Overallotment: April 6

• Must Read: IMF to warn toxic debts will reach $4 trillion, higher than Roubini's prediction (Times Online)
• GM accelerating bankruptcy preparations (Bloomberg)
• CBO update: US deficit nearly $1 trillion in first half of FY 2009 (Reuters)
• Doug Kass joins Cramer on staking his reputation for S&P at 1,050 (The Street)
• Treasury to open up PPIP to small hedge funds, banks can still buy toxic garbage creating mother of all conflits of interest (FT)
• Who killed the U.S. public pension systems (The Barricade)
• ...As the remaining public pension funds want in on the toxic fun (Reuters)
• Some more on the ongoing CDS unwinding at AIG (Business Week)
• Australia steals PPIP idea.... to build a broadband internet network (Bloomberg)

Market summary from Robert Savage:

Quiet day to begin what should be a quiet week in front of the holiday weekend. US equities were unable to sustain overnight gains, led lower by financials and cyclicals. Though after five straight up days, few are surprised or even disheartened. So the USD was bid and carry sold off, and those trading were merely booking profits or reducing risk. More worrisome for the longer-term – especially for those who have placed their faith so completely in QE – US fixed income continues to sell off. 10 year yields now 2.93% and closing in quickly on the 3.00% seen before the Fed pulled out its bazooka. Perhaps the market is slowly coming to realize what economics majors learn in their first semester: prices are set at the margin. The Fed can suppress yields only as long as it remains in the market; the Fed can only suppress yields if it commits to unlimited Treasury purchases. $300bn is a lot, but it’s not unlimited. Operation Twist failed in the 60s, are we foolish to think it might succeed today? But questions like this will not inspire more than idle chatter this week, as few can yet muster the bravery to fade this rally.