproductive “make-work” projects, signals greater spending on lobbying to fight second New Deal. (Boston Herald)

GM posts $9.6 billion 4Q loss; lost $30.9 billion in ’08. (Detroit Free Press)

Citi nears deal with US government on 40% stake; Parsons struggles to find new board members. (WSJ)

Roberts’ reign

After spending the better part of five years running for office, a victorious John F Kennedy set out to realize the promises made in the course of his 1960 presidential campaign, which was built on the New Frontier theme. As William Domhoff recounts in The Powers That Be, while Kennedy was an expert campaigner, he lacked executive experience and was overwhelmed by the task of filling hundreds of appointments in the upper realms of the Federal bureaucracy. He thus turned to Robert Lovett, a financier who’d been an ally of his father. Domhoff writes:

Continue reading Roberts’ reign

Swinging to new lows

BofA and Citi sell-offs send banking shares to 17-year low. (FT)

FBI serves billionaire in Virginia; SEC investigates whether firm was Ponzi. (WaPo)

Treasury and Fed plan to subsidize shadow banking system of hedge funds, private equity. (NYT)

After firestorm of protest, Murdoch‘s Post offers qualified apology for cartoon likening Obama to chimp. (BBC)

Kerry, Ellison, Baird tour Gaza; Kerry’s is highest-level visit from US official since Hamas took power two years ago. (AP)

Times suspends dividend payments, long a source of cash for Sulzberger clan. (Bloomberg)

Unsafe havens

In tax scam settlement, Swiss bank UBS agrees to turn over names of 250 wealthy American tax dodgers; Kurer remains committed to secrecy. (Bloomberg)

Criminal trial of WR Grace execs for role in Libby, MT asbestos disaster begins today in Missoula. (NYT)

Sebelius emerges as likely HHS pick. (NYT)

Free of TARP backlash, mutual funds make compensation comeback on Wall Street; Franklin ResourcesJohnson takes home $5.3 million despite big losses. (WSJ)

Bernanke sees contraction. (WaPo)

There will be fraud

SEC charges Texas tycoon with $8 billion fraud; influential Democratic lobbyist, millions in contributions to Party, Charlie, Greg, Bill, Pete, & co helped him gain clout in Capitol. (WSJ)

Chrysler and GM request billions more in aid; Wagoner points to strong record of cost-cutting in announcing brand, factory, workforce reductions. (Detroit Free Press)

Burris admits fundraising attempt, moving prosecutor and committee to begin investigations. (WaPo)

Gates and Obama disagree on whistleblower protections; Gates sees extending rights to DIA, CIA, FBI, NSA as national security threat. (WaPo)

Goldman‘s Winkelried to retire at 49. (Bloomberg)

Creditors due

California senate in budget stalemate; governor to terminate 10,000 employees. (LA Times)

Holder-led Justice defends withholding of Bush administration secrets related to wiretapping, telecom lobbying, traveler screening, FBI data warehouse. (AP)

GM readies bankruptcy plans; Lazard banker turned union official appointed Treasury‘s auto adviser. (WSJ)

Trump Entertainment goes belly up; Donald blames bondholders. (FT)

Propeller-head” in spotlight, again; huddles with Donovan to fix housing. (NYT)

Cheney pressed for pardon of Libby, was outraged when Bush refused. (NY Daily News)