Bank of America to Pay for Merrill Backstop, Faces SEC Trial (Bloomberg)

Ken Lewis trying hard to buy his way out of trouble, saying BofA will pay $425 million to cancel one piece of unused federal guarantee of Merrill Lynch's assets. Lewis frantically trying to reduce "reliance on government support and return to normal market funding." Will it help fend off the government? SEC says it will "vigorously pursue" its bonuses case against the bank, and maybe the SEC means business now that federal judge Jed Rakoff is on the agency's back.

Liquidation of CDOs aids banks (FT)

Market has loosened up for the assets underlying the complex, toxic securities that crashed Wall Street. An estimated $123 billion of these bullshit, defaulted securities that fed the Street's excessive greed have been liquidated.

Is This a Sucker's Rally? (Seeking Alpha, Jeff Miller)

A good roundup of bloviations good and bad.

Why haven't any Wall Street tycoons been sent to the slammer? (McClatchy, Kevin G. Hall)

In search of a "poster child for the Great Recession." Hank Paulson's always a candidate.

Envoy seeks to ditch 'bullying' US image (FT)

Louis Susman, Obama fundraiser and now U.S. ambassador to the U.K., announces that the Bush Era is officially over: "We are not a dumb power, we are not a bullying power." He adds: "To compare it to the previous relationship, well, some people might say that relationship wasn't healthy. Many people here in the UK didn't think it was healthy because it was without questioning and interaction."

MORE HEADLINES FOLLOW

Friends Don't Let Friends Bring Up Health Care (WSJ)

"Our lack of civility concerning the current debate ... is out of control. Must we behave like we're auditioning for Jerry Springer?" Whatever! You don't know me! Situation's worse within the two-career families in which one of the laid-off members gets a job offer out of town and they have to have a long-distance relationship.

F.D.I.C. May Borrow Funds From Banks (NYT)

Why is it so weird to think about the healthy banks bailing out the FDIC's rescue fund for the sickest banks?

You Cannot Be Serious: US Strategy for the G20 (Baseline Scenario, Simon Johnson)

Obama Administration is trying hard to make other countries change while remaining unwilling to make basic changes (like more regulation) in the very areas that caused the global financial meltdown.

Singapore's GIC Pares Citigroup Stake to Below 5% (Bloomberg)

Singapore government makes $1.6 billion profit off the deal, thanks to the U.S. taxpayers' continuing bailout of banks.

Former Pariah Qaddafi's U.S. Trip Seals Courtship of Libya Over Oil Deals (Bloomberg)

Everyone but the Lockerbie families is making nice with the Libyan leader as he comes to New York this week. You have to love a guy who's sitting on so much oil. Besides, he's launched a mammoth government-infrastructure investment program that's called "one of the most attractive business opportunities in the world."

US-EU rift clouds climate summit (FT)

Brrr! Chilly today on the East River for the U.N. meetings. Europe is pissed that Senate Majority Leader Harry Reid says cap-and-trade legislation may be postponed until next year. John Bruton, EU ambassador to the U.S.: "Sometimes in this country, the greatest deliberative body in the world [the Senate] acts as though it is the only deliberative body in the world and that we should all wait until it gets healthcare passed." Related: See "Why reducing carbon dioxide will be so difficult."

Dow Jones to shutter Far Eastern Review (BusinessWeek)

Respected magazine that "in its prime rattled Asia's authoritarian power brokers with its rigorous reporting" will cease publication. Only a matter of time before new owner Rupert Murdoch, who has long tried to interfere in reporting that could threaten his Chinese business interests, would close the mag. As a 2007 NYT story noted, "Mr. Murdoch is well-known for making editorial decisions in China to serve News Corporation's business interests there."

China's Rich Youth Spark Bitter Divide (WSJ)

Class conflict in China. Mao would send the rich punks to re-education work farms, but those days are over.

Internet Providers Push Back Against 'Net Neutrality' Proposal (WSJ)

Cuomo's Political Prospects Get Unexpected Boost (WSJ)

Obama's pressure on NY Governor David Paterson to not run for election definitely helps AG Andy Cuomo, who's making hay from the financial crisis by hounding Wall Street. NYT version: "White House Is Taking a More Aggressive Role in State Races."

What did Hank know and when did he know it? (NY Post, John Crudele)

Did Henry Paulson use his government job to bail out his buddies? A look at his phone logs.

Times' trouble with pay (NY Post)

Ailing New York Times Co. gave its top execs more pay and stock options than they were allowed — at the same time it was "slashing salaries, selling assets and scrambling to shore up its balance sheet." Hard to imagine any company doing that.