BETWEEN THE HEDGES: Today's Headlines

Bloomberg:

- Treasury Secretary Timothy Geithner urged banks to “go the extra mile” and keep credit flowing to U.S. businesses, saying that refusing to make loans will worsen the faltering economy. “When banks individually pull back out of a sense of prudence and caution, the collective impact of those actions will make the economy weaker and make each individual bank worse off,” Geithner said in prepared remarks at the White House in Washington.

- The cost to protect North American corporate bonds from default fell to the lowest in two weeks, trading in a benchmark credit-default swaps index shows. Credit-default swaps on the Markit CDX North American Investment-Grade index of 125 companies in the US and Canada dropped seven basis points to 229 basis points as of 12:49 pm in NY, according to broker Phoenix Partners Group. Contracts tied to General Electric’s finance arm declined the equivalent of 13 basis points to 700 basis points, Phoenix prices show. Default swaps on Citigroup Inc. fell 23 basis points to 511 basis points, according to CMA Datavision in London. Contracts on Bank of America fell 28 basis points to 272 basis points, and Wells Fargo of San Francisco dropped 11 to 206.

- Bernanke May Buy Treasuries After Gilt Yields Fall. Ben S. Bernanke may have something to learn from his former Massachusetts Institute of Technology colleague Mervyn King. By buying government securities to increase the supply of money, Bank of England Governor King is taking a step that Federal Reserve Chairman Bernanke has only talked about. Early results have been encouraging: Yields on 10-year U.K. government bonds fell to 2.94 percent March 13, at least a 20-year low, from 3.64 percent before King announced the policy March 5. “The BOE is providing an actual experiment in answering some of the concerns that the Fed has about the effectiveness” of using the strategy to effectively print more money, says former Fed Governor Laurence Meyer, now vice chairman of St. Louis-based Macroeconomic Advisers LLC.

- Wells Fargo & Co.(WFC) Chairman Richard Kovacevich criticized the U.S. for retroactively adding curbs to the Troubled Asset Relief Program, which he said forced the bank to cut its dividend, and called the administration’s plan for stress-testing banks “asinine.” When the U.S. Treasury persuaded the nation’s nine biggest banks to accept capital investments in October, it signaled the whole industry was weak, Kovacevich, 65, said in a March 13 speech at Stanford University in California. Even though Wells Fargo didn’t want the money, it must comply with the same rules that the government placed on banks that did need it, he said. “Is this America -- when you do what your government asks you to do and then retroactively you also have additional conditions?” Kovacevich said. “If we were not forced to take the TARP money, we would have been able to raise private capital at that time” and not needed to cut the dividend to preserve cash, he said.

- Barclays Plc said it had a “strong start” to 2009 and continues to perform well as the U.K.’s third-biggest lender tries to bolster its capital without giving a stake to the government.

- Cisco Systems Inc.(CSCO), the largest maker of networking equipment, introduced its first server computers for corporate data centers that make it easier to manage equipment and information over their networks.

Wall Street Journal:

- The Obama administration, moving with increasing speed, has inked the main contours of its plan to revamp financial-market oversight -- changes that will ripple through the economy, affecting everything from the operations of international banks to consumer protection. The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.

- "Throughout my 14-year career in gold, I have never been busier," UBS AG's global metals strategist John Reade said on a conference call Friday with clients. He said he'd been "nearly overwhelmed" by inquiries from clients looking to gain exposure to gold.

CNBC.com:
- China probably won’t dump dollar assets because it doesn’t want to risk hurting its massive holdings of US currency or its competiveness, Goldman Sachs International Vice Chairman Robert Hormats said.

- Capital One Financial(COF), one of the largest issuers of MasterCard and Visa credit cards, reported a better-than-expected credit performance in February, sending its shares up as much as 8.2 percent.

- The Financial Accounting Standards Board, which sets U.S. accounting rules, proposed Monday to allow companies to exercise more judgment in determining if a market for an asset is active and if a transaction is "distressed." FASB put the proposals out for comment, with the hope of having the mark-to-market accounting guidance approved in time for companies to use it when preparing their first-quarter financial reports.

NY Times:

- Democratic leaders in the State Senate will seek income tax increases on at least some affluent New Yorkers and a sales tax increase of a quarter of 1 percent to help balance the state budget, a Senate official with knowledge of the plans said in an interview over the weekend. “The hole is too deep to dig ourselves out by cuts alone,” said the Senate official, speaking on the condition of anonymity because the details of the proposal were still being hammered out. “The debate now is over where to start.” The move by Senate Democrats, who have a slim majority, will significantly increase pressure on Gov. David A. Paterson, who has said he would consider raising income taxes only as a last resort and only after the Legislature had agreed to steep cuts in state spending.

CNNMoney.com:

- President Barack Obama’s approval ratings are slipping as Americans fret about the economy, a CNN poll found. Obama’s approval rating declined to 64 percent in a March 12-15 survey conducted for CNN by Opinion Research Corp. That’s down from 76 percent in a Feb. 7-8 poll. The new president’s disapproval rating climbed to 34 percent from 23 percent.

LA Times:

- Although the formal unveiling is still a couple of weeks away, the broad outlines of President Obama's long-delayed plan for reviving the nation's financial system are coming clear: an ambitious but untested attempt to partner up private capital with government funds while limiting the risk to taxpayers. Under the emerging plan, Washington would finance the creation of several investment funds charged with buying up to $1 trillion of the toxic mortgage-backed securities and other bad assets now corroding the books of huge financial institutions such as Citigroup Inc.

FINalternatives:

- Two hedge funds can be counted among the recipients of American International Group's government-subsidized payouts. Citadel Investment Group and Paloma Securities—a branch of Conn.-Based Paloma Partners—were paid $200 million each of taxpayer dollars between Sept. 18 and Dec. 31, according to the list of securities lending counterparties released on Sunday by AIG.

Miami Herald:

- Latin American nations are struggling through the worst economic decline in many years, but MasterCard(MA) says its business in the region is still expanding at a healthy pace.

- Add this number to the many fact and figures being bandied about during this recession: 246,957, the record-high number of GMAT exams administered to aspiring MBA candidates last year. So far this year, numbers of test-takers show the volume looks to be even greater.

The Hill:

- New AARP chief gave big to Obama. As an organization, the AARP strenuously insists on its nonpartisan identity, and its senior leadership ranks include executives with both Democratic and Republican backgrounds. The AARP also is atypical among Washington's heavy hitters because it does not have a political action committee (PAC), make political contributions or endorse candidates.

USAToday.com:

- Automakers envision electric cars as a solution to gas price jumps. Environmentalists see bluer skies. And electric utilities? They could be the biggest winners of all. Electric cars use lots of juice and are typically plugged in to recharge at night when utilities have excess power-generating capacity. That's great for power companies.

- Despite the poor economy, Comcast Corp. and Sony Corp. plan to open a retail store Tuesday. The cable TV operator and the electronics company will use the store to showcase new technologies and products, taking a page from Apple Inc., as Microsoft Corp. might also soon try to do. The store will be called Sony StyleComcast Labs and ensconced in the Comcast Center, the newest skyscraper in Philadelphia and headquarters of the nation's largest cable operator. The store, more than 3,400 square feet, will show off such things as home broadband equipment that would enable people to surf at 100 megabits per second — roughly 17 times the average speed of cable broadband. Comcast plans to roll out service that fast by year's end.