As CPN reported in our Daily News REport Morning Edition(subscribe here), bank lending continued to thaw overnight. Overnight Libor has dropped to 1.28 percent, according to the British Bankers’ Association.Asian stocks had a mixed day, but appear to be fighting off a bottom. The Nikkei 225 was up 3.3 percent and the S&P/ASX 200 popped 3.9 percent. The Hang Seng, however, gave up 2.4 percent. Buoyed in part by a French bank bailout infusion, European stocks are up in trading so far today. The French government announced that it will pay $14 billion for debt from six major lenders in return for their promise to boost lending to businesses and consumers. The deal gives to BNP Paribas 2.6 billion euros, Société Générale 1.7 billion euros and Crédit Agricole 3 billion euros. The rest goes to Caisse d’Epargne, Crédit Mutuel and Banque Populaire.Back on our side of the pond, however, after yesterday’s 400-point surge, profit taking may be the morning’s breakfast special. Futures are falling as fear trounces greed in the face of upcoming earnings reports. Meanwhile, it appears Treasury is pressing for bank mergers by directing rescue dollars to strong banks that show interest in buying weak ones, according to a report in The New York Times. Top-tier banks–Bank of America, JPMorgan Chase and Wells Fargo–have already gone shopping, but it appears, according to unnamed sources, that Treasury would like to see second-level folks do likewise. These would include regional “superbanks” like KeyCorp of Cleveland; Fifth Third Bancorp of Cincinnati; BB&T of Winston-Salem, N.C.; and SunTrust Banks of Atlanta.Saving banks is all well and good, but what about our personal bailout? After Fed Chief Ben Bernanke came out supporting another stimulus package yesterday, which we only hope works better than the last one, back on the table is the issue of doing something for individual mortgage holders. Yesterday, President Bush appeared to go along with it, but what part of government largesse is he opposing these days? In that vein, House Financial Services Committee Chairman Barney Frank and Representative Maxine Waters sent the White House a letter urging that Federal Deposit Insurance Corp. Chairman Sheila Bair be tapped for a special position to coordinate government efforts to stem the foreclosure red-ink and renegotiate mortgages for homeowners in financial trouble. Presently she’s managing more than 700,000 Indymac mortgages and apparently is doing interesting work renegotiating them, according to Bloomberg News. Hechova job, Sheila. Problem is that this is both more complicated and more expensive than tossing money at banks. But housing market problems promise to continue mounting. At the moment, according to a CNBC report, experts expect home prices to plunge another 15 percent in the next 18 months—and consequently banks are just not lending on houses. In fact, 30-year rates have gone up since January.If you would like to partake of our Upcoming News digest with your morning coffee, please subscribe to ourDaily News REport Morning Edition.