- Treasury Secretary Henry Paulson is said to be considering a plan to restructure the current bailout plan to return the Treasury to the original plan of buying up mortgages, this time with the intent of lowering their interest rates to 4.5% so homeowners won’t go into foreclosure. There is no guarentee this will get banks lending or that it will actually have any result. So… another day, another plan.

- Bank of America could lay off as many as 10,000 employees. So if you think an automobile bailout will secure jobs, look to the financial bailout for guidance on that.

- A lawsuit by shareholders alleges CIti executives sold their shares at inflated prices while concealing how bad the company was doing. Those named include Clinton administration goldenboy and former Treasury Secretary Robert Rubin.

- Now their are calls to make a stimulus package $1 Trillion Dollars. Take that Dr. Evil, we can hold the country hostage for a higher amount than you can!

Auto’s
- Yesterday Representatives of the United Autoworkers said their union is willing to consider concessions to help their employers receive billions in bailout money. The problem? While they talk now of concessions their is no guarantee the vote will actually go that way and no major concessions beyond giving up the heavily criticized “jobs bank” program (which gives laid off employee’s 95% of their pay) have been offered. Skepticism abounds.

- GM & Chrysler say they may be willing to accept bankruptcy for a bailout but are still dragging their feet over what they see will become a loss of confidence in the marketplace.

- Daniel Gross writes about a Detroit Delusion

- Even with a bailout things look bleak

Other bad business news

- Adobe has cut 600 Jobs

- The downturn has apparently hit Dubai

- Good morning, the government just gave yet another bailout saving Citigroup which you probably thought wasn’t even having problems.

- Citigroup largely hit this mess because the Treasury decided NOT to spend the bailout $ the way Congress approved. Instead of buying up bad loans the Treasury started buying shares in financial institutions leaving Citi holding toxic assets it thought the government would buy. The new plan? Potentially creating bad government banks where these bad assets will be owned by taxpayers.

- You were pissed at $700 billion? See how you feel with 7.4 trillion or half of the nations entire earning last year. That amount appears to be what the government is willing to spend to “save” the financial system.

- Speaking of $700 billion, that is the number Democrats want to spend on a new stimulus package

- Obama & Joe Biden will hold a press conference to announce their economic team today

Update: Protective Life Corporation & CIT are both becoming “Bank Holding Companies” and will try for that sweet federal cash. Meanwhile HopFed Bancorp has received preliminary approval to participate in the TARP bailout.

- Thankfully widespread division has stalled a proposed bailout for the auto industry leaving Senate Majority Leader Harry Reid reversing course and cancelling a test-vote in the Senate. We will see if it holds. Meanwhile GMAC’s financial services arm is filing for bankruptcy and wants to become a bank holding company so it can access funds in the $700 Billion bailout package already approved by Congress

- Yesterday the DOW spiraled down more than 427 points reaching the lowest point in awhile reaching 7,997.28

- Today the jobless claims report came out and things, well, not so good. Claims rose to 542,000, a 16-year high. Boing will cut 800 jobs in Kansas

- In response to the claims # crude oil fell to $49.91 a barrell

- Saudi Prince Alwaleed Bin Talal is raising his ownership in Citigroup to 5%. The prince is the companies largest individual shareholder.

- The FED is hinting at yet another rate cut as it lowers its projections on economic growth

- Billionaire investor and heavily touted leader in financial thinking Warren Buffet is now feeling the pinch

Update #2: Mitt Romney argues “Let Detroit go Bankrupt in a new op-ed for the New York Times

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

Update: Consumer prices drop a record 1%, Housing starts fall 4.5% to lowest level since 1959

Today new numbers on housing starts, building permits and the consumer price index before the opening bell today. DOW futures have lowered in anticipation of the news and after overnight falls in foreign markets.

- When going to Congress to beg for money, try not taking a $20,000 a trip private jet.

- Top auto executives will return to Capitol Hill today to beg for cash

- The Economist writes that CITI will need to do more than just layoffs in order to show it is in control