Bank of America Corp. (BAC) will likely boost its stake in state-owned banking giant China Construction Bank Corp., paying about 36 cents a share (2.46 yuan), or 1.2 times the Beijing-based lender’s book value, China’s Caijing magazine reported last Friday, citing unidentified sources.

This week is shaping up to be another active one on the bailout-and-financing front. First and foremost, Congress returns to work this week to consider a once-unthinkable proposal: Put up billions in taxpayer-backed loans so that Detroit’s “Big Three” can be saved. Expect a fight, however, as the bailout debate finally moves past banks to focus on General Motors Corp. (GM), Ford Motor Co. (F), and Chrysler Corp.

American Express Co. (AXP) today (Tuesday) won approval from the U.S. Federal Reserve to become a commercial bank, giving the credit card titan a crucial lifeline as the risk of defaults runs higher in the slowing global market.

By all reasonable measures, we are already in a recession, says Shah Gilani. Deflation has become today’s number one threat. But massive government rescues mean another bout of inflation looms on the horizon. Shah says investors should look to short vulnerable stocks in 2009. But in 12-18 months, they should be prepared for a “generational opportunity” to make a fortune.

“All of the nations that have resorted to money-printing in the past, ultimately saw a total economic collapse,” says Puru Saxena. The government bailouts and stimulus packages may provide some short-term relief, but the long-term hyperinflation and damage to the dollar will be much, much worse.

The U.S. Treasury Department plans to borrow a record $550 billion in the current quarter, and another $368 billion in the first three months of the New Year – money needed to fund the $700 billion bailout plan the government is using to battle the worst financial crisis since the Great Depression.

Wall Street bond traders estimate that the U.S. government will have to borrow a record $1.4 trillion during the current fiscal year – an unprecedented amount of debt that’s nevertheless needed to cover a federal budget deficit that’s expected to approach $1 trillion for the fiscal year, CNNMoney.com reported.

(The government’s fiscal year differs from the calendar year, and actually began Oct. 1. The $700 billion bailout plan was approved by the…

The U.S. economy shrank at an annualized rate of 0.3% in the third quarter – the biggest decline in seven years – after businesses cut back on investments and consumer spending experienced its sharpest pullback since 1980. And though the contraction was smaller than economists expected, they are still predicting a drawn-out downturn that could be one of worst U.S. recessions since the Great Depression.

The Treasury’s plan to inject $250 billion in capital directly into US banks is underway. But William Patalon III says some of these taxpayer funds will be used by big banks to acquire junior competitors. This means the increase in lending that the plan is supposed to spark will be modest at best. And less competition in the banking sector could mean a rise in fees going forward.

While investors remain extremely concerned about the volatility of the U.S. stock market, the weakness of the American economy and the uncertainty of the global financial markets, last week brought “slight” relief from the excessive panic of the eight-trading-session losing streak.

The Nasdaq dropped 2% yesterday as widespread panic pulled down equities across the board. However, Paul Moore says tech stocks offer good long-term opportunities. He says the best way to hedge risk on individual company shares is with put options. Alternatively, tech-sector ETFs or a market index such as PowerShares QQQ Trust (NASDAQ:QQQQ) will diversify risk across the industry.