Today's Headlines

Bloomberg:
- Yields on agency mortgage-backed securities relative to US Treasuries narrowed for the first time in seven days, falling 7 basis points, potentially lowering home loan costs for the most creditworthy borrowers.
- The Federal Reserve said it will expand two short-term auctions this month to $100 billion, from $60 billion, to address “heightened liquidity pressures in term funding markets.”
- Highland Capital Management LP, whose largest hedge fund lost more than 15% this year as the value of credit investments slumped, is preparing to invest another $1 billion to buy debt at record-low prices.
- Saracen Energy Partners LP, the Houston-based hedge fund, lost as much as 22% of its value last month because of wrong-way bets on the price of US natural gas.

Wall Street Journal:
- With federal regulators prodding banks to raise more capital, Washington Mutual(WM) and other battered lenders have approached private-equity firms and sovereign-wealth funds about possible cash infusions.
- In papers filed with the court, Delphi's attorney said the company has "credible information" that at least one member of its investor group has been "trading and/or shorting" the company's public securities.

NY Times:
- NYC Charter School Promises to Pay Teachers $125,000.

CNBC:
- NY Governor Eliot Spitzer said bond insurer Ambac Financial(ABK) will be able to maintain its AAA credit rating for the “foreseeable future” after raising $1.5 billion in capital.

USA Today:
- Federal archivists at the Clinton Presidential Library are blocking the release of hundreds of pages of White House papers on pardons that the former president approved, including clemency for fugitive commodities trader Marc Rich.

IBD:
- The path to shares prosperity is not measured by income inequality, but rather by the life all citizens live relative to their alternatives. Over the last 55 years, the world has witnessed how societies that embrace individual wealth creation and accumulation provide living standards far greater than those promoting income equality.

San Francisco Chronicle:
- California Ruling Clamps Down on Homeschooling.

ECB:
- Trichet Says ECB ‘Closely Monitoring’ Market Turmoil.

globeandmail:
- CIBC will spend $102.4 million on an incentive plan to retain its 1,300 stockbrokers.

The Scotsman:
- Hillary Clinton has been branded a “monster” by one of Barack Obama’s top advisers, as the gloves come off in the race to win the Democrat nomination.