big story - agency max rising?  -  $1M MORTGAGE BUYBACKS SEEN - Smart-money investors are betting that the Obama administration will start leaning more on Fannie Mae and Freddie Mac to kick-start the housing market by giving them the OK to buy mortgages worth up to $1 million.  Current law prohibits the two government-run mortgage giants from buying home loans valued at more than $417,000 nationally, or up to $729,00 in areas where home prices are high. But some mortgage traders and analysts think that could soon change. - NY Post  

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Dugan vs. Bair:  The Big Banks’ Best Friend in Washington - By Steven Pearlstein - … Until now. For it seems the too-big-to-fail crowd has found an unapologetic advocate in John Dugan, the comptroller of the currency and the very regulator whose job it was to prevent the banks from getting into this much trouble in the first place. … - Washington Post

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U.S. will eventually adopt ‘bad bank’ plan, PWC says - By Alistair Barr - The U.S. government will eventually adopt a “bad bank” plan to purchase toxic assets from struggling lenders, despite avoiding such a solution so far, accountancy firm PricewaterhouseCoopers said Wednesday. - MarketWatch

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Obama Considering a National Sales Tax: Let Them Eat Cake - John Spencer Boyd -  It’s the most efficient way to generate revenue and discourages over consumption. If Democrats really want to tax the rich and their lavish birthday parties (thanks Steve Schwartzman), this is how you do it. The income tax is an antiquated, inefficient and economically destructive form of tax that distorts economic activity. The richest people I know have very little taxable income and some pay zero income taxes each and every year unless its by accident. - interesting arguments - BlindReason.org 

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Bair Says Banks Can’t Buy Own Assets in PPIP Auction - By Alison Vekshin - … Letting banks bid on their own assets “is a good idea” that the government should embrace, FBR Capital Markets Corp. analyst Paul Miller said today in a Bloomberg Television interview. … - Bloomberg

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Obama must soon decide whether to keep Bernanke on - By David Ignatius - Sometime this summer, President Barack Obama will have to start thinking about one of the big decisions of his presidency - whether to reappoint Ben Bernanke as chairman of the Federal Reserve when his term expires next January. … He’s still something of a sleeper in Washington, so low-key that the frequent descriptions of his “soft-spoken” manner don’t do justice to just how quiet he is. But in fixing the financial breakdown, he has been a veritable tiger. The Bernanke Fed is so much more powerful than its predecessors that it’s almost a different institution. - Lebanon Daily Star