Economic Indicators

Morning Economic News - February 10, 2009

2009-02-10T00:01:00.001-08:00

Commentary and Overnight Trading

Overnight trading results early Tuesday [2:57 AM Eastern] are almost as lackluster as Monday's US stock market returns. The Nikkei closed down 0.29%, while the Hang Seng is up 0.01%, while US stock market futures are down just under 1%. Oil is up 26 cents a barrel and gold is up 0.39% while silver is down by the same percentage. The dollar is down slightly against the yen, up solidly againsg the euro, pound and Canadian dollar.

Economic Reports

Employment Trends Index - January 2009

Employment Trends Index: 96.6

Monthly Change: Down 1%

Year-to-year Change: Down 18.6%

What I'm Reading

Slowdown Hits Emerging Markets

The global downdraft is hitting emerging economies with a speed and ferocity few imagined possible just months ago.

China's Inflation Slows to 1%, Weakest Pace in Two Years, as Economy Cools China’s producer prices tumbled by
the most in almost seven years and inflation cooled to the
weakest pace since 2006 as the government struggled to revive
growth in the world’s third-biggest economy.

BOE's King Must Print Money Now to Escape Credit `Mess,' Former Aides Say Bank of England Governor Mervyn King
should print money now and abandon economic assumptions that
have failed to save the U.K. from its worst recession since
World War II, a group of former central bank economists said.

U.K. Home Sales Drop to Lowest Since at Least 1978 as Recession Deepens U.K. housing sales dropped to the
lowest level since at least 1978 in the quarter through January
as property prices dropped further and Britain’s recession
deepened, the Royal Institution of Chartered Surveyors said.

Australia's Business Confidence Plunges to Record Low as Exports Decline IOOF Holdings Ltd. and Australian
Wealth Management Ltd., the asset managers that agreed to merge
last year, said funds under management plunged as financial
markets tumbled amid the global credit crisis.

Japan's Consumer Sentiment Stayed Near Record Low in January on Job Cuts Japan’s consumer sentiment stayed
near its lowest level in at least 26 years in January,
indicating households are likely to keep cutting spending.

South Korean Economy to Shrink 2%, Government to Boost Spending, Yoon Says South Korea’s new Finance Minister
Yoon Jeung Hyun pledged to increase stimulus spending after
forecasting the economy will contract about 2 percent this year
and lose around 200,000 jobs.

Bond Vigilantes Drive Treasuries to Worst Start Since 1980 in Test of Fed The bond vigilantes may be making a
comeback.

ECB Says Mixing Bad-Bank Plan, Asset Guarantee Would Curb Toxic-Paper Cost The European Central Bank said
governments should consider combining a so-called bad bank with
guarantees of securities to achieve the most cost-effective way
of ridding lenders of toxic assets.

Morning Economic News - February 9, 2009

2009-02-09T00:52:00.000-08:00

Commentary and Overnight Trading

US stock market futures show a market set to give back about a third of Friday's gains in the opening hours as delays in the Fed's Term Asset-Backed Securities Lending
Facility and the Obama administration's financial rescue package are reported. The Nikkei dropped 1.33% Monday, while the Hang Seng is up 0.84% [3:50 AM Eastern]. Oil is down half a percent and gold is down more than 1%, while industrial metals are up. The dollar is trading up against the euro, pound and Canadian dollar, down against the yen.

Economic Reports

Consumer Credit - December 2008

Total outstanding consumer credit: $2562.3 billion

Total rate of change: Down 3.1%

Employment Situation - January 2009

Nonfarm Payroll Employment: 134,580,000

Monthly Change: Down 598,000

Unemployment Rate: 7.6%

What I'm Writing

Financial Roadmap: The Week Ahead February 9 to 13, 2009

This week will be fairly light in the number of economic indicator releases, but some of the numbers could be very revealing...the markets are in one of those weird moods where bad news is seen as
bringing relief closer. This is normally Fed focused, but with the Fed
sidelined by a lack of ammunition, it's now fiscal policy focused. And
that's where the biggest news of the week may come from, as Congress is
likely to put the finishing touches on a fiscal stimulus package early
in the week.

What I'm Reading

Real-Estate Sector Cheers Tax Credit

A proposed tax credit for home purchases is raising the
hopes of the real-estate industry, which believes it could stabilize
the housing market.

U.S. Delays Financial-Rescue Plan as Officials Grapple With Toxic Assets Treasury Secretary Timothy Geithner
delayed the announcement of the Obama administration’s
financial-recovery plan as officials debated proposals aimed at
addressing the toxic debt clogging banks’ balance sheets.

Japan Machinery Orders Fall for Third Month, Corporate Bankruptcies Climb Orders for Japanese machinery fell
for a third month in December and bankruptcies increased as
businesses scrapped investment plans amid a collapse in exports
and deteriorating earnings.

India's Economy Forecast to Expand 7.1% This Year, Weakest Pace Since 2003 India’s economy may grow at the
slowest pace since 2003 this year, undermining Prime Minister
Manmohan Singh’s re-election bid in two months.

Taxpayers Risk $9.7 Trillion on Bailouts as Senate Debates Obama Stimulus The stimulus package the U.S. Congress
is completing would raise the government’s commitment to solving
the financial crisis to $9.7 trillion, enough to pay off more
than 90 percent of the nation’s home mortgages.

Taiwan's Exports Decline by a Record 44.1% as Sales to China, U.S. Tumble Taiwan’s exports fell by an
unprecedented 44.1 percent last month on reduced global demand
for the island’s computer chips, laptops and mobile phones.

Japan's Recession May Be Worst in Half Century, BOJ's Chief Economist Says Japan’s economy is deteriorating at a
pace unseen in the past half century, the central bank’s chief
economist said.

China Exports May Fall by Most in Decade as Demand Plunges in U.S., Europe China’s exports probably fell by the
most in a decade in January as demand dried up in the U.S. and
Europe, making it harder to revive growth in the world’s third-
biggest economy.

Morning Economic News - February 6, 2009

2009-02-06T00:39:00.000-08:00

Commentary and Overnight Trading

Asian indexes are up strongly Friday morning, with the Nikkei closing up 1.6% and the Hang Seng up more than 3% at this writing [3:30 AM Eastern]. US stock market futures are marginally higher, but much less than the Asian markets. Oil futures are down 1%, just above the $40 mark. The dollar is up against the Canadian dollar, down against the yen, euro and pound.

Economic Reports

Monster Employment Index - January 2009

Index: 118

Monthly Change: Down 13

Year-to-year Change: Down 42 Points

Money Supply - February 5, 2009

M1 Seasonally Adjusted Prior Month: $1595.8 billion

M1 4-Week Average: $1584.5 billion

M1 Annual Change (Unadjusted): $238.3 billion

Jobless Claims - February 5, 2009

Initial Claims: 626,000

Change from Last Week: Up 35,000

Japanese Leading Index takes biggest tumble in over 30 years

The Japanese Leading Index experienced its biggest monthly decline in
more than thirty years in December, dropping 4.3%, while the Coincident
Index dropped 1.4%. Still, four leading indicators improved: real money
supply, stock prices, interest rate spread, and the (inverted) business
failures*.

What I'm Reading

States' Jobless Funds Run Low

A growing number of states are running out of cash to pay
unemployment benefits, a development that comes as initial jobless
claims passed 600,000 last week.

Fed Calls Emergency Consultants to Triage and Treat AIG, Stricken Markets Every Sunday night, New York
bankruptcy lawyer Marshall Huebner spends a 13-hour shift on
call as an emergency medical technician. His day job involves
work on another sort of rescue: The government’s $152.5 billion
bailout of American International Group Inc.

Sarkozy Defies Protests, Promises $10.2 Billion Cut in French Business Tax French President Nicolas Sarkozy
defied calls for more aid to consumers, saying his 26 billion-
euro ($33 billion) plan to spur investment will cushion a
deepening economic slump and increase productivity.

U.S. Jobless Rate Probably Climbed to 16-Year High as Recession Deepened Unemployment in the U.S. probably
climbed in January to the highest level since 1992 and payrolls
dropped for a 13th consecutive month as the recession showed no
sign of abating, economists said before a report today.

Australian Central Bank Cuts GDP, Inflation Forecasts, Says Rates to Help Australia’s central bank slashed its
forecasts for economic growth and inflation, increasing Governor
Glenn Stevens’s scope to extend interest-rate cuts that have
taken the benchmark rate to the lowest in more than four decades.

Shirakawa Says Bank of Japan Will Limit Asset Buying to Save Balance Sheet Bank of Japan Governor Masaaki
Shirakawa said the central bank will limit its purchases of
stocks and corporate debt to protect its balance sheet and the
credibility of the yen.

Hong Kong January Luxury Home Sales Surge 31% as Lower Prices Lure Buyers Sales of Hong Kong luxury homes rose
to their highest in six months in January, indicating that prices
may have stabilized as buyers seek bargains, according to data
by Centaline Property Agency Ltd.

Geithner's Window to Halt Flight of Capital From U.S. Banks May Soon Close Treasury Secretary Timothy Geithner
must use his Feb. 9 speech to lure private investment to U.S.
banks or risk an accelerating flight of capital that would
result in creeping nationalization, analysts and investors said.

India Bucks Global Auto Trend After Rate Cuts Spur Record Sales at Suzuki After six months of deliberating
whether to buy a car, Mumbai real-estate agent Abraham Mathew
took out a 300,000 rupee ($6,200) loan to buy a Suzuki Motor
Corp. sedan. The clincher: a 20 percent fall in interest rates.

Morning Economic News - February 4, 2009

2009-02-04T22:24:00.000-08:00

Commentary and Overnight Trading

Oil prices have rebounded slightly in overnight trading after falling a bit more than 1% Wednesday. Asian stocks are mixed with the Nikkei down 1.11% with an hour before the close and the Hang Seng up 2.69%. US stock market futures are down with the DJIA futures trading below 7900. The dollar is down against the Canadian dollar and the yen, even against the euro and up against the increasingly beleaguered pound. [1:24 AM Eastern]

Economic Reports

ADP Employment Report - January 2009

Total Nonfarm Private Employment: 112,702,000

Monthly Change: Down 522,000

Pending Home Sales Index - December 2008

Pending Home Sales Index: 87.7

Monthly Change: Up 6.3%

Yearly Change: Up 2.1%

Weekly Mortgage Applications Survey - February 4, 2009

Market Composite Index: 795.4

Change: Up 8.6%

Purchase Index: 261.4

Change: Down 11.2%

What I'm Writing

Stabilizing gasoline demand putting floor under oil

On the demand side, gasoline demand is 0.5% below the same period last
year – stabilizing if not exactly rebounding in the face of retail
prices well below last year's levels...gasoline supply and demand factors may be feeding through to the
increases in crude oil prices that do not seem driven by supply side
fundamentals.

What I'm Reading

CBO: Obama Stimulus Plan Lowers Long-Run Growth

Russia to Expand Bank Support

Russia plans to curb spending and assist banks to shore up its economy.

Bank of Japan Must Take Prompt, Extraordinary Actions, Member Mizuno Says Bank of Japan board member Atsushi
Mizuno said the central bank should take “extraordinary”
actions to counter the recession, indicating it may consider
more steps after buying shares and corporate debt.

Bank of England May Cut Interest Rate Closer to Zero as Recession Deepens The Bank of England will probably
lower the benchmark interest rate closer to zero today as
officials resort to buying securities to revive the economy.

Trichet's Curse Becomes Blessing as Sticky Prices Justify Rate-Cut Delay European Central Bank President Jean-
Claude Trichet’s curse of a year ago may now be a blessing.

Productivity in U.S. Probably Rose Last Quarter Even as Recession Deepened U.S. companies, struggling to contain
escalating losses in the deepening recession, squeezed more
output from their remaining workers last quarter, economists
said before a government report today.

Japan Intervention Depends on Pace of Yen's Moves, Not Level, Gyohten Says Japan will refrain from selling the
yen, trading near a 13-year high against the dollar, unless the
currency’s appreciation gathers pace, a former Finance Ministry
official said.

New Zealand's Fourth-Quarter Jobless Rate Rises to Highest in Five Years New Zealand’s jobless rate rose to a
five-year high in the fourth quarter as a prolonged recession
prompted companies to cut production and fire workers.

Senate Adds Tax Credit for Homebuyers to Stimulus Bill as Final Vote Nears The U.S. Senate voted to cut taxes on
homebuyers and weaken “Buy American” provisions in an economic
stimulus package that tops $900 billion and could come to a vote
as soon as today.

U.K. Corporate Bankruptcies to Surge `Dramatically' This Year, KPMG Says As many as 5,000 U.K. companies may file
for bankruptcy this year as the economy worsens, according to a
report by accounting and insolvency firm KPMG.

Russia Fueling Ruble Tumble With Overnight Bank Loans, Alfa, UniCredit Say Russia’s central bank is exacerbating
the ruble’s 34 percent plunge since August, even as it struggles
to defend the exchange rate, by providing loans to banks that
speculate on the currency, say Alfa Bank and UniCredit SpA.

Morning Economic News - Tuesday February 3, 2009

2009-02-02T23:57:00.000-08:00

Commentary and Overnight Trading

Bad news Monday brought a down stock market (except the NASDAQ) and overnight trading looks to be adding to the losses with Dow Jones Industrial Average, S&P 500 and NASDAQ futures all trading down. There was actually some good news buried in the numbers themselves yesterday. The Purchasing Managers Index still shows manufacturing activity contracting, but at a slower pace than December and the same report showed inventories falling faster. Falling inventories mean a shorter time until at least some of those inventories will have to be replenished, so quicker depletion is a good sign for the economy. The Conference Board reported very bad news on online job ads with roughly a million less vacancies advertised in January compared to October. What they didn't put in the headline was that the January 2009 number was virtually identical to the January 2008, calling into question whether the big drop may be a flaw in their seasonal adjustment. Personal spending fell again, but real disposable personal income rose another 0.3% in December, bringing further relief to the 93% of consumers with jobs.

Asian markets are following a down Monday with a slightly down Tuesday. Oil has regained a little less than 1/3 of Monday's losses. The dollar is up against the yen and the pound, down against the euro and the Canadian dollar.

Monday's Economic Numbers

Construction Spending - December 2008

Monthly Change: Down 1.4%

Year-to-year Change: Down 3.6%

Help Wanted Online Data Series - January 2009

Monthly Change: Down 15% (Not seasonally adjusted)

Year-to-year Change: Down 0.3% (10,200 fewer job ads)

Manufacturing Report on Business - January 2009

Purchasing Managers Index (PMI): 35.6

50+ represents growing economic conditions

Monthly Change: Up 2.7

Personal Income and Outlays - December 2008

Personal Income: Down $25.3 billion

Monthly Change: Down 0.2%

Real Disposable Personal Income: Up 0.3%

What I'm Reading

Consumers Keep Recovery at Bay

U.S. manufacturing activity contracted at a slower rate
than expected, but steep declines in consumer spending suggest a
recovery in that sector is premature.

Australia Cuts Key Rate to 45-Year-Low 3.25% as Government Boosts Spending Australia’s central bank cut its
benchmark interest rate to the lowest level in 45 years and the
government announced it will spend a further A$42 billion ($27
billion) to ward off a recession.

Bank of Japan to Buy Shares in Companies Held by Banks to Shore Up Capital The Bank of Japan will buy 1 trillion
yen ($11.1 billion) of shares owned by financial institutions to
shore up their capital, which has been decimated by the global
stock-market rout.

Homeowners in U.S. Lost $3.3 Trillion in Property Value in 2008 Amid Slump The U.S. housing market lost $3.3
trillion in value last year and almost one in six owners with
mortgages owed more than their homes were worth as the economy
went into recession, Zillow.com said.

Pending U.S. Home Resales Probably Unchanged, Signaling Slump to Persist The number of Americans signing
contracts to buy previously owned homes was probably unchanged
in December, snapping a three-month drop, economists said
before a report today.

South Korea's Economy Will Shrink 4% in 2009 and Rebound in 2010, IMF Says The International Monetary Fund
expects South Korea’s economy will contract this year for the
first time since the Asian financial crisis a decade ago,
according to a statement from the nation’s finance ministry.

Rupee to Strengthen This Quarter on India Growth Outlook, DBS's Wee Says India’s rupee will strengthen this
quarter as growth outperforms most emerging markets and
foreigners resume purchases amid waning risk aversion, according
to DBS Group Holdings Ltd.

Asia Needs Global Economic Recovery for Region to Exit Slowdown, IMF Says Asian nations will need a recovery in
the global economy before the region can exit a slowdown as its
trade and financial linkages have increased with the rest of the
world, International Monetary Fund Managing Director Dominique
Strauss-Kahn said.

Japan's Wages Slide for Second Month as Companies Cut Costs Amid Losses Japan’s wages fell for a second month
in December as manufacturers slashed production and overtime pay
amid mounting losses.

Morning Economic News - February 2, 2009

2009-02-01T23:40:00.001-08:00

Commentary and Overnight Trading

The wait for Friday's employment report is likely to set the tone for the week in stock markets as bad expectations for this important report mute any positive news and give extra oomph to bad news. The pattern is showing up early with drops in Asian stock markets, US stock market futures and oil. The "flight to quality" pattern is holding again in currency markets with the dollar up against the euro, pound and Canadian dollar and down against what seems the stablest of the major currencies, the yen. [2:38 AM]

Friday's Economic News

Leading, Coincident Indicators down for Euro Zone, Mexico and Australia

The oil dependent Mexican economy took the biggest hit in November with
the Coincident Economic Index down 0.6% and the Leading Economic Index
dropping 4.5%. Of all the indicators in both indexes only one – stock
prices – improved.

What I'm Writing

Financial Roadmap: The Week Ahead February 2 to 6, 2009

This week will be a busy one with several labor market indicators, news
from the manufacturing sector including January auto sales, pending
home sales data and consumption spending. The week opens and closes
with indicators from the important areas of employment and the consumer
sector.

Low rates could cut payment time in half

At the current rates an 8.5% 30-year mortgage could be refinanced into
a 15-year mortgage at roughly the same payment – reason enough to
refinance for anyone with 3 to 5 years on a subprime loan who can
qualify now for prime rates.

What I'm Reading

Summers Carves Out Powerful Role

Obama's chief economic adviser is raising the clout of the
National Economic Council -- and the chance of internal conflict in the
administration.

How Bad? Jobs Data Offer a Clue

The first employment report for 2009, which comes out Friday, is going to be bad. The question is: How bad?

Obama Will Require Banks to Expand Lending as Condition of Government Aid President Barack Obama will require
banks to boost lending to consumers and companies in return for
taxpayer aid from the $700 billion bailout fund, in a departure
from Bush administration policy, a key lawmaker said.

Australian Investment Plans Shelved as Global Slump Hurts Mining Companies Planned investment in Australia
dropped for the first time in four years as mining companies
scaled back production because of the global economic slowdown,
Access Economics said.

Aso Risks Worsening Japan's Recession by Delaying Election He Might Lose Prime Minister Taro Aso risks
deepening Japan’s recession in order to delay an election he’s
likely to lose.

Indonesia Inflation Slows to 9-Month Low; May Allow Cut in Interest Rates Indonesia’s inflation slowed to a
nine-month low in January, giving the central bank room to cut
interest rates this week.

South Africa's Central Bank May Cut Benchmark Rate by Most in Five Years South Africa’s central bank may cut
its benchmark interest rate by 1 percentage point on Feb. 5, the
biggest reduction in more than five years, to stimulate an
economy heading toward a possible recession.

U.S. Manufacturing Probably Shrank at Fastest Since 1980 as Sales Slumped Manufacturing in the U.S. probably
shrank in January at the fastest pace in 28 years following a
collapse in sales that caused inventories to swell at the end of
2008, economists said before reports today.

Davos Dreams of Global Financial Cooperation Face Protectionist Resistance As world leaders in Davos called last
week for international cooperation to tackle the financial and
economic crisis, businessmen were complaining that the stress is
only aggravating national divides.

Thai Consumer Prices Fall for First Time in 9 Years; May Prompt Rate Cut Thailand’s consumer prices fell for
the first time in nine years in January, giving the central bank
room to cut interest rates this month.

South Korean Exports Plunge a Record 32.8%, Pointing to Deeper Asian Slump South Korea’s exports tumbled by a
record 32.8 percent in January, foreshadowing a deepening slump
in Asia’s export-driven economies.

Morning Economic News - January 28, 2009

2009-01-28T00:27:00.000-08:00

Commentary and Overnight Trading

The drop in the Consumer Confidence Index Tuesday is particularly bad on a couple of levels. Most obviously the level was already at historic lows, so the drop makes a bad situation worse. Secondly, the fact that the Expectations Index fell even more than the Present Situation Index calls into question the Obama administration's prime weapon in reviving the economy and one where the administration seemed to have strong ammunition - Hope.

The Federal Reserve's monetary policy arm, the Federal Open Market Committee, will release a statement tomorrow, but as I noted here the Fed's commitment to a zero rate policy leaves little room for the statement to really say much. Or, as a Bloomberg article today puts it:

Fed's Shift to Zero Rates Leaves Experts Blind, Complicates Bernanke Job Investors will have a tougher time
assessing Federal Reserve policy when officials today replace
interest rates with emergency credit programs as their main
tool for steering the economy.

Still stocks are looking up heading into Wednesday with the Nikkei closing up more than half a percent and US stock market futures up almost 2% [3:22 AM Eastern]. Oil markets have recovered half a percent of Tuesday's 9% drop. With nothing to indicate a demand rebound, a Goldman Sachs report indicating that oil is not ready to rise and another inventory report due out Wednesday, the 9% drop seems more sensible than the rebound. The dollar is up against the yen, down against the euro, pound and Canadian dollar, likely on contrarian profit taking.

Tuesday's Economic Numbers

Consumer Confidence Index - January 2009

Expectations Index: 43.0

Monthly Change: Down 1.2

Case-Shiller Housing Price Index - November 2008

Composite 20 Index: 154.59

Monthly Change: Down 2.2%

What I'm Reading

Home Prices Slide, Angst Rises

U.S. home prices in the 20 areas tracked by
S&P/Case-Shiller fell 18.2% in November from a year earlier.
Consumer confidence hit a new low.

Unemployment Rises in Every State

State unemployment rates increased across the country in
December, new data show, underscoring how the recession has spared few
industries or regions.

Australian Consumer Prices Decline Most in 11 Years Amid Looming Recession Australian consumer prices declined
by the most in 11 years last quarter, increasing scope for the
central bank to cut interest rates as evidence mounts the
economy is heading for its first recession since 1991.

Dudley Brings Crisis Experience to Job as New York Federal Reserve Chief William Dudley, named president of
the Federal Reserve Bank of New York today, kept up his stamina
during last year’s all-night talks on the financial crisis by
napping on the carpet of his office at the bank.

Japan Finance Ministry Cuts View of Regional Economy as Recession Deepens Japan’s Finance Ministry lowered its
assessment of the regional economy for a fourth straight quarter
as companies cut production in the wake of a collapse in exports.

South Korean Consumer Confidence Rises From 10-Year Low on Stimulus, Rates South Korea’s consumer confidence
rose in January from a 10-year low on optimism interest-rate
cuts and the government’s 51 trillion won ($37 billion) stimulus
may help to revive the economy.

Morning Economic News - January 27, 2009

2009-01-26T22:03:00.000-08:00

Commentary and Overnight Trading

While investors were understandably excited over the double upside surprise Monday - actual increases in both the Existing Home Sales Index and the Leading Index - there are a few notes of caution appropriate going into Tuesday. First, the big housing indicator due out Tuesday is the Case-Shiller Price Index, which is very unlikely to post an upward surprise. The Existing Home Sales report showed a fairly sizeably month-to-month drop in home prices and the Case-Shiller index, which focuses on the most overheated big metro markets has performed worse on prices than the existing home sales report for several months. It's doubtful that the trend is going to reverse right now. Second, that increase in the Leading Index was driven heavily by Federal Reserve actions which boosted two components of the index directly, the money supply and the interest rate spread. There was very little evidence that those actions had bled through to affect other leading indicators and no indication that there were any current effects, as the Coincident Index fell 0.5%.

On the other hand, the Existing Home Sales report is usually considered a lagging indicator. In normal times, this would mean that existing home sales would not start to rise until after the general economy was beginning to recover. Because this recession is driven so heavily by the housing market, that probably doesn't apply completely, but it is still reason to consider the good news especially good.

Oil markets seem to be liking the news, with the futures price north of $46 in spite of the dollar rising against the yen and the Canadian dollar. The dollar had risen against the pound and euro earlier, but is currently down a quarter to half percent against those currencies. [1:02 AM Eastern] Japan's Nikkei index is up more than 5.5% with an hour and a half left to the close. US stock market futures are up more than 1% for the three major indexes.

Monday's Economic Numbers

Existing Home Sales - December 2008

Total Existing Home Sales Annual Rate: 4.74 million units

Monthly Change: Up 6.5%

Leading Index - December 2008

Leading Index: Up 0.3%

Coincident Index: Down 0.5%

Lagging Index: Down 0.4%

What I'm Reading

Goldman Sachs: Economy Looks Bad for 2010. Sorry, Democrats.

Big Mideast Funds Scale Back

Sovereign wealth funds, among the stars of last year's World Economic Forum, are a lot more skittish this time around.

U.S. Retail Sales Are Expected to Drop

U.S. retail sales are forecast to decline 0.5% this year as
consumers continue to pull back, according to the National Retail
Federation.

Fed Move Into `Uncharted Waters' Spurs Pressure to Overhaul Its Forecasts Federal Reserve officials are
considering an overhaul of their economic forecasting, aiming to
make clear their objectives for growth and inflation in the aftermath of the longest recession since the 1930s.

Bank of Japan Focusing on Easing Corporate Borrowing Costs, Minutes Show Bank of Japan policy board members
said they should focus on lowering longer-term borrowing costs
for companies after cutting the overnight rate to 0.l percent in
December, meeting minutes show.

Subbarao May Keep Indian Interest Rates on Hold After Cutting to Record India's central bank Governor Duvvuri
Subbarao may keep interest rates unchanged today after lowering
them to a record this month.

Australian Business Confidence Rises From Record Low on Stimulus Measures Australian business confidence rose
in December from a record low as a government stimulus package
and the most aggressive interest-rate cuts since the last
recession in 1991 buoyed consumer spending.

Germany's Business Confidence May Drop to 26-Year Low as Recession Deepens German business confidence probably
fell to the lowest level in more than 26 years in January as the
global recession damped exports, prompting companies to curb
production and cut jobs.

Philippine Imports Fell Most in 10 Years in November Amid Slowing Demand Philippine imports fell the most in
10 years in November as manufacturers reduced purchases amid
slowing demand at home and abroad.

Morning Economic News - January 26, 2009

2009-01-25T23:46:00.000-08:00

Commentary and Overnight Trading

The Nikkei dropped less than 1% Monday, while US stock market futures are also down less than 1%, pushing Dow Jones Industrial futures below the 8,000 mark. Oil futures are down nearly 2%, but still above $45. The dollar is up against the Canadian dollar, euro and pound, down slightly against the yen.

With bad news expected Monday on the existing home sales front and from the Leading Index, an upside surprise, even in the form of a smaller than expected drop, has the potential to fuel a rebound from a weak couple of weeks. A reboudn would be especially good news because the S&P is down about 70 points for the month and since 1979 the S&P has followed the January trend for the entire year 32 of 39 times.

What I'm Writing

Financial Roadmap: The Week Ahead January 26 to 30, 2009

The Durable Goods Orders report Thursday from the Commerce Department
may be the most important figure we see this week. A drop is expected
but reports and rumors are that many consumers after more than a year
of cutbacks in personal spending and businesses which have been
pinching pennies for over a year are reaching the point where
replacement of aging durables is no longer optional. With the other
bits of good news for consumers – lower interest rates finally
trickling through in some cases, lower costs of energy and food – pent
up demand for durable goods could lead the way out of this economic
downturn. The main question is «When?»

What I'm Reading

GM to Invest TARP Dough in Brazil

World's Elite Visit Davos in Doubt

Business and political leaders in Davos will meet as the
IMF Wednesday is to cut its global-growth forecast to below 1% for the
year.

Reports to Reveal Shoppers' Cutbacks

A slew of earnings reports from consumer-staples makers will show just how much consumers have cut back.

Gap, H&M's Cambodian Garment Suppliers Keep Tax Breaks to Combat Recession Cambodia, reliant on overseas aid to
finance a quarter of the national budget, said it will extend
tax breaks for clothing manufacturers and invest in power plants
as a cash shortage restricts its ability to provide economic
stimulus.

Economy in U.S. Probably Contracted Most Since 1982 as Spending Collapsed The worst credit crisis since the
Great Depression sent the U.S. economy into a tailspin at the end
of 2008 as consumers and businesses retrenched, reports this week
may show.

Japan Government-Owned Lender May Take Stakes in Non-Financial Companies A Japanese state-owned bank may take
stakes in non-financial companies to help them weather the global
recession, people familiar with the plan said.

South African Inflation Probably Slowed, Making Room for Interest-Rate Cut South African inflation probably
slowed for the fourth consecutive month in December, adding to
pressure on the central bank to accelerate interest rates cuts.

Bank of Israel Will Probably Cut Key Rate Half a Point to a Record 1.25% The Bank of Israel will probably
lower its benchmark lending rate tomorrow to a record as
Governor Stanley Fischer seeks to shore up flagging economic
growth, a survey showed.

U.K. Economy Shrinks 1.5 Percent in the Fourth Quarter: Table of the Day Following are the preliminary GDP growth estimates
for the fourth quarter from the Office for National Statistics in London:

Morning Economic News - January 23, 2009

2009-01-22T23:45:00.000-08:00

Commentary and Overnight Trading

The Nikkei dropped more than 3% Friday and the S&P/ASX200 has dropped more than 4% on bad news from the Australian mining sector. The Hang Seng was down 3% earlier, but is near even now [2:44 AM Eastern]. US stock market futures are down a little less than 1%. Oil prices have dropped but remain well above $42/barrel. The dollar is up strongly against the euro and pound, up a bit against the loonie and down slighlty against the yen.

Thursday's Economic News

Housing Starts - December 2008

Housing Starts: 550,000

Monthly Change: Down 15.5%

Year-to-year Change: Down 45%

1-Family Monthly Change: Down 13.5%

Jobless Claims - January 22, 2009

Initial Claims: 589,000

Change from Last Week: Up 62,000

Money Supply - January 22, 2009

M1 Seasonally Adjusted Prior Month: $1595.8 billion

M1 Annual Change (Unadjusted): $238.3 billion

Weekly Mortgage Applications Survey - January 22, 2009

Purchase Index: 303.1

Change: Up 2.5%

German economy took big hit in November

The Leading Index for Germany fell 2.2% in November and the Coincident
Index fell 0.5%, according to a Conference Board report released
Thursday. Only three of the eleven indicators included in the indexes
improved.

What I'm Writing

Markets shrug off another big oil inventory gain

The weekly oil report from the US Energy Department showed a big
increase in total commercial petroleum stocks, including increases in
crude oil and all the major refined products except propane, which is
used heavily for heating in the rural Midwest which just experienced a
cold snap. Other tidbits from the report included a substantial drop in
refinery activity and continued drops year-to-year in gasoline
consumption despite a price drop of 39% from this time last year.

New purchase applications up despite rate increase, trouble in refinances

Despite the increase in rates, the Mortgage Bankers Association reported a 2.5% increase in purchase mortgage applications.

The Banker's Depression

Meanwhile, bankers are just sitting on a pile of new money - the
Federal Reserve has printed and put in bank reserves $238 billion new
dollars in the last 12 months. That's a massive 15% increase in the
monetary base (M1 for the technically minded). But bankers aren't
lending it.

What I'm Reading

Microsoft Job Cuts: Layoffs Good News for Economy

I would bet that these job cuts are going to force a lot of people to
find their inner-entrepreneur. These ex-Microsofties are going to end
up starting a lot of small businsees that may eventually grow in size
to become some pretty profitable companies. Who knows, Microsoft may
inadvertently be creating another Gooogle or Apple or, yes, Microsoft.
Creative destruction, gang

Tough GOPers Stand Up to Geithner; All GOPers Should Counter Keynesian Stimulus

Right now capital is on strike. So are investors. Supply-side incentives will bring them back. This is where the GOP must go.

Fed Likely to Focus on Rates, Loans

Fed officials are likely next week to keep their approach for handling the financial crisis, despite internal divisions.

Housing Starts in U.S. Tumble 16% to Lowest on Record as Credit Dries Up Home prices in the U.S. dropped the
most in at least 18 years and builders broke ground on the
fewest houses since record-keeping began as the recession
deepened, government reports said today.

Australia May Cut Interest Rate Below 2% Amid Deep Recession, Fraser Says Australia’s central bank may more
than halve its benchmark interest rate as the nation enters a
long and deep recession, former Governor Bernie Fraser said.

China's Slowdown to Deepen as Recession Pummels Exports, Asian Suppliers China’s economic slowdown, already
the deepest in seven years, is set to worsen as the global
recession pummels its exports, darkening the outlook for
suppliers from Australia to Taiwan.

Geithner Warning on Yuan May Trigger Renewed U.S.-China Economic Tensions Timothy Geithner’s warning that
President Barack Obama believes China is “manipulating” its
currency may trigger renewed tensions between two of the world’s
three biggest economies.

JPMorgan Forecasts Larger Australian Rate Cut Next Month Amid Global Slump JPMorgan Chase & Co. forecasts the
Australian central bank will cut its benchmark interest rate by
1 percentage point next month, double its previous prediction,
amid a deepening slump in the nation’s major export markets.

Singapore Lowers Corporate Tax, Spends Record Amount Amid Worst Recession Singapore cut corporate taxes for
the second time in three years and said it will tap its reserves
to fund record spending amid efforts to drag the island’s
economy out of its deepest recession since independence.

Roubini Says China Is in Recession Despite `Massaged' Economic Growth Data China is in a recession despite
government statistics today showing the world’s third-largest
economy expanded in the fourth quarter from a year earlier,
according to Nouriel Roubini, the New York University professor
who predicted last year’s economic crisis.

Mining Boom Turns to Bust in Western Australia, Raising Risk of Recession Michael Smith moved 2,500 miles
across Australia in July to earn A$120,000 ($80,000) as a
blaster. Now the 30-year-old explosives expert is a motorcycle
courier making half his former wage.

Morning Economic News - January 22, 2009

2009-01-21T23:32:00.000-08:00

Commentary and Overnight Trading

Wednesday's big economic news release was a study in how the TARP went wrong. Home builder sentiment is down again, hitting another record low. And who can blame them? They're being hit by a triple whammy, all engineered by the people who run the banks. Perhaps the bankers' massive string of errors was not purposeful and knowing, but it certainly wasn't mere happenstance either. The housing market was run to overheating by profligate lending. Builders, whose business is building houses not reading financial tea leaves, invested in building more homes since they were selling like hotcakes and profit margins were high. Then the bankers got skittish and stopped making these bad loans to consumers. Well enough. Solid builders could have weathered that storm with more creative financing, incentives, slimming down those high profit margins and just taking occasional losses where needed. But then the banks added insult to injury with the third whammy - they stopped rolling over the builders loans and began to foreclose on newly built homes, competing against the builders who often still owed them money on other loans. It's easy to feel sorry for the builders, but damn hard to feel sorry for the bankers. Thursday may bring better news on housing, in the weekly mortgage report.

US stock futures are up a fraction of a percent in overnight trading and Asian stock markets are up 1 to 2%. Oil futures have managed to add another 9/100 of a percent, a small number but a big achievement on top of Wednesday's 9% rise in the spot price and pretty speculative with the US oil inventories due out Thursday morning. The dollar is in a familiar pattern, outperforming the battered euro and pound, losing against the yen and up, despite the oil price rise, against the loonie. [2:30 AM Eastern]

Economic News

Housing Market Index - January 2009

Current Month Index: 8

Monthly Change: Down 1

Current 1-Family Sales Index: 6

Monthly Change: down 2

State Street Investor Confidence Index - January 2009

Global Index: 60.3

Monthly Change: Up 12.1

Year-to-year Change: Down 9.2

French Leading Index down over 1%

The Conference Board reported another round of bad news for the French
economy Wednesday, with a 1.4% drop in the Leading Economic Index for
France and a 0.2% decline in the Coincident Index. The weakness was
widespread with only 3 of the 11 indicators in the two indexes
improving.

What I'm Reading

Should Obama Help Banks or Homeowners?

From Andy Busch of BMO Capital Markets:

The disease remains housing and home prices.This is why I expect new
TARP money to flow towards the housing market and to reduce the supply
of foreclosures. Here's an idea: why not declare that as of January
1st 2009, all homes in foreclosure will be purchased by TARP? This
attacks the supply or inventory problem forcing prices down. It would
take away a major negative driver of bank assets. Yes, but it still
means the government has to do something with those homes.

The best solution would be to follow the RTC model by
putting the properties together and then holding a fire sale to clear
the market. The government would take the loss between what they pay
for the homes and what they sell them for to the market.It's this loss
that no one wants to take or absorb. While the US taxpayer is on the
hook for it, this solution attacks the central problem. More
importantly unlike an acronym or a "bad bank", it will stabilize home
prices. Taxpayers can live with nationalizing or socializing home
owner losses from the real estate market much easier than they can live
with taxpayer losses from the banking industry. Let's see which
political party picks up on this first ...

Politics Seen in Bank Bailout Decisions

As Obama's team revises TARP, it faces dissatisfaction with
the program's implementation. Some politicians, including Barney Frank,
have used leverage to seek funds for their home-state banks.

U.K. Pound Serves as Omen for Dollar

As the British pound continues to sink, its travails are a cautionary tale for the U.S. dollar.

China GDP Confirms Slowdown

China said its economy expanded 6.8% in the fourth quarter
of 2008 from a year earlier, confirming a slowdown that has cut growth
nearly in half in just a year.

China's Economy Grew 6.8% in Fourth Quarter, Slowest Pace in Seven Years China’s economy expanded at the
slowest pace in seven years as the global recession dragged down
exports, increasing pressure for more government spending and
lower interest rates to buoy growth.

South Korea's Economy Contracts More-Than-Expected 5.6% as Exports Plunge South Korea’s economy shrank a
larger-than-expected 5.6 percent last quarter, the biggest
decline since the Asian financial crisis a decade ago as exports,
business investment and consumer spending plunged.

Japan's Exports Plunge Record 35%, Signaling More Cuts in Jobs, Production Japan’s exports plunged by a record
in December, signaling companies will be forced to shut factory
lines and fire more workers, driving the economy deeper into
recession.

Bank of Japan to Consider Buying Corporate Bonds; Keeps Key Rate at 0.1% The Bank of Japan said it will
consider buying corporate bonds to prevent a shortage of credit
from worsening a recession it predicted will deepen next year.

Japanese Corporate Loan Demand Rises to Record as Recession Dries Up Funds Demand for loans among Japanese
companies surged to a record this month as falling profits and
stagnating credit markets left businesses with less cash to
operate, a central bank survey showed.

Singapore's Government May Unveil Record Budget, Tap `Rainy Day' Reserves Singapore, suffering its deepest
recession since independence, will probably announce record
spending in its budget today to help companies hurt by the
global slowdown and preserve jobs.

Vietnamese Trade Deficit Narrowed In January, Easing Currency Concerns Vietnam’s trade deficit narrowed for
the first time in more than two years, as a global recession
slashed demand for its goods as well as restricting the nation’s
appetite for products from overseas.

Morning Economic News - January 20, 2009

2009-01-19T22:16:00.001-08:00

Commentary and Overnight Trading

The opening bell of the New York Stock Exchange will be rung at Federal Hall, the site of the first Presidential inauguration, in celebration of the inauguration of President-elect Barack Obama and likely kicking off a losing morning session. US stock market futures are down 1.6% from Friday's close and Asian markets are down 2 to 3% Tuesday [1:10 AM Eastern]. Oil is down more than $2 since Friday and nearing the $34 mark. The dollar is up against the euro, pound and Canadian dollar, down against the Japanese yen.

What I'm Writing

Financial Roadmap: The Week Ahead January 19 to 23, 2009

The three major indicators this week are split between confidence readings and housing markets with one focused on both.

What I'm Reading

Korean Fund Ponders Selling U.S. Treasurys

South Korea's national pension fund said it may sell U.S. Treasurys because
of the prospect that they'll become less profitable and stoke inflation.

Treasury Demands Banks Provide Lending Data as U.S. Tries to Revive Credit The U.S. Treasury, under pressure to
revive lending, is demanding monthly reports from the banks that
received the most capital from the government's $700 billion
rescue program.

Brown Tightens Grip on Financial System, Hands BOE Power to Buy Securities Prime Minister Gordon Brown’s
government tightened its grip on Britain’s financial system,
guaranteeing toxic assets and giving the Bank of England
unprecedented power to buy securities.

Japan's Consumer Sentiment Tumbles to Record Low as Job Prospects Dwindle Japan’s consumers became the most
pessimistic in at least 26 years, indicating households are
likely to keep cutting back as the recession deepens.

China Faces Worst Unemployment in Decades as Economy Cools, Exports Slump China’s official urban unemployment
rate jumped for the first time since 2003 and may climb to an
almost 30-year high as exports slump and a slowdown deepens in
the world’s third-biggest economy.

Trichet Says Economy Will Be `Substantially' Worse Than Forecast This Year European Central Bank President Jean-
Claude Trichet said the outlook for the euro-region economy is
“substantially” worse than the bank predicted a month ago.

Europe's Economy to Shrink for First Time Since Euro Introduction, EU Says The euro-area economy will contract
this year for the first time since the currency was introduced a
decade ago, the European Commission forecast, cutting its outlook
for the region amid the worst financial crisis since World War II.

Premier Key Says New Zealand Is Ready to Bail Out Its Important Companies New Zealand’s government is ready to
lend to any strategically important company that was unable to
borrow directly amid a global credit freeze, Prime Minister John
Key said today.

European Finance Officials Defend Budget Discipline Even as Deficits Soar European finance officials defended
the credibility of their budget rules even as they ramp up
deficit spending to fight the worst recession since World War II.

Morning Economic News - January 16, 2009

2009-01-15T23:37:00.000-08:00

Unfortunately due to technical problems I can't do my usual complete roundup of yesterday's economic news for a second day, but with the big news that came out about 2 hours ago, I am going to write a brief post today. Regular reports will resume Monday the 19th.

About 11 PM the Treasury Department, FDIC and Federal Reserve announced an aid package for the Bank of America. Specifically, the agencies are providing "protection against the possibility of unusually large losses on an asset pool of approximately $118 billion of loans". These loans have already been written down to their current, discounted market value. The bank has to meet some fairly stringent conditions including "enhanced executive compensation restrictions" and a "mortgage loan modification program". Treasury also announced that it's extending its Temporary Liquidity Guarantee Program up to 10 years for banks that do new consumer lending.

Major points:

1 - This is a big commitment, but should ultimately free up a lot of capital for new lending, a multiple of the amount involved.

2 - It addresses two of the biggest complaints about the string of financial bailouts - spendthrift executives getting big bonuses at taxpayer expense for driving their companies into the ground and banks accepting bailout funds and continuing not to lend.

3 - The B of A package addresses mortgage modification to attack the problem loans from the bottom as well as the top.

4 - This has been coming for a while and markets had it priced in over the last week.

Markets seem to be responding well to the news, with US stock market futures up just under 1% [2:50 AM Eastern]. The dollar is down against the euro, Canadian dollar and pound, but up against the yen - a reversal of the pattern that's been "normal" the last couple of weeks and may simply represent profit taking. The Nikkei closed up 2.58% and the Hang Seng is down a fraction of a percent. Oil is up less than half a percent.

Treasury press release follows:

anuary 16, 2009
HP-1356

Treasury, Federal Reserve and the FDIC Provide Assistance to Bank of America

Washington, DC – The U.S. government entered into an agreement today with Bank of America to provide a package of guarantees, liquidity access and capital as part of its commitment to support financial market stability.

Treasury and the Federal Deposit Insurance Corporation will provide protection against the possibility of unusually large losses on an asset pool of approximately $118 billion of loans, securities backed by residential and commercial real estate loans, and other such assets, all of which have been marked to current market value. The large majority of these assets were assumed by Bank of America as a result of its acquisition of Merrill Lynch. The assets will remain on Bank of America's balance sheet. As a fee for this arrangement, Bank of America will issue preferred shares to the Treasury and FDIC. In addition and if necessary, the Federal Reserve stands ready to backstop residual risk in the asset pool through a non-recourse loan.

In addition, Treasury will invest $20 billion in Bank of America from the Troubled Assets Relief Program in exchange for preferred stock with an 8 percent dividend to the Treasury. Bank of America will comply with enhanced executive compensation restrictions and implement a mortgage loan modification program.

Treasury exercised this funding authority under the Emergency Economic Stabilization Act's Troubled Asset Relief Program (TARP). The investment was made under the Targeted Investment Program. The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings, and retirement security.

Separately, the FDIC board announced that it will soon propose rule changes to its Temporary Liquidity Guarantee Program to extend the maturity of the guarantee from three to up to 10 years where the debt is supported by collateral and the issuance supports new consumer lending.

With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy. As was stated in November when the first transaction under the Targeted Investment Program was announced, the U.S. government will continue to use all of our resources to preserve the strength of our banking institutions and promote the process of repair and recovery and to manage risks.

Morning Economic News - January 14, 2009

2009-01-14T00:32:00.000-08:00

Commentary and Overnight Trading

Asian stock markets rose slightly Wednesday, with the Nikkei up 0.29% and the Hang Seng up 0.26% at time of writing [3:28 AM Eastern] and US stock market futures are up a few points. Oil is up 3%, but still holding below $40/barrel. In a reversal of the recent pattern, the dollar is down against the Canadian dollar, euro and pound, but up against the yen.

Economic Indicators

Federal Budget - December 2008

Year-to-date: $485,198 million deficit

Prior Year-to-date: $106,815 million deficit

International Trade - November 2008

Trade Deficit: $40.4 billion

Monthly Change: Down $16.7 billion

UK Leading Index down 1%

The UK capped off a full 12 months of declines in its leading economic
indicators with a 1% drop in November, according to the Conference
Board. The Coincident Index was unchanged, with 3 of the 4 coincident
indicators actually improving.

Korean economy tanking

The Conference Board reported widespread weakness in the Korean economy
with a headline drop of 3.5% in the Leading Index. Of 11 economic
indicators tracked in the Leading and Coincident Indexes for Korea, 10
declined in November.

What I'm Reading

Global Trade Posts Sharp Decline

Foreign trade fell 18% for the U.S. from July to November,
part of a global trend that makes the world-wide slump harder to fight.

Feds: Ailing Banks Need More U.S. Funds

As Obama lobbied Senate Democrats for the remaining
financial-rescue funds, Bernanke argued for a new effort to help banks
get bad loans off their balance sheets.

Fed Seeks New Effort to Cleanse U.S. Banks as Toxic Assets Retard Lending The Federal Reserve’s top two
officials urged a new effort to address the toxic assets held by
financial companies, warning that they threaten to prevent banks
from resuming lending to households and companies.

Thai Central Bank Cuts Benchmark Rate More Than Forecast to 2% From 2.75% Thailand’s central bank cut its
benchmark interest rate more than economists expected for a
second month after inflation cooled to the slowest pace in six
years and political protests sent confidence to a record low.

U.K. to Guarantee $29 Billion of Loans to Companies to Keep Credit Flowing Business Secretary Peter Mandelson
said the U.K. government will guarantee as much as 20 billion
pounds ($29 billion) of bank loans to medium-sized companies in
order to keep credit flowing during the recession.

Asia's Interest-Rate Cuts, Spending May Propel Recovery, Economists Say Asia’s interest-rate reductions and
fiscal stimulus packages unveiled in recent months may help
propel a recovery in demand and economic activity later this
year, economists said.

China Overtook Germany as World's Third-Biggest Economy in 2007, Data Show China’s economy overtook Germany’s
in 2007 to become the world’s third largest, underscoring the
nation’s increasing economic and political clout.

Fed May Look for International Credentials in Seeking Geithner Replacement The candidates for president of the
New York Federal Reserve Bank include several with international
experience, indicating officials may be seeking a new leader in
the mold of departing chief Timothy Geithner.

U.S. Retail Sales May Have Dropped for Record Sixth Month as Jobs Vanished Sales at U.S. retailers probably fell
in December for a sixth consecutive month as rising unemployment
caused consumers to retrench, economists said before a report
today.

South Korean Employment Falls for First Time Since 2003 as Economy Slumps The number of South Koreans with
jobs fell in December for the first time since October 2003, the
latest sign the economy may be sinking into a recession as
exports plunge and domestic demand falters.

Oil Collapse Forces Gulf Nations to Run Deficits, Cut Foreign Investment Tumbling oil prices are forcing
many of the richest Persian Gulf states to record budget
deficits and limit a critical source of foreign investment for
poorer Arab countries.

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Morning Economic News - January 13, 2009

2009-01-13T00:49:00.001-08:00

Commentary and Overnight Trading

The Conference Board's Monday report on employment was, as expected, decidedly negative. The reports news release headline predicted 2 million additional lost jobs and the reports headline index number showed employment trends below 1996 levels. Less reported, the employment trend is still not the worst situation in the last 40 years, let alone the "worst since World War II" or "since the Great Depression" as is being widely touted. Markets clearly had the bad job picture priced in and in perspective, with a 1.5% retreat in the Dow Jones Industrial Average, hardly a rout.

In early overnight trading, US stocks are little changed with the S&P and NASDAQ, which fell more on Monday, up slightly and the DJIA down a handful of points. The Nikkei isn't faring as well, down nearly 5%. Oil is down 3%, with another $6 to fall if Goldman Sachs prediction of $30 oil is going to happen. The dollar is up against the Canadian dollar, euro and pound, but continues to deteroriate against the yen.

Economic Indicators

Employment Trends Index - December 2008

Monthly Change: Down 1.6%

Year-to-year Change: Down 16%

What I'm Reading

U.S. Seeks the Rest Of Bailout Cash

Bush requested the second half of the financial-rescue
funds on behalf of Obama. Senate Republicans, including Tom Coburn, are
expected to be a tough sell.

Obama Reconsiders Proposed Tax Credit for Hiring

Obama's proposed new-hiring tax credit is likely to be scaled back or scrapped in favor of renewable-energy tax breaks.

China's Exports Fall by Most Since 1999 as Global Recession Reduces Demand China’s exports fell the most in
almost a decade in December as the deepening global recession
cut demand for the nation’s toys, clothes and electronics.

Merkel's Coalition Forges Second, $66 Billion Stimulus Package for Germany German Chancellor Angela Merkel’s
coalition agreed to spend an additional 50 billion euros ($66
billion) this year and next, its second attempt to stem the
worst recession since World War II in Europe’s largest economy.

Economy May Shrink 1.5% in 2009 as `Very Deep' U.S. Recession Stymies Fed Economists slashed forecasts for
U.S. growth in 2009 and projected Federal Reserve policy makers
won’t be able to start raising interest rates until 2010,
according to a monthly Bloomberg News survey.

Japan's Current-Account Surplus Narrowed 66% in November as Exports Slump Japan’s current-account surplus
narrowed for a ninth month in November as exports slumped by a
record in the wake of the global recession.

Finnish Economy Shrank 1.6% in October on Crisis for First Drop Since 2005 Finland’s economy contracted for the
first time in three and a half years in October on waning global
demand for Finnish goods.

New Zealand Foreign Currency Credit Rating May Be Cut on Deficit, S&P Says New Zealand’s AA+ foreign-currency
credit rating may be cut if the nation’s current account deficit
and overseas debt begin to curb growth and investment, Standard
& Poor’s said.

U.K. Economy Slumps Most Since 1989 as Home Sales Drop, Lobby Groups Say The British economy slumped the most
in at least two decades during the fourth quarter and home sales
dropped to the lowest since the measure began in 1978 as the
recession deepened, reports by lobby groups showed.

Trade Deficit in U.S. Probably Shrank to Four-Year Low as Oil Prices Fell The U.S. trade deficit probably
shrank in November to the lowest level in more than four years
as oil prices plunged, economists said before a report today.

Goldman Forecasts South Korea's First Recession in a Decade on Export Drop Goldman Sachs Group Inc. forecasts
South Korea’s economy will shrink this year, reversing a
previous prediction for growth because of a slump in exports.

Philippine Exports Fall a Second Straight Month as Electronics Sales Drop Philippine exports fell for a second
consecutive month in November as the global recession damped
demand for disk drives and mobile-phone chips made by Intel Corp.
and other manufacturers in the country.

Morning Economic News - January 12, 2009

2009-01-12T00:07:00.001-08:00

Commentary and Overnight Trading

Asian stocks are trading down and US stock market futures are down slightly heading into Monday morning. Crude oil futures headed back below the $40 mark as the dollar rose against the euro, pound and Canadian dollar. The dollar is down against the yen. [3 AM Eastern] There is no expected news to drive this session, so watch for any breaking political or corporate news to move the markets today.

Economic Indicator Reports

Employment Situation - December 2008

Total Employment: 143,338 million

Nonfarm Payroll Employment: 135,489 million

Monthly Change: Down 524,000

Wholesale Trade - November 2008

Wholesale Sales: $349.2 billion

Monthly Change: Down 7.1%

Year-to-year Change: Down 7.6%

What I'm Writing Elsewhere

Financial Roadmap: The Week Ahead January 12 to 16, 2009

Unless we see a lot of surprises, this week is likely to be a mildly
down one in terms of economic news. That's not likely to translate into
any big downward moves in the the market which is in a sideways pattern
at the moment. Negative surprises certainly could yield some downside
and positive surprises could boost things, but moves are likely to be
temporary and muted by the mood in this last week before a new economic
team takes over in D.C.

What I'm Reading

Obama Team in Talks to Tap TARP

The incoming Obama administration is negotiating with
lawmakers to avoid a messy political fight as it seeks the second half
of the $700 billion bailout.

Protectionist Wave May Deepen Crisis

A wave of protectionism is swelling around the world that could further damage struggling economies.

Strauss-Kahn Says IMF May Need Another $150 Billion to Help Fight Crisis The International Monetary Fund may
need another $150 billion to help counter the hit to emerging
markets and poorer countries from a worsening global economic
downturn, Managing Director Dominique Strauss-Kahn said.

Trichet Shoved Toward Zero-Interest-Rate World as European Economy Worsens The sliding European economy is
propelling European Central Bank President Jean-Claude Trichet
toward the zero-interest-rate world he sought to avoid.

China to Tolerate Increase in Bad Debt, Ease Loan Rules to Support Economy China will tolerate an increase in
bad debt this year as it eases rules governing bank lending to
revive the slowing economy, the nation’s banking regulator said.

India Industrial Output Gains 2.4%, Rebounding From First Drop in 15 Years India’s industrial production
unexpectedly rose in November, after declining in the previous
month for the first time in 15 years amid a global recession.

Brown Pledges $758 Million to Spur Hiring, Counter Higher U.K. Joblessness U.K. Prime Minister Gordon Brown
will today pledge 500 million pounds ($758 million) to encourage
hiring and counter rising unemployment amid the deepest
recession in almost three decades.

Aso, Lee Pledge Closer Economic Ties as Japan, South Korea Tackle Crisis Japanese Prime Minister Taro Aso
and South Korean President Lee Myung Bak pledged to work together
to overcome a worldwide recession that has slashed demand for
Asian exports.

Venezuela Begins Stealth Devaluation as Plunge in Oil Shrinks Dollar Sales Venezuelan President Hugo Chavez says
he won’t adjust the oil-exporting country’s pegged exchange rate
amid a plunge in prices for crude. Instead, seeking to maintain
his popularity, he may devalue the currency by sleight of hand.

U.K. Banks, Financial Firms May Cut 15,000 Jobs in First Quarter, CBI Says U.K. banks, insurers and financial-
services companies may cut as many as 15,000 jobs in the first
quarter to reduce costs amid a decline in business confidence,
the Confederation of British Industry said.

Capitalism Freezes in Winter of Discontent From China to Russia to Nigeria As capitalism staggers through its
first globalized economic crisis, the costs won’t be measured
only in dollars and cents.

Morning Economic News - January 9, 2009

2009-01-08T23:02:00.000-08:00

Commentary and Overnight Trading

As I noted yesterday, labor markets tend to lag the general economy while the stock market typically leads it. Dennis Gartman of The Gartman Letter goes a step further, pegging a spike in jobless claims as an indicator that a recession has reached its bottom:

looking back at the chart of weekly initial jobless claims
super-imposed upon the past forty years of economic advances and
recessions we note just how perfectly ‘spikes' in claims happen
precisely in the same quarter as the end of recessions. It is uncanny
how clear that is, for with the exception of the recession of '70 when
claims bottomed early in the recession, in all the rest the recessions'
ends and jobless claims spikes occurred in near perfect tandem.

Jobless claims spiked in December at over 500,000 initial weekly jobless claims and his since fallen back to 467,000. If the December spike did the trick, the 4th quarter could have marked the beginning of the recovery. (On the theory front, the reason job losses need to spike is that a recession is the economy wringing out the excesses of prior growth - overpriced stocks, marginal jobs, poorly managed companies that need to fail so their resources can be put to better use - labor market excesses tend to be the last to get wrung out.

US stock markets were little changed Thursday and US stock market futures are shaping up the same way in overnight trading, with Dow Jones Industrial Average futures down 2 points, S&P 500 up less than a point and NASDAQ 100 up 2 points. [1:59 AM Eastern] Asian markets are mixed and trading in a narrow range, oil is up just over 1%. The dollar is mixed, up against the Canadian dollar and euro, down against the yen and the pound,

Thursday's Economic News

Monster Employment Index - December 2008

Index: 131

Monthly Change: Down 12

Year-to-year Change: Down 38 Points

Money Supply - January 8, 2009

M1 Seasonally Adjusted November: $1522.5 bllion

M1 4-Week Average: $1596.6 billion

M1 Annual Change (Unadjusted): $157.5 billion

Jobless Claims - January 8, 2009

Initial Claims: 467,000

Change from Last Week: Down 24,000

Consumer Credit - November 2008

Total outstanding consumer credit: $2570.9 billion

Total (annuualized) rate of change: Down 3.7%

What I'm Reading

No Spike in Jobless Claims? Rats. (I argue that the spike could have already happened which would make this week's report is the calm after the storm.)

Wal-Mart, Others See Tough Months Ahead

Retailers led by Wal-Mart warned of lower sales and profits
in months to come as grim declines in December store sales emphasized
the toll the plunge in consumer spending is having on the economy.

U.S. Recession Stymies Mexico's Growth

Mexico's Finance Minister Agustín Carstens said the
country's economy isn't expected to grow at all in 2009 because of the
U.S. recession.

Bank of Korea Cuts Key Interest Rate to Record-Low 2.5% as Recession Looms The Bank of Korea cut its benchmark
interest rate by a half-point to a record low, saying the
economy is deteriorating faster than expected as domestic demand
and exports falter. Stocks fell.

U.S. Job-Market Collapse in 2008 Was Probably Biggest Since World War II The U.S. probably lost 525,000 jobs in
December, capping the biggest collapse in employment since the
end of World War II, economists said before a report today.

South Korea to Seek an Increase in $30 Billion U.S. Swap Deal, Shin Says South Korea will seek to increase the
size of its $30 billion currency swap agreement with the U.S.
Federal Reserve and extend its maturity, Deputy Finance Minister
Shin Je Yoon said.

Fed's Rosengren Calls for `Concerted Policy Actions' to Stimulate Lending The U.S. government needs to pursue
“concerted” fiscal and monetary policies to revive housing
finance, Federal Reserve Bank of Boston President Eric Rosengren
said.

China Exports Probably Fell Most in a Decade as Global Recession Deepened China’s exports probably fell the
most in a decade in December amid a deepening global recession,
making it more likely extra measures will be implemented to
stimulate growth.

Bank of England Cuts Benchmark Rate to 1.5%, Approaching Limits of Policy The Bank of England cut the benchmark
interest rate to the lowest since the central bank was founded
in 1694 as policy makers tried to prevent the credit squeeze
from deepening Britain’s recession.

Morning Economic News - January 8, 2009

2009-01-08T00:36:00.000-08:00

Commentary and Overnight Trading

The biggest news Wednesday were the indicators of serious job losses in December with the ADP Employment Report showing more than 600,000 jobs lost in the US and the Conference Board reporting a drop of more than 12% in online help wanted ads. A key for investors to remember is that labor markets are generally a lagging indicator. After the last recession, serious job gains didn't really kick in until just before this recession officially started.

There was a fairly serious bit of positive news yesterday that was largely unreported. The Mortgage Bankers Association's weekly survey of mortage applications showed a double digit increase in new applications for purchases. The headline from the report said "Mortgage Applications Decrease" because there was a big decline in refinance applications, but it's purchase mortgages not refinances that drive the housing market. Now generally housing is also a lagging indicator, but in this case it was bad problems in housing that set the negative economic ride in motion, so stabilization in the housing market is key to general recovery.

Signals in overnight trading point to early losses Thursday morning to add to Wednesday's 3% drop in US stocks. US stock market futures are down about half a percent, while Asian stock markets are down 2 to 4%. Oil is down 1%. The dollar is up against the Canadian dollar, euro and pound, down 1% against the yen. [3:27 AM Eastern]

Economic News

Federal Open Market Committee (FOMC) Minutes - December 15-16, 2008

For most major industry groups, factory utilization rates declined
relative to their levels in July and remained below their long-run
averages. Available forward-looking indicators pointed to a significant
downturn in manufacturing output in coming months.

Weekly Mortgage Applications Survey - January 7, 2009

Purchase Index: 344.2

Change: Up 7.3%

ADP Employment Report - December 2008

Total Nonfarm Private Employment: 113,160,000

Monthly Change: Down 693,000

Help Wanted Online Data Series - December 2008

Online Advertised Vacancies: 3,861,000

Monthly Change: Down 507,000 (Not seasonally adjusted)

Time to talk oil glut?

US petroleum inventories have become exceptionally strong over the last
couple of weeks, with big increases this week in crude oil and major
refined product categories. With crude oil inventories above the
average range for the season and the major refined products all at
least in the upper half of their average ranges in absolute terms and
well above average in days of supply, it's reasonable to talk about a
supply glut in the US.

What I'm Reading

Commercial Property Loses Shelter

Delinquencies on mortgages for hotels, shopping malls and office buildings were sharply higher in the fourth quarter.

Deficit Projected to Hit $1.2 Trillion

The U.S. budget deficit will widen to $1.186 trillion for
the current fiscal year, the CBO said. It's an unprecedented number
that will likely only get bigger after Obama's economic-recovery
package.

Shirakawa Says BOJ Still Has Tools to Support Economy With Rates Near Zero Bank of Japan Governor Masaaki
Shirakawa said his policy board still has tools to support the
economy after lowering the key interest rate to 0.1 percent last
month.

Bank of England May Cut Rate to Record Low, Approaching Limits of Policy The Bank of England will probably cut
the benchmark interest rate to the lowest ever today as
officials move closer to the limits of conventional monetary
policy to fight the recession.

Germany's Exports Plummet by Record 10.6% as Global Recession Hurts Demand Exports from Germany dropped by a
record in November as the global recession curbed demand for
goods made in Europe’s largest economy.

Australia's Declining Exports, Home Building May Prompt Interest-Rate Cut Australian home-building approvals
fell by the most since 2002 and exports dropped for the first
time in nine months, stoking speculation the central bank will
extend the biggest round of interest-rate cuts in 17 years.

Paulson to `Find Out' How His $500 Million Fared During Tenure at Treasury Treasury Secretary Henry Paulson, a
$500 million man when he entered office, said he’s about to
discover how much of his fortune remains after two years of
financial market turmoil.

Nomura Forecasts South Korean Recession After Earlier Predicting Expansion Nomura International Ltd. said South
Korea’s economy will contract this year, reversing its earlier
forecast of an expansion, as exports and domestic demand weaken.

Banks in U.S. Begin Offering Fixed Mortgages Below 5% After Fed Steps In The largest U.S. banks are starting to
offer fixed home loans below 5 percent after the government began
buying mortgage securities to bolster the housing market.

Buy Japan Government Bonds on Prolonged Economic Slump, Principal Advises Investors should buy Japanese
government bonds on speculation growth in the world’s second-
largest economy will remain “a lot lower for a lot longer,”
according to Principal Global Investors.

Two-Year Swap Spread Shows `Healing' of Credit Markets: Chart of the Day Interest-rate derivatives are
signaling credit markets are returning to levels not seen in a
year as the Federal Reserve keeps its target lending rate pinned
near zero to unfreeze lending.

Morning Economic News - December 31, 2008

2008-12-30T21:28:00.000-08:00

Commentary and Overnight Trading

The biggest news of the day is likely to get lost in the news of "record drops" and "record lows" in home prices and consumer confidence. The oil producing states of the Gulf region finalized an agreement to have a common currency and a common central bank by 2010. This is pretty significant news for the dollar, which is the currency of oil sales worldwide, by creating an alternative currency in the oil rich region. The pressure will grow greater the closer the monetary union gets to implementation.

The dollar is doing ok in early overnight trading, up a bit against the Canadian dollar, down less than a tenth percent against the yen and down just over two-tenths percent against the euro and pound. And the news doesn't seem to be doing much for oil prices either, as they're down 2% in overnight trading so far. US stock market futures are mixed, with movement in the 0.75 to 2 point (not percent, but point) range on all indexes. Asian markets are up. [12:25 AM Eastern]

Tuesday's Economic News

Case-Shiller Home Price Index - October 2008

Composite 20 Index: 158.16

Monthly Change: Down 2.2%

Consumer Confidence Index - December 2008

Consumer Confidence Index: 38

Monthly Change: Down 6.7

Record drop in home prices and consumer confidence at record low

S & P reported another big drop in its Case Shiller Home Price Index,
which covers the top 20 metropolitan areas in the US and the Conference
Board reported that US consumer confidence fell to a record low.

What I'm Reading

Home Prices Decline at Record Pace

A measure of October home prices dropped by the sharpest
annual rate on record. Separately, consumer confidence hit a new low in
December.

Saudi Arabia, Kuwait, Bahrain, Qatar, U.A.E., Oman Approve Monetary Union Gulf Arab leaders approved a monetary
union agreement that aims to create a central bank and single
currency for the region that will help boost trade and strengthen
monetary policy.

Consumer Confidence in U.S. Drops to Record Low as Unemployment Increases Consumer confidence sank to the
lowest level in at least 41 years this month as Americans grew
more concerned about keeping their jobs and paying their
mortgages, raising the risk they’ll spend less next year.

U.K. House Prices Were Most Affordable in Five Years in 2008, HBOS Says U.K. houses are now the most
affordable in more than five years, helping those looking to buy
a home for the first time, HBOS Plc said.

Vietnam's 2008 Economic Growth Slows to 6.2% as Building, Tourism Stumble Vietnam’s economy expanded at the
slowest pace since 1999 as higher interest rates and lending
restrictions earlier this year damped construction and a global
recession hurt tourism.

Indian Economy Succumbs to Global Recession After Surviving Terror Attacks India’s economic growth, unscathed by
terrorist attacks in Mumbai last month, is slowing as the global
recession cuts demand for its exports and cools investment.

Australian Retailers May Have Record Post-Christmas Sales, Group Predicts Australian retailers may have record
post-Christmas sales as lower borrowing costs and government
stimulus packages spur consumer demand, according to the
industry’s peak representative body.

Home Prices in 20 U.S. Cities Dropped 18% From Year Ago, Case-Shiller Says Home prices in 20 major U.S. cities
declined at the fastest rate on record, depressed by mounting
foreclosures and slumping sales.

`Original Sin' Returns to Emerging Markets Requiring Sales of Dollar Bonds Developing nations plan to sell the
most dollar-denominated bonds since 2005, reversing a shift into
local debt, as commodities prices fall, foreign reserves diminish
and emerging-market currencies weaken.

Morning Economic News - December 30, 2008

2008-12-30T01:39:00.000-08:00

Commentary and Overnight Trading

US stock market indexes are up just under 1% in overnight trading [4:30 AM Eastern] after the Treasury Department announced a $5 billion preferred stock investment in GMAC after the market close Monday. The Nikkei rose 1.28%, the S&P/ASX 200 rose 0.91% and the Hang Seng fell 0.65%, Oil futures are down 1.4% after the WTI spot price rose 24% Monday. The dollar has gained a half percent against the yen and the Canadian dollar and fallen against the euro and the pound.

Monday's Economic News

Money Supply - December 29, 2008

M1 Seasonally Adjusted Prior Month: $ 1522.6 billion

M1 Annual Change (Unadjusted): $157.6 billion

M2 Annual Change (Unadjusted): $570.3 billion

What I'm Reading

GMAC Gets $5 Billion Investment From Treasury to Help Revive Auto Lending The U.S. Treasury committed $6
billion to support GMAC LLC, the financing arm of General Motors
Corp., widening the government's effort to keep the largest U.S.
automaker out of bankruptcy.

European Retail Sales Drop for Seventh Straight Month as Recession Deepens European retail sales fell for a
seventh month in a row in December as the deepening recession
curbed consumer confidence and spending, the Bloomberg
purchasing managers’ index showed.

Japan Economy May Shrink 12% This Quarter, Most Since 1974, Barclays Says Japan's economy will probably shrink
at an annual 12.1 percent pace this quarter, the sharpest drop
since 1974, as exports collapse, Barclays Capital said.

U.S. Consumer Confidence Probably Rose in December on Lower Gasoline Price U.S. consumer confidence probably
improved in December for a second month as falling gasoline
prices helped ease the strain on tattered household finances,
economists said before a report today.

South Korean Factory Output Falls By Record, Manufacturers Sentiment Drops South Korea’s factory production
fell by the most on record in November and confidence among
manufacturers tumbled, adding to signs the nation will join
Japan, Europe and the U.S. in recession.

South Korea Posts Current-Account Surplus, Easing Pressure on Currency South Korea posted a current-account
surplus for a second straight month in November, easing pressure
on the won, the region's worst-performing currency this year.

Thailand Posts Current-Account Deficit as Exports Decline Most Since 1992 Thailand posted a current-account
deficit in November for the fifth straight month as the global
economic slowdown cooled exports and a blockade of the country’s
main airports hurt tourism, the central bank said.

Loonie's Worst Year May Extend Into '09 as Canada Reels From Oil Collapse Canada’s currency may extend its
biggest annual decline on record, as tumbling crude prices hobble
foreign investment in the country’s oil patch, according to the
world’s biggest strategists and economists.

Toyota, Honda May Scrap `Just-in-Time' Inventory as `Supplier Shock' Looms Toyota Motor Corp. and Honda
Motor Co., Japan’s two largest carmakers, may modify
their so-called “just-in-time” manufacturing system to
avoid possible supplier bankruptcies disrupting production.

IMF Backs Obama Stimulus Plan

The IMF's top economist endorsed Obama's approach to
economic stimulus and urged countries to consider offering a kind of
"recession insurance."

GOP Warns Against Overspending on Stimulus

Republican lawmakers are positioning themselves as foes of
excessive spending as they prepare for battle over Obama's stimulus
package.

Morning Economic News - December 29, 2008

2008-12-28T23:45:00.000-08:00

Commentary and Overnight Trading

Even trouble in the Middle East hasn't managed to move oil back above the $40 mark yet [2:30 AM Eastern]. And though a $1.31 increase has it well within striking distance of that mark, the increase can be accounted for almost entirely by a drop in the dollar - down against the yen, euro, pound and Canadian dollar. US stock market index futures are down about a half-percent, while Asian markets are up slightly.

Financial Roadmap: The Week Ahead December 29, 2008 to January 2, 2009

This week will give investors another breather of sorts with overflow
from last week's holidays starting off the week when the Fed reports on
money supply Monday. This statistic had become so boring, and so little
consulted, a few years ago that the Fed moved to a leaner version. The
theory at the time was that what was important to watch for monetary
policy was the federal funds rate. Now the Fed has slashed that rate
about as low as possible and is directly inflating the money supply as
a major policy tool. The numbers are getting very interesting and they
are pointing in a very familiar direction – another bubble is in the
works.

Economic News

Durable Goods Orders - November 2008

New Orders: $186.9 billion

New Orders Change: Down 1%

Nondefense Capital Goods Change: Down 0.8%

Jobless Claims - December 24, 2008

Initial Claims: 586,000

Change from Last Week: Up 30,000

Personal Income and Outlays - November 2008

Personal Income: Down $20.7 billion

Monthly Change: Down 0.2%

Real Disposable Personal Income: Up 1%

Weekly Mortgage Applications Survey - December 24, 2008

Market Composite Index: 1245.4

Change: Up 48%

Purchase Index: 316.5

Change: Up 10.6%

Interest rates at 37-year low

Freddie Mac and the Mortgage Bankers Association are both reporting
30-year rates near 5% and 15-year Fixed Rate Mortgage (FRM) rates below
5% for a second week. Buyers have responded aggressively to the lower
rates, with mortgage applications for home purchases up more than 10%
last week.

What I'm Reading

Paulson's Progress With China Evaporates as Recession Reopens Trade Rifts The global recession is re-exposing
fissures in U.S.-China relations that Treasury Secretary Henry
Paulson spent more than two years smoothing over.

U.S. Retailers Face Store Closings, Bankruptcies as Holiday Sales Slump U.S. retailers face a wave of store
closings, bankruptcies and takeovers starting next month as
holiday sales are shaping up to be the worst in 40 years.

London House Prices Led Declines Across U.K. in 2008 and May Fall Further London house prices fell more than
in any other U.K. region this year and probably will decline
further in 2009 as the economy sinks deeper into a recession,
Hometrack Ltd. said.

South Korea Consumer Confidence Falls to 10-Year Low as Unemployment Rises South Korea’s consumer confidence
fell to the lowest level since the Asian financial crisis a
decade ago on concern faltering economic growth will lead to
further job cuts and falling incomes.

Japan Economy May Shrink 6.5% This Quarter, Bank of America's Fujii Says Japan’s economy may shrink at an
annual 6.5 percent pace this quarter, Bank of America Corp. said
after reports last week showed industrial production and exports
posted the biggest declines on record.

Israel May Cut Key Interest Rate Half-Point to Record 2% as Growth Weakens The Bank of Israel will probably
lower its benchmark lending rate tomorrow to a record as
Governor Stanley Fischer seeks to shore up flagging economic
growth, a survey showed.

U.S. Manufacturing Probably Shrank Most Since 1980 as Global Demand Slid Manufacturing in the U.S. probably
shrank at the fastest pace since 1980 as the deepening global
recession forced customers in North America, Europe and Asia to
cut back, economists said before reports this week.

Democrats May Add Municipal-Bond Tax Break to Sweeten Obama Stimulus Plan Congressional Democrats are seeking
to expand funding for airport runways, housing projects and
sewage-treatment plants though a new tax break for municipal
bondholders.

Biggest Bond Investors Look for European Rally in 2009 as ECB Follows Fed The world’s biggest bond investors
are betting European Central Bank President Jean-Claude Trichet
will be forced to follow Federal Reserve Chairman Ben S.
Bernanke and step up the pace of interest-rate cuts.

Iceland's Fall: The Isle That Rattled the World

Iceland is an extreme casualty of an era in which it was
easy to borrow money. The tiny isle became so leveraged that its
collapse has rattled the world.

Morning Economic News - December 24, 2008

2008-12-24T00:14:00.000-08:00

Commentary and Overnight Trading

Tuesday the stock market shrugged off a megadose of bad news that would have easily made for a 500 point drop in the Dow in September or October with a relatively small 1% drop. Both major housing sales indicators fell significantly in November. Part of the reason may be just how far the market has already fallen and that's reflected in another number that came out Tuesday: The State Street Investor Confidence Index. The Index, which measures the ratio of institutional investments in equity versus (theoretically less risky) debt securities fell by 1/3, indicating a huge shift out of stocks over the last month.

Markets trading overnight seem little thrilled or scared by the days news either, with US stock market futures up two-tenths of a percent, oil down 0.15% and Asian stock markets mixed with the biggest move a 2.37% drop in the Nikkei. The dollar is down against the yen, euro, pound and Canadian dollar. [3:14 AM EAstern]

Tuesday's Economic News

State Street Investor Confidence Index - December 2008

Global Index: 48.0

Monthly Change: Down 6.5

Year-to-year Change: Down 17.9

North America Index: 30.1

Monthly Change: Down 15.2

Existing Home Sales - November 2008

Total Existing Home Sales Annual Rate: 4.49 million

Monthly Change: Down 8.6%

Year-to-year Change: Down 10.6%

New Home Sales - November 2008

Annual Sales Rate (Seasonally Adjusted): 407,000

Monthly Change: Down 2.9%

Annual Change: Down 35.3%

German Leading Index Down 2.6%

Leading Index: Up 0.1%

Coincident Index: Up 0.3%

What I'm Reading

Recession Compounds Housing Woes

A deepening recession and tight credit conditions are
compounding problems in the housing market, suggesting that declines in
home prices may continue well into 2009.

Japan Manufacturers' Confidence Slumps as Recession Deepens, Survey Shows Confidence among Japanese
manufacturers fell the most on record as exports collapsed,
signaling the recession will extend into 2009.

Thailand to Lift Spending as Government Predicts First Recession in Decade Thailand’s new government plans to
increase spending and tax breaks to stimulate domestic demand as
it forecast the economy will slip into its first recession in
almost a decade.

Philippine Imports Fall for First Time in 17 Months on Electronics Orders Philippine imports fell for the
first time in 17 months as demand waned for raw materials used
by electronics exporters amid a global recession.

U.S. Housing Prices Collapse at Near-Depression Pace After Purchases Slide Sales of single-family houses in the
U.S. dropped in November by the most in two decades and resale
prices collapsed at a pace reminiscent of the Great Depression,
dashing speculation the market was close to a bottom.

U.S. Economy Contracted 0.5% in Third Quarter as Recession Began to Deepen The U.S. economy shrank in the third
quarter at a 0.5 percent annual pace as the now year-old
recession intensified.

U.K. Economy Shrank Most Since 1990 in Third Quarter, Exceeding Estimates The U.K. economy shrank the most
since 1990 in the third quarter and mortgage lending dropped to
the lowest in 14 years as tightening credit exacerbated the
slide into recession.

China Stocks Lure BlackRock With `Mother' of Stimulus Plans as Mobius Buys The biggest investors in emerging
markets say China is the best choice for 2009, betting plans to
stimulate growth will lead a stock market recovery in the fastest
growing major economy.

Australian Funding Costs Decline for a Fourth Day on Central Bank Actions Australian funding costs fell for a
fourth day on speculation central banks worldwide will add to
cuts in borrowing costs that led to near-zero interest rates in
the U.S. and Japan.

Philippine Peso, Stocks Drop in Year on Signs Global Slump Hurting Exports The Philippine peso headed for its
worst year since 2000 and stocks had their biggest annual loss
in at least two decades on signs the global slowdown is hurting
sales of the nation’s exports.

US, UK housing slump deepens; Japan boosts spending

Morning Economic News - December 23, 2008

2008-12-23T00:29:00.000-08:00

Commentary and Overnight Trading

The Hang Seng Index is down more than 3% and the S&P/ASX 200 is down 0.73%, US stock market futures are mixed with DJIA futures down slightly, S&P500 up slightly and NASDAQ down slightly. NYMEX Crude Oil futures are down more than 1% on reports that Chinese oil production will rise 1.2%. This news after the US Energy Information Administration last week reported that three new US platforms coming online next year will produce nearly as much oil as the state of California. The dollar is up less than a tenth of a percent against the yen and the Canadian dollar and down against the euro and the pound. [3:29 AM Eastern]

Monday's Economic Numbers

Australian Leading Index fell for second month

Leading Index: Down 0.5%

Coincident Index: Up 0.2%

Mexican Leading Index dropped more than 5% in October

Leading Index: Down 5.7%

Coincident: Down 0.2%

What I'm Reading

Foreclosure Mitigation Makes Little Headway

Intensified efforts by mortgage servicers to help borrowers
stay in their homes failed to stem the growing number of foreclosures
in the third quarter.

Saudi Arabia to Boost Spending

Saudi Arabia plans to ramp up government spending next year
and incur its first budget deficit in six years to keep its economy
growing.

France's Consumer Spending Unexpectedly Rebounds as Energy Prices Decline French consumer spending unexpectedly
rebounded in November as stimulus measures and declining energy
prices cushioned the impact of the deteriorating economic
environment.

China Steps to Increase Consumer Spending May Follow Latest Rate Reduction China may follow its latest interest-
rate cut with steps to spur consumer spending as deepening
recessions in the U.S. and Europe pummel exports, one of the main
engines of the world's fourth-largest economy.

New Zealand Economy Shrinks 0.4% as Recession Deepens on Spending, Exports New Zealand’s economy contracted for
the third straight quarter, extending the nation’s first
recession in 10 years and adding to the prospect the central
bank will cut interest rates to a record low next month.

Frozen Ports From Long Beach to Singapore Presage Bleak Trade Into 2010 Chris Lytle, chief operating officer
of the port of Long Beach, California, took in a panorama of the
slumping world economy from his rooftop observation deck one day
this month.

Chile's Copper Windfall Props Up Spending While Ecuador Defaults on Bonds Chilean homemaker Majorie Rojo shrugs
when asked about the crash in the price of copper, the engine of
her nation’s economy.

Won, Rupee, Asia's Biggest Losers, Will Shine in 2009, Moody's Unit Says South Korea’s won and India’s rupee,
Asia’s biggest losers this year, will be the region’s biggest
gainers from improved appetite for emerging-market assets and a
recovery in the global economy, said Moody’s Economy.com.

Thailand's New Government May Increase Stimulus Spending by 80%, Korn Says Thailand's new government may
increase spending by 80 percent to spur an economy hurt by the
global recession and domestic political strife, Finance Minister
Korn Chatikavanij said.

World economies slide into recession

Dec 23 (Reuters) - New Zealand's economy contracted by its
biggest amount in eight years, third quarter data showed on
Tuesday, reinforcing expectations that its recession will not
lift until well into 2009

Asian shares ignore China cut

Dec 23 - Asia stock markets retreated for a
third straight day on Tuesday as more investors locked in profits on
the year-end rally and prepared to close their books ignoring a rate
cut by china.

Morning Economic News - December 22, 2008

2008-12-21T22:40:00.000-08:00

Commentary and Overnight Trading

US stock market futures are up about 3/4 percent in early overnight trading [1 AM Eastern], the Nikkei is up 1.57%, the Hang Seng is down 1.67% and the S&P/ASX 200 down 1.61%. The NYMEX crude oil future is up 1.75%, with the February future trading almost $10 above Friday's spot price close (but still below $45/barrel). The dollar is up against the yen, pound and Canadian dollar. It's down against the euro, in spite of Barclays and UBS predicting a 10% drop in the euro in the next three months.

Financial Roadmap: The Week Ahead December 22 to 26, 2008

Investors will find lots of information packed into the holiday
shortened week and it's even more packed with no major indicators due
out until Tuesday. The first numbers due out are the Commerce
Department's final 3rd quarter GDP and corporate crofits figures with a
0.5% drop in GDP expected. Aside from corporate profits, Tuesday will
have one other big corporate oriented figure – the State Street
Investor Confidence Index. This index, which measures the actual risk
taking behavior of institutional portfolios, could help indicate if the
market has actually bottomed or if we are in a sustained bear market
rally – if the big boys are starting to move out of debt securities
back into equities, it's a good sign.

What I'm Reading

Euro Will Fall 10% Versus Dollar in 3 Months, UBS, Barclays Say

Trade-Finance Pinch Hurts the Healthy

The global financial crisis is drying up financing that
firms depend on for trade, making the recession deeper than it
otherwise would be.

Paulson Wants Rest of TARP Funds

The U.S. rescue of the auto industry drained what remained
in the first half of Treasury's $700 billion bailout fund, prompting
Paulson to call on Congress to release the rest of the money.

Aid to Homeowners May Double Next Year Under Bush-Backed Mortgage Program The mortgage-industry effort to stem
foreclosures aims to double the number of borrowers getting help
next year, as Democrats call for using taxpayer money to address
the crisis.

Japanese Exports Plunge Record 27% as Economy Sinks Further Into Recession Japan’s exports plunged the most on
record in November as global demand for cars and electronics
collapsed, signaling more factory shutdowns and job cuts are
likely as the recession deepens.

New Zealand's Recession Probably Deepened, Signaling More Rate Cuts Needed New Zealand’s recession probably
extended into a third quarter as consumers and businesses reined
in spending and exports of milk, timber and wool eased.

Japan Lowers Its Economic Assessment for Third Month as Recession Deepens The Japanese government lowered its
assessment of the economy for a third month, describing
conditions as the most severe since 2002.

Recession-Strapped U.S. Christmas Shoppers Search for Bargains, Discounts Cash-strapped shoppers are searching
for bargains in the final days before Christmas and some are
limiting their gift-giving to children in what could be a make-
or-break weekend for U.S. retailers.

Treasury Bond Bubble Sucks up Investors Who Can't Say No to Lowest Yields The world’s biggest bond investors
can’t stop buying Treasuries even though they’re comparing
government debt to Internet stocks just before the technology
bubble burst.

Oligarchs Seek $78 Billion Loans as Credit-Market Squeeze Empowers Putin Russian oligarchs are lining up for
$78 billion of Kremlin loans to survive the credit squeeze,
handing Prime Minister Vladimir Putin the opportunity to increase
government control of the nation’s biggest companies.

Japan exports collapse as yen, world recession bite

China FX reserves fall in Oct, first time since '03

Japan recession deepens, Ireland bails out banks

Morning Economic News - December 19, 2008

2008-12-18T22:26:00.001-08:00

Commentary and Overnight Trading

The Bank of Japan returned to a near Zero Interest Rate Policy (ZIRP) that it had only abandoned in the last couple of years, after the Fed's ZIRP announcement Tuesday, and announced that it will buy corporate debt to inject money into businesses. The European Central Bank announced it was cutting interest it pays on deposits in the hope of spurring banks to loan to each other rather than deposit excess reserves. Central banks and governments worldwide are matching the US Federal Reserve move for move in easing monetary policy, which should help support the dollar. On the other hand, with increasing good signs in credit markets and liquidations wringing some of the riskiest excesses from financial markets, investors are not flocking to the dollar as a stable haven. The flight to quality is reversing - bad news for US citizens traveling overseas, but good news for US exporters.

Asian stocks are down in early overnight trading (1:30 AM Eastern) driven partly by drops in commodity stocks. The S&P/ASX 200 is up 0.96%, while the Hang Seng and Nikkei are each down less than 1%. US stock market futures are down less than 1% as well. Crude oil has recovered 0.6% after dropping nearly 10% Thursday. The dollar is down against many currencies, including the yen, euro and pound, but is up against the Canadian dollar and several Asian currencies. ;

Thursday's Economic News

Mortgage rates below 5%

The Mortgage Bankers Association and Freddie Mac both reported good
news for those needing to refinance mortgages and those with resetting
ARMs with the MBAA reporting an average 15-year Fixed Rate Mortgage
(FRM) rate below 5% and Freddie Mac reporting a 1-year ARM rate below
5% and 15-year FRM rates below 5%. Even 30-year FRM rates are flirting
with 5% according to both reports.

Jobless Claims - December 18, 2008

Initial Claims: 554,000

Change from Last Week: Down 21,000

4-Week Moving Average: 543,750

Money Supply - December 18, 2008

M1 Seasonally Adjusted Prior Month: $1525.0 billion

M1 Annual Change (Unadjusted): Up $160 billion

Leading Index (US) - November 2008

Leading Index: Down 0.4%

Coincident Index: Down 0.3%

Lagging Index: Up 0.1%

What I'm Reading

Bank of Japan Cuts Interest Rate

The Bank of Japan became the latest central bank to cut rates to rock-bottom levels, reducing the benchmark rate to 0.1%.

ECB Moves to Foster Interbank Lending

The ECB widened its interest-rate corridor and cut the return it gives
banks for holding cash with it as it seeks to prod interbank money
markets back to normality.

RBS slashes China '09 GDP growth forecast to 5 pct

BEIJING, Dec 19 (Reuters) - Royal Bank of Scotland on Friday
slashed its forecast for China's 2009 gross domestic product
growth to 5 percent, from 8 percent, warning about the potential
for increasing social tensions as the economy falters.

Mexico to cut import tariffs to support industry

Bank of Japan Cuts Benchmark Rate to 0.1%, to Start Buying Corporate Debt The Bank of Japan cut its benchmark
interest rate to 0.1 percent and said it would buy corporate
debt as a deepening recession chokes off funding for businesses.

ECB's Trichet Says Deposit-Rate Cut May Help Revive Money-Market Lending European Central Bank President
Jean-Claude Trichet said financial companies may begin lending
more to each other after policy makers made it less attractive
to turn to them for support.

Japan Says Economy Won't Grow in Fiscal 2009 as Global Recession Deepens Japan’s government slashed its
economic growth forecast for next fiscal year as the global
slowdown prompts companies to cut business investment.

U.S. Leading Economic Indicators Index Falls 0.4% as Outlook Deteriorates A gauge of the economy’s future
performance posted its biggest annual drop since 1991 in November
as the declines in housing and job markets accelerated, showing
little sign the U.S. contraction will ease in early 2009.

Paulson May Ask Congress to Release Next $350 Billion in Bank-Rescue Funds Treasury Secretary Henry Paulson may
ask Congress for the second half of the $700 billion bank rescue
program, concerned that the deepening recession may spark
further financial turmoil.

Harvard Economist Feldstein Says Recovery Won't Start for Another Year The U.S. economy likely won’t start
recovering from a recession for at least another year, making
this the longest downturn since the 1930s, said Harvard
University economist Martin Feldstein, a member of the
committee that charts American business cycles.

Greenspan Says Financial Markets Are Likely to Rebound in 6 to 12 Months Financial markets, which have been
depressed by “fear” not seen since at least the 1930s, are
likely to rebound in the next six to 12 months, former Federal
Reserve Chairman Alan Greenspan said in a commentary published
by The Economist online.

Philippines Posts Third Straight Monthly Budget Deficit on State Spending The Philippine government posted its
third straight monthly budget deficit in November as it boosted
spending to counter the global recession.

World Economy to Contract for First Time in Almost 50 Years, Bankers Say The world economy will contract next
year for the first time in almost 50 years, as industrial
nations are wracked by recession, and growth in emerging markets
is cut almost in half, a banking industry group said.

Morning Economic News - December 18, 2008

2008-12-17T22:34:00.000-08:00

Commentary and Overnight Trading

The big question Thursday morning is how US markets will react to the bombshell Chrysler dropped after the market close Wednesday: all plants closed for at least a month starting Friday. Bear in mind that, while this is awful news for temp workers and suppliers, it won't lower costs enough to keep the company afloat long term because Chrysler's union workers will get on average 95% of their pay under the job bank agreement.

In early overnight trading (1:30 AM Eastern) US stock market futures are mixed - the Dow Jones Industrial Average up 13 points, the NASDAQ down 12.5 points and the S&P 500 up 0.7 - as are Asian indexes. Oil is down more than 1% on top of Wednesday's 8% drop to put the NYMEX crude future below $40. The dollar is up strongly against the yen, up slightly against the pound and the Canadian dollar and down slightly against the euro.

Update and correction: US stock market futures are up - DJIA by 65 points, S&P 500 by 6.4 points. NASDAQ futures are up 5, but I'm having to get the numbers from an alternate source as my usual source isn't reporting NASDAQ - the previous "down 12.5" was actually the 12/17 close. The dollar is now up substantially against the pound and down substantially against the euro. Oil is up, with the NYMEX contract back above $40.

Wednesday's Economic News

Consumer Price Index (CPI) - November 2008

CPI-U: 212.425

Monthly Change: Down 1.9%

Year-to-year Change: Up 1.1%

Federal Funds Rate (FOMC) - December 16, 2008

Overall, the outlook for economic activity has weakened further

…inflationary pressures have diminished appreciably…the Committee expects inflation to moderate further in coming quarters.

…weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

Current Account - 3rd Quarter 2008

Current Account Deficit: $174.1 billion

Quarterly Change: Down $6.8 billion

Goods Deficit: $214.7 billion

Quarterly Change: Down $1.6 billion

Weekly Mortgage Applications Survey - December 17, 2008

Market Composite Index: 841.4

Change: Up 2.9%

Purchase Index: 286.1

Change: Down 4.5%

What if we added a whole oil producing state next year?

The Energy Information Administration is predicting big increases in US oil production in 2009. In fact, according to This Week in Petroleum
one new platform in the Gulf of Mexico, the Thunder Horse platform,
«would rank as the fourth largest producing State» in the country.
Thunder Horse will produce more oil than Louisiana or Oklahoma. Three
new platforms combined will produce more oil than all the states
combined except Alaska, Texas and California.

Creative Financing: Help During the Housing Downturn

With home prices falling in many parts of the country, sales slower
than normal in other parts and mortgage standards higher than any time
since the late ’80s, buyers and sellers can both benefit from creative
financing - owner finance, lease options, lesser known grant and loan
programs, and more.

What I'm Reading

Global Crisis Resists Central-Bank Moves

Central banks around the world cut rates a day after the
Fed's move, and Japan, the U.K. and euro-zone economies may follow suit.

OPEC Plans Record Output Cut

OPEC will cut crude production by a record 2.2 million
barrels a day, but the cartel's announcement failed to stop oil prices
from dropping to their lowest level in four years.

Global Confidence Wanes as World Sinks Into Recession, China Growth Slows Confidence in the world economy fell
in December as a recession spread beyond the U.S. and growth
weakened in China and Latin America, a survey of Bloomberg users
on six continents showed.

European November Inflation Rate Falls Most in Almost Two Decades to 2.1% Europe’s inflation rate fell the
most in almost two decades last month as oil prices plunged,
giving the European Central Bank more leeway to cut interest
rates.

Current-Account Deficit in U.S. Narrowed in Third Quarter on Export Gains The U.S. current-account deficit
narrowed more than forecast in the third quarter to $174.1
billion, reflecting gains in exports and decreases in foreign
earnings on American assets.

U.K. Unemployment Rose at Fastest Pace Since '91 as BOE Weighed Deeper Cut U.K. unemployment rose at the
fastest pace since 1991 in November and the Bank of England
considered cutting interest rates to the lowest ever this month
as the recession tightened its grip.

Fed Efforts to Unlock Housing Market Fail to Spur Buying: Chart of the Day The Federal Reserve’s efforts to make
homes more affordable have yet to bolster buying and instead are
fueling a surge in refinancing, according to data compiled by the
Mortgage Bankers Association.

Nomura Cuts Vietnam Growth Forecast to 5% on Delays in Investment Projects Nomura Holdings Inc. cut forecasts
for Vietnam’s economic growth because of delays in foreign-
invested projects amid a faltering global economy.

Bernanke Charts New Fed Course With Zero Rate, Pledge to Purchase Assets The Federal Reserve opened a new era
in U.S. monetary history, cutting interest rates to as low as
zero and pledging to buy unlimited quantities of securities,
after conventional policies failed to arrest what may be the
worst recession since World War II.

Zoellick Says the Right Government Policies Are Crucial to Global Recovery The right government policies will
be key to reviving economic growth forecast to cool globally in
the first half of 2009, World Bank President Robert Zoellick
said today.

Zhou Stokes Speculation China Will Cut Rates Again Soon as Inflation Eases Chinese central bank Governor Zhou
Xiaochuan stoked speculation that an interest-rate cut is
imminent, reiterating that falling inflation has added pressure
for a reduction.

Chrysler shuts plants

Dec 18 - Facing a credit crisis and dwindling
sales, Chrysler announced it would shut down all manufacturing
operations from Dec. 19 for at least a month

Morning Economic News - December 17, 2008

2008-12-16T14:21:00.000-08:00

Commentary and Overnight Trading

With Tuesday's big news, there's a bit more to today's commentary. The big question for today will be when and if the markets start to look seriously at the real question marks raised by yesterday's Fed rate reduction. Here are some specific points to consider:

The rate was essentially cut to zero and that move was unanimous. The inflation hawks saw something serious enough that they agreed to a zero rate.

The move was essentially a ratification of what the market was already doing. While a floating fed funds rate might be a good thing for long run policy, the fact that the Fed was bullied into it by circumstances represents a dangerous lack of control.

A range instead of a rate target. I'm reading this as "Our target is really zero. We don't want to say zero yet, because we want somewhere else to go." Both halves of that are bad signs.

An alternate reading of the range thing is "We'd just like to be able to get enough control to hold it in a quarter point range." Bad as my interpretation is, that's even worse.

Yesterday's Economic News

Morning Economic News - December 16, 2008

2008-12-15T23:47:00.000-08:00

Commentary and Overnight Trading

Things are shaping up for a second day of relatively small drops in stock prices on Wall Street with US stock market futures down about 1/4%. The Nikkei is down more than 1%, the S&P/ASX200 is down nearly 1% and the Hang Seng is up 0.13%. The dollar is regaining some of Monday's losses against the euro and the pound, is down slightly against the Canadian dollar and down more than half a percent against the yen. Oil has regained three-quarter percent after falling Monday. [2:45 AM Eastern];

Monday's Economic News

Industrial Production - November 2008

Industrial Production Index: 106.8

(Base year 2002, Seasonally Adjusted)

Monthly Change: down 0.6%

Manufacturing Change: down 1.4%

Empire State Manufacturing Survey - November 2008

Business Conditions Index: -25.8

Monthly Change: down slightly

New Orders Index: -20.8

Housing Market Index - December 2008

Current Month Index: 9

Monthly Change: 0

Current 1-Family Sales Index: 8

Monthly Change: down 1

What I'm Reading

Ecuador to Default on More Bonds

Ecuador says it is defaulting on a second bond payment, interest on $650 million in Global 15 bonds due through 2015.

U.S. Factories Slash Output Amid Slump

U.S. factories slashed output amid a deepening recession. Industrial output is on track for its worst quarter since 1980.

Russian Industrial Production Shrinks Most Since Economic Collapse of 1998 Russian industrial production shrank
the most since the economic collapse of 1998 in November as the
global slowdown reduced demand for steel, pipes and fertilizers
and pushed the nation to the brink of recession.

Bernanke Prepares to Deploy Balance Sheet as Interest Rate Approaches Zero The Federal Reserve may today reduce
its main interest rate to the lowest level on record and prepare
for one of the boldest experiments in its 94-year history: using
its balance sheet as the key tool for monetary policy.

U.S. Consumer Prices Probably Fell Most on Record as Energy Costs Retreat The cost of living in the U.S.
probably fell in November by the most on record, as the value
of oil plunged and retailers slashed prices to boost sales
before the holidays, economists said ahead of a government
report today.

European Car Sales Slumped 26% in November as Recession Concern Deepened European car sales plunged 26 percent
in November, the biggest monthly drop since 1999, as the economic
recession and tighter credit held back demand for new vehicles.

U.S. May Give Car Czar or Treasury Power to Force Bankruptcy, Levin Says The U.S. Treasury may adopt a plan
that would let a car czar or the Treasury Secretary force General
Motors Corp. and Chrysler LLC into bankruptcy if the automakers
don’t show they can survive without government aid, a U.S.
senator said.

Aso Puts Pressure on Bank of Japan to Do More for Economy as Slump Deepens Japan’s government increased
pressure on the central bank to implement measures to spur
economic growth after plunging business confidence indicated the
recession will deepen.

China's Zhou Says Rates May Fall This Month as Economy, Inflation Weaken China’s central bank Governor Zhou
Xiaochuan said interest rates may fall again this month after
exports declined, inflation slowed and a report today showed
property investment cooled.

Shirakawa Says Buying Corporate Debt Remains an Option for Bank of Japan Bank of Japan Governor Masaaki
Shirakawa said he hasn’t dismissed the possibility that the
central bank may start buying short-term corporate debt, while
adding that such a move may put a strain on its balance sheet.

ECB's Draghi Calls for More Measures at `Critical Stage' of Global Crisis Financial Stability Forum Chairman
Mario Draghi said another round of fiscal, monetary and
regulatory measures is needed at this “critical stage” of the
global financial crisis.

Singapore's Economic Growth May Miss Government Forecast Amid Global Slump Singapore’s economic growth this
year may miss the government’s forecast as the global economy
worsens amid a credit crisis, Trade Minister Lim Hng Kiang said.

Sri Lanka Economic Growth Slows to 6.3% as Global Recession Hurts Exports Sri Lanka’s economic growth slowed
last quarter as a global recession reduced demand for the
nation’s tea, rubber and textile exports.

China capital spending weakens, tough months ahead

* Economists divided on outlook, but expect further
measures

Japan household assets dive on stock slide -BOJ

TOKYO, Dec 16 (Reuters) - The value of financial assets held
by Japanese households fell in July-September in its steepest
drop ever, as a sharp slide in Tokyo share prices took a toll.

Morning Economic News - December 15, 2008

2008-12-14T22:41:00.000-08:00

Commentary and Overnight Trading

Markets seem to be liking the news over the weekend, at least somewhat, as the Nikkei average is up 5.21%, the Hang Seng is up 3.07% and the S&P/ASX200 is up 2.31%. US stock market futures are up about three-quarter percent. Oil prices are up and the dollar is down against the Canadian dollar, euro, pound and yen. [1:40 AM Easterm]

Weekly Financial Roadmap

Financial Roadmap: The Week Ahead December 15 to 19, 2008

While there are plenty of economic numbers due out this week, weak
reports are almost such a foregone conclusion for several – especially
those related to new home construction and industrial production – that
watching them is a more a matter of staying in practice than looking
for any real insight. Two numbers due out early in the week will be
worth watching because they will give some indication of just how much
leeway the government has with all the fiscal stimulus and bailout
spending before it begins to impact the value of the dollar – Treasury
International Capital and CPI.

Friday's Economic News

Retail Sales - November 2008

Total Retail and Food Service Sales Annual Change: Down 7.4%

Retail Sales Monthly: Down 2%

Producer Price Index - November 2008

Finished Goods Index: Down 2.2%

Finished Goods Core: Up 0.1%

Intermediate Goods Index: Down 4.3%

Crude Goods Index: Down 12.5%

What I'm Reading

OPEC in Race Against Falling Prices

OPEC ministers meeting in Algeria this week could cut as much as two million barrels a day from oil production

Target Rate Could Be Sliced to Near Zero

The Federal Reserve is expected to cut the fed-funds target
rate to levels not seen in decades, but that is unlikely to impress
Treasury-market investors.

Annus Horribilis Climaxes in Anxiety as New Year's Economy Sees No Bottom This was the year the global economy
fell apart. Next year may not be that much better, as policy
makers try to put the pieces back together.

Japanese Business Confidence Plunges Most in 34 Years as Recession Deepens Sentiment among Japan’s largest
manufacturers fell the most in 34 years, signaling companies are
likely to cancel spending plans and cut more jobs, pushing the
economy further into recession.

Bank of Japan May Need to Cut Rate Again, Former Deputy Governor Muto Says The Bank of Japan may cut the
benchmark interest rate further to show its commitment to
countering a deepening recession and market turmoil, said Toshiro
Muto, a former central bank deputy governor.

China's Industrial Output Grows at Weakest Pace Since 1999 on Export Slump China’s industrial production grew at
the weakest pace in almost a decade as export growth collapsed,
increasing pressure on the government to do more to revive the
slumping economy.

Dollar Staggers as U.S. Unleashes Flood, Deficits Increase, Fed Cuts Rates The biggest foreign-exchange
strategists and investors say the best may be over for the dollar
after a four-month, 24 percent rally.

Singapore's Retail Sales Unexpectedly Decline as Recession Hurts Spending Singapore’s retail sales
unexpectedly fell in October as a deteriorating economy prompted
consumers to pare spending on vehicles, furniture and clothing.

Putin's Devaluation Delay Risks Russia's Industry as Exports Steal Share Russian Prime Minister Vladimir
Putin’s pledge to avoid a “sharp” devaluation of the ruble and
let the currency fall gradually has dissuaded citizens from
storming banks to withdraw their savings as they did during the
crisis of 1998.

U.K. House Prices Will Drop 10% in 2009 as Recession Bites, Rightmove Says U.K. house prices extended declines
in December and will drop a further 10 percent next year as the
recession batters the British economy, Rightmove Plc said.

Treasury Benefits From `Massive Paranoia' as Bailout Borrowing Cost Falls Bill Clinton was forced to abandon
spending initiatives to boost the economy at the start of his
presidency when advisors warned him that the borrowing needed to
fund the programs would push interest rates higher. President-
elect Barack Obama may not have the same problem.

Japan's Business Confidence Falls Most in 34 Years: Table of the Day Following is the summary table
for the Tankan survey from the Bank of Japan in Tokyo.

Indonesian president announces cuts in fuel prices

Morning Economic News - December 12, 2008

2008-12-11T23:30:00.000-08:00

Commentary and Overnight Trading

Thursday's economic reports were all about tough to decipher mixed news, which may explain how the US stock market held on for a good part of the day only to end down significantly in late afternoon. Earlier in the week, there was plenty of mixed news in real estate. That was followed up with a mixed set of reports on international trade. The trade deficit was up, which would normally be an indicator that US consumer demand was returning, but this time around it meant that both exports and imports had dropped. Since I focus mainly on total trade volume, this is a bad sign, but it can't be taken in a vacuum either. The Import Export Price Indexes also released Thursday showed a substanital drop in prices for both imports and exports in the 3-6% range. If you look at the trade figures in constant prices, trade volume actually expanded, unfortunately the deflation is itself a bad sign. Thursday was no day for one-handed economists.

Markets abhor an information vacuum and things are looking down for the open Friday, with US stock market futures down 3.5% in overnight trading and both the Nikkei and Hang Seng indexes down more than 5.5%. Oil is also down 4.5% after what may have been a too strong rise on news of OPEC cuts. The US dollar is up strongly against the euro, pound and Canadian dollar, down even more strongly against the yen.

Yesterday's Economic Reports

CASH Index - December 2008

CASH Index Reading: 15.3

Monthly Change: Down 19.4

Expectations Index: -21.2

Expectations Index Change: Down 44.5

Import Export Price Indexes - November 2008

Import Prices: Down 6.7%

Non-petroleum Import Prices: Down 1.8%

Export Prices: Down 3.2%

International Trade (US) - October 2008

Exports Monthly Change: Down $3.4 billion

Exports Monthly Change: Down $2.7 billion

Monthly Change: Up $0.6 billion

Jobless Claims - December 11, 2008

Initial Claims: 573,000

Change from Last Week: Up 58,000

4-Week Moving Average: 540,500

Money Supply - December 11, 2008

M1 Seasonally Adjusted Prior Month: $1522.5 billion

M1 Annual Change (Unadjusted): Up $157.5 billion

M2 Seasonally Adjusted Prior Month: $7934.0 billion

M2 Annual Change (Unadjusted): Up $569.8 billion

Mortgage rates drop, housing news mixed this week

This week brought more muddled news for the housing market. Both
Freddie Mac and the Mortgage Bankers Association reported drops in
Fixed Rate Mortgage (FRM) rates and increases in Adjustable Rate
Mortgage (ARM) rates this week. Last Friday, the Mortgage Bankers
Assocation reported mortgage delinquency rates at an all time high, two
days after reporting an all time increase in mortgage applications;
this week, the MBA reported a small drop in mortgage applications.

Spanish economy takes a nosedive

Spain’s economy dropped hard in October after holding on admirably in August and September. The Leading Index, which had risen 0.4% combined in the previous two months,
fell 1.2% in October and the Coincident Index fell 0.3%. The drop was
broadly based with only 1 leading indicator and 1 coincident indicator
improving.

What I'm Reading

Debt Shows First Drop as Slump Squeezes Consumers

The U.S. economy is deteriorating more rapidly than
expected, indicating the recession will be deeper and longer than
feared. Economists in a WSJ survey expect the decline in GDP to
continue into next year.

Fed's Assets Top $2 Trillion

U.S. financial institutions continued to make extensive use
of the Fed's growing list of credit facilities, pushing the Fed's
balance sheet well past $2 trillion.

Household Net Worth in U.S. Drops Most on Record as Stocks, Homes Tumble U.S. household wealth fell in the
third quarter by the most on record as property values and stock
prices tumbled, highlighting the tattered state of consumer
finances even before the most recent slump in lending.

India's Industrial Production Dropped in October for First Time Since 1993 India’s industrial production
unexpectedly fell for the first time in 15 years, placing
pressure on policy makers to add to interest rate and tax cuts
to shield the weakening economy from a global recession.

U.S. Initial Unemployment Claims Soar to 26-Year High as Recession Deepens The number of Americans filing first-
time claims for unemployment benefits surged more than forecast
last week to a 26-year high, a sign companies are stepping up
firings as the recession deepens.

South Korea's Economy to Grow at Slowest in 11 Years, Central Bank Says South Korea’s economy will expand at
the slowest pace in 11 years in 2009 as the deepening global
recession cools demand at home and abroad, the central bank said.

South Korea, China, Japan Agree on $48 Billion in Currency Swaps Accords South Korea agreed on bilateral
currency swap accords with Japan and China in an effort to ensure
financial stability in Asia.

Japanese Consumer Sentiment Falls to Record Low as Companies Fire Workers Japan’s consumers became the most
pessimistic in at least 26 years, indicating their weaker
spending may deepen the recession.

China Retail-Sales Growth Slows to Weakest in 9 Months as Confidence Dips China’s retail sales grew at the
slowest pace in nine months as the economy and inflation cooled
and the global financial crisis damped consumer confidence.

ECB's Weber Cautions Against Reducing Key Interest Rate Below 2 Percent European Central Bank council member
Axel Weber cautioned against reducing interest rates below 2
percent, becoming the latest ECB policy maker to signal the bank
may be nearing the end of its rate-cutting cycle.

Swiss Central Bank Cuts Benchmark Interest Rate to 0.5%: Table of the Day The following table details the
changes in the Swiss National Bank’s 3-month LIBOR target
rate:

Japan consumer sentiment at record low in Nov

Jobless claims hit 26-year high, exports tumble

Morning Economic News - December 10, 2008

2008-12-10T21:14:00.000-08:00

The South Korean central bank dropped rates 1% Wednesday as the Leading Index for Korea slid 2.7% in a single month. This move adds further momentum to the movement of central banks to follow the Federal Reserve's lead in dropping rates to combat a recession that has gone global. Markets seem to be responding positively with oil prices rebounding despite a strong US inventory increase and continued demand weakness, stock prices increasing in the US and holding fairly steady in Asia overnight and US stock market futures down less than a quarter-percent early Thursday. The dollar is down against the yen, Canadian dollar, euro and pound, indicating some at least temporary respite from the "flight to quality" run to the dollar. On the other hand, there is one big negative sign for the economy that continues - US short term T-bill rates are at essentially zero (or even below zero adjusted for inflation), signaling that investors are nervous enough that they would rather hold "safe" Treasuries at no interest than risk the same money on stocks or even corporate debt.

Yesterday's Economic Reports

Federal Budget (US) - November 2008

Year-to-date: $401,574,000,000 deficit

Prior Year-to-date: $155,076,000,000 deficit

Weekly Mortgage Applications Survey - December 10, 2008

Market Composite Index: 796.8

Change: Down 7.1%

Purchase Index: 298.1

Change: Down 17.4%

Wholesale Trade - October 2008

Wholesale Sales: $377.4 billion

Monthly Change: Down 4.1%

Year-to-year Change: Up 2.7%

Oil rebounds despite inventory build signaling possible market bottoms

...oil markets shrugged off the news and rose Wednesday and in early
overnight trading Thursday. Though this is the same pattern we were
seeing this time last year at the height of the oil bubble, in this
case the news is a bit more positive than just a return of the oil
bubble (which is not likely). For weeks nothing has put a floor under
oil because the thing driving oil prices downward has been anxiety
about the global economy; this oil rebound seems to be part of a
broader floor that includes stock prices, other commodity prices and
foreign currencies (against the dollar), at least for now.

Korean Leading Index plummets, central bank cuts rates 1%

South Korea’s economic indicators took a big tumble in October, the
Leading Index dropping 2.9% and the Coincident Index falling 0.7%, and
the South Korean central bank responded to the bad economic news with a
1% drop in key interest rate targets. With a 0.7% decline in September and a 2.3% drop in August, this puts the Leading Index down a cumulative 5.9% in just three months.

What I'm Reading

Gas Consumption Kept in Check

U.S. gas consumption ticked up last week as prices fell,
but experts don't predict a sizable rebound in demand until the economy
improves.

Slowdown In China Gets Worse

Sudden declines in China's imports and exports show the
country's economic slowdown is entering a new and more serious phase,
exacerbating the global slump while jolting Chinese companies and
workers.

Bank of Korea Reduces Interest Rate 1 Percentage Point to a Record Low 3% The Bank of Korea cut its benchmark
interest rate to a record low of 3 percent in an effort to
prevent the global economic crisis from pushing the nation into
its first recession since 1998.

China's Inflation Cools to Weakest in 22 Months as Economic Growth Slows China’s inflation cooled to the
weakest pace in almost two years, giving the central bank room
for more interest-rate cuts.

Australia's Jobless Rate Rises to a One-Year High as Economic Growth Slows Australia’s jobless rate climbed to
the highest in a year as employers cut part-time workers in
November, adding to signs the economy may follow the U.S., Japan
and Europe into a recession.

Taiwan Central Bank May Cut Interest Rates as Global Recession Hurts Trade South Korea and Taiwan will probably
cut interest rates today to shore up economies buffeted by
declining demand for exports amid recessions in the U.S., Japan
and Europe and weakening growth in China.

Worst Spending Slump Since 1942 Paces `Scary' U.S. Recession, Survey Says The biggest slump in U.S. consumer
spending since 1942 will extend the recession and push the
jobless rate to the highest level in a quarter century, according
to economists surveyed by Bloomberg News.

US Nov retail sales post big drop -SpendingPulse

NEW YORK, Dec 11 (Reuters) - U.S. retail sales excluding
autos posted their biggest monthly drop in five years November,
as consumers, spooked by a deepening recession, pared spending
for a third straight month, a private report released on
Thursday showed.

Morning Economic News - December 10, 2008

2008-12-09T22:11:00.000-08:00

The Pending Home Sales Index fell, but there were two positive notes: the index ended up 2.4 points (2.8%) higher than expected and the previous month's index was revised upward. The reported drop was 0.7 points, but the drop from the initial September number was only 0.3%. Though the market seemed to repeat the pattern of shrugging off good news from the housing market again Tuesday, the picture was muddled by both a less than crystal clear housing improvement, other events and some natural profit taking. A good report on mortgage applicaionts Wednesday could be powerful fuel for the stock market.

Overnight trading points to an upward trend in the roller coaster, with US stock market futures up just under 1%, Asian stocks trading higher for both the Nikkei and Hang Seng indexes, and oil futures up more than 3%. The dollar is up against the yen, down against the Canadian dollar, euro and pound. [1:10 AM Eastern]

Yesterday's Economic Numbers

Pending Home Sales - October 2008

Pending Home Sales Index: 88.9

Monthly Change: Down 0.7

Yearly Change: Down 1%

Japan’s Leading Index plunged 2.5%

Leading Index: Down 2.5%

Coincident Index: Down 0.5%

Bank of Canada drops rates 3/4 percent

US Federal Reserve Federal Funds Rate: 1%

US Federal Reserve Discount Rate: 1.25%

Bank of Canada Overnight Rate: 1.5%

What I'm Reading

Fed Weighs Debt Sales of Its Own

The Federal Reserve is considering issuing its own debt for
the first time, a move that would give the central bank additional
flexibility.

Bernanke's GM Rejection Aimed at Trying to Define Fed Bailout Boundaries More than a year into the credit
crisis, Federal Reserve Chairman Ben S. Bernanke is still trying
to establish how far he’s willing to go to aid troubled
companies.

World Bank Cuts East Asia Growth Forecasts, Sees 'Hard Times' for Region East Asian economies will probably
expand at the slowest pace in eight years in 2009 as easing
export demand and declining investment and consumer spending
portend “hard times” for the region, the World Bank said.

U.K. Economy May Be Shrinking at Fastest Pace Since 1990, Institute Says The U.K. economy may contract at the
fastest pace since 1990 in the current quarter as the recession
intensifies, the National Institute for Economic and Social
Research said.

South Korean Unemployment Rate Climbs to 3.3% as Economy's Expansion Slows South Korea’s jobless rate rose for
the first time in seven months in November as fewer people got
jobs in manufacturing, construction, shops and restaurants.

Singapore Economy to Shrink in 2009 as Output, Exports Fall, Survey Shows Singapore’s economy will probably
shrink next year for the first time since 2001 as manufacturing
output and exports contract and consumer pare spending, a
central bank survey showed.

Japan Machine Orders Fall 4.4% as Global Slump Prompts Makers to Retrench Japanese machinery orders fell in
October as the deepening global recession choked off demand for
the country’s cars and electronics.

Japan's Core Machinery Orders Fall 4.4% in October: Table of the Day Japanese machinery orders, excluding
shipbuilding and utilities, fell 4.4 percent in October from September,
seasonally adjusted, the Cabinet Office in Tokyo said.

China wholesale inflation slumps; flags deflation risk

BEIJING, Dec 10 (Reuters) - China's wholesale price
inflation collapsed in November, undershooting expectations by
a wide margin and raising the risk that the once-sizzling
economy could find itself mired in deflation before long.

Morning Economic News - December 9, 2008

2008-12-09T01:07:00.001-08:00

Stocks look poised to give back some of Friday and Monday's gains with US stock market futures down a bit more than half a percent in overnight trading. The Nikkei average rose 0.8% Tuesday, but the Hang Seng dropped 1.94%, the S&P/ASX 200 fell 0.75% and European indexes opened down about 1.5%. Oil is down 0.6% with gasoline futures just over 95 cents. The dollar is up against the Canadian dollar, pound and euro, down against the yen.

Yesterday's Economic Numbers

Employment Trends Index - November 2008

Monthly Change: Down 1.6%

Year-to-year Change: Down 13%

What I'm Reading

Fed Seeks Fixes Beyond Rate Cuts

With the Fed's target interest rate quickly approaching
zero, central-bank officials are embracing a broad array of remedies
for the U.S. recession.

Companies Scale Back Hiring

The outlook for the global labor market is deteriorating
markedly as companies struggle with the credit crunch and weaker
consumer demand.

Japan Government Pledges More to Prevent the Economy From `Falling Apart' Japan’s government pledged to take
further measures to support an economy that reports showed today
is in worse shape than analysts predicted.

Bernanke `War Powers' Undermine Fed Presidents, Risk Divide on Next Steps The Federal Reserve’s interest-rate
target is getting close to zero, and so is the power of the
Fed’s regional bank presidents.

German Investor Confidence May Drop to Near Record Low as Economy Stumbles German investor confidence probably
dropped to near the lowest level on record in December as the
financial crisis pushed Europe’s largest economy deeper into
recession, a survey of economists shows.

U.K. Housing Sales Drop to Lowest Since at Least 1978 as Recession Deepens U.K. home sales declined to the
lowest level since at least 1978 as Britain plunged deeper into
a recession, the Royal Institution of Chartered Surveyors said.

Spain's `Best Generation' Stung by First Slump in Memory as Jobs Disappear Roberto Frenedoso, a 23-year
construction worker, has little to do these days except loiter
around a square with his unemployed friends in Madrid’s Getafe
suburb.

French Trade Deficit Unexpectedly Widens to a Record on Slumping Exports France’s trade deficit widened to a
record in October as the global economic slowdown hurt exports.

German Exports Declined in October as Slowing Global Growth Cools Demand Exports from Germany, Europe’s largest
economy, fell in October as cooling global growth curbed demand.

China's Exports Shrink, Industrial Output Cools, Central Bank Adviser Says China’s exports may have contracted
last month as industrial output cooled, adding pressure for
policy makers meeting in Beijing this week to do more to
sustain economic growth.

U.S. First-Quarter 2009 Hiring Plans Held Near 5-Year Low, Manpower Says Hiring plans by U.S. employers for
the first quarter of next year held near a five-year low,
signaling a weak labor market will persist into 2009, according
to a private survey.

China Boomtown Withers as U.S. Importers Push Worker Rights Amid Recession Li Wencheng chain smokes in the office
of his candy factory in China’s southern manufacturing belt and
frets over diminishing returns.

Japan's Third Quarter GDP Revised Down to 1.8 Percent: Table of the Day Following is a summary of real
gross domestic product from the Cabinet Office in Tokyo.

German export outlook bleak despite Oct respite

BERLIN, Dec 9 (Reuters) - Germany's trade surplus widened in
October, suggesting net trade may support the economy in the
final quarter, but the outlook for exports remains bleak with
orders for German goods falling sharply in recent months.

Japan deeper in recession, third-quarter GDP shows

Morning Economic News - December 8, 2008

2008-12-07T22:17:00.000-08:00

Asian stock markets rose sharply Monday, with the Nikkei up 5.48% and the Hang Seng up 7.52% at 1 AM Eastern. US stock market futures are also up nearly 2%. The dollar is down slightly against the yen and the Canadian dollar, down more than half a percent against the euro and pound. Oil prices have rebounded nearly 5% from Friday's close on news that major consumer China is likely to lower fuel prices spurring use and OPEC is likely to cut production.

Financial Roadmap: The Week Ahead December 8 to 12, 2008

Two of the biggest news events this week will happen Tuesday, with the
Bank of Canada widely expected to cut interest rates and the National
Association of Realtors set to report on Pending Home Sales for
October. After the Mortgage Bankers Association reported a record
breaking increase in mortgage applications last Wednesday, they
reported a record increase in foreclosures and delinquencies on Friday.
The market actually took the Wednesday report seriously, a first for
positive housing indicators in several months, and took the bad news
Friday in stride. Signs of a bottom or at least a short term
improvement in mood? Good news on Pending Home Sales and mortgage
applications this week could help a rebound; bad news could trigger
another attempt to find a new bottom.

Friday's Economic Reports

Employment Situation Report - November 2008

Monthly Change: Nonfarm Jobs Down 533,000

Unemployed Persons: 10,331 million

Unemployment Rate: 6.7%

Change: Up 0.2%

What I'm Reading

Obama Says Economy Will Worsen, Not Concerned About Short-Term Budget Gap President-elect Barack Obama said the
U.S. recession will worsen before a recovery takes hold and that
he will offer an economic stimulus plan “equal to the task”
without worrying about a short-term widening of the budget
deficit.

India Rate Cuts, Stimulus May Fail to Shore Up Growth as Investment Slumps Indian Prime Minister Manmohan Singh's
spending plan and interest rate cuts unveiled over the weekend
may not be enough to prevent economic growth slowing to the
weakest pace in six years, economists say.

Shirakawa May Need to Get Bolder to Save Japan Companies From Fund Drought Bank of Japan Governor Masaaki
Shirakawa may be forced to adopt more aggressive measures to ease
a credit shortage for companies, economists say.

U.S. in Danger of Worst Recession Since World War II as Job Losses Deepen The U.S. economy may be headed for
its deepest and longest recession since World War II as mounting
job losses take their toll on consumer confidence and spending.

IMF's Bailout Plan for Latvia Calls for Keeping Currency's Link With Euro Latvia’s International Monetary Fund-
led bailout package will involve loans from other European
governments and will maintain the country’s currency peg to the
euro, the IMF said.

Pakistan May Miss Growth Target, Inflation May Be 22%, Central Bank Says Pakistan’s central bank said the
nation’s economy may miss growth targets and inflation may rise
as high as 22 percent.

Japanese Companies Can Manage With Yen Around 92 vs Dollar, Sakurai Says Japanese companies can remain
profitable if the yen trades around 92 yen per dollar, said
Masamitsu Sakurai, head of the nation’s second-largest business
lobby.

South Korea's Producer Prices Plunge Most in 45 Years as Oil Costs Decline South Korea’s producer prices fell in
November by the most in 45 years as global commodity prices
plunged, giving the central bank room to reduce borrowing costs
further this week.

Kashkari Defends TARP Program After Congressmen Threaten to Withhold Funds Neel Kashkari, who oversees the U.S.
Treasury’s $700 billion financial-rescue plan, defended the
program today after congressional leaders threatened to withhold
the remaining half of the funding.

Employers in U.S. Cut 533,000 Jobs, Most in 34 Years: Table of the Day Following is a summary of the
November employment situation from the Labor Department.

Job Losses Are Worst Since '74

The U.S. lost half a million jobs in November, the largest
monthly drop in 34 years, pushing the unemployment rate to 6.7%, a
15-year high.

China Stimulus Slights Human Capital

China plans to spend $581 billion on a stimulus package,
but just 1% of that is going to social services. That balance needs to
be corrected, many scholars say, if China is to keep growing rapidly
and improving living standards.

Morning Economic News - December 5, 2008

2008-12-05T00:12:00.000-08:00

Another indication that Friday's jobs reports will be bad came in with the Monster Employment Index down 22% year-to-year. It wasn't all bad news though, with jobless claims dropping by 21,000 and the weekly rate 15,000 below the 4-week moving average. With the Goldman Sachs prediction after market hours Wednesday of a 400,000 job loss number Friday and the down day on Wall Street Thursday, there is room for a number below analyst expectations to fuel a rebound in stocks Friday.

Futures traders seem to be betting lightly on that Friday rebound, with the Dow Jones Industrial Average future trading up 30 points, the S&P500 future up 2.1 and the NASDAQ future up 2 points. Asian stocks were flat to up Friday, the Nikkei down 0.08% and the Hang Seng up 2.35%. Oil is up slightly, but still below the $45 mark and gasoline still below 99 cents. The dollar is up against the yen. The dollar is down against the Canadian dollar, euro and pound, but by less than 1/10 of a percent.

Yesterday's Economic Numbers

Factory Orders - October 2008

New Orders: $407.4 billion

Monthly Change: Down 5.1%

Jobless Claims - December 4, 2008

Initial Claims: 509,000

Change from Last Week: Down 21,000

Money Supply - December 4, 2008

M2 4-Week Average: $7915.0 billion

M2 Annual Change (Unadjusted): $540.5 billion

Monster Employment Index - November 2008

Index: 143

Monthly Change: Down 7

Year-to-year Change: Down 40 Points

The best sign yet - Record jump in mortgage applications

The Mortgage Bankers Association reported a record weekly increase in
mortgage applications as rates fell on long term Fixed Rate Mortgages
(FRM) last week. Freddie Mac reported rates down for the week ending
December 3, as well, though the rates were higher than the MBAA
reported rates from the week ending November 28, possibly indicating a
minor increase in rates early this week.

Another round of rate drops from Europe, Britain

The European Central Bank and Bank of England both cut rates for the second month in a row.
The Bank of England cut rates by 1%, following a 1.5% cut last month
and the European Central Bank cut by 0.75% on top of a 0.5% cut.

UK Leading Index down more than 4% in 4 months

UK leading economic indicators piled on the bad news for the future with a 1.7% drop in October, following drops of 0.7%, 0.6% and 1.1% the previous three months. The coincident index continued to hang on with another 0.1% increase.

What I'm reading this morning

Fed Weighs Options as Europe Cuts Rates

The Fed is considering taking unconventional steps to
revive the economy as central banks outside the U.S. cut rates more
aggressively.

Housing Market Faces Broader Ills

Treasury's proposal to push down mortgage rates is raising
the housing industry's hopes but won't cure all the woes that have
curtailed sales.

China, U.S. Agree to Counter Credit Crisis, Pledge $20 Billion for Trade China and the U.S. pledged $20 billion
to fund trade and agreed to deepen financial ties, stepping up
efforts to counter the credit crisis in their final economic
talks before President-elect Barack Obama takes office.

Lawmakers Dodd, Frank Warn Paulson May Not Get Second Half of TARP Money Two top U.S. lawmakers warned
Treasury Secretary Henry Paulson that he may not get the second
half of the $700 billion financial rescue fund, joining
Republicans upset with how the program is being managed.

Trichet Under Pressure to Give Deflation Plan as Rates Get Closer to Zero European Central Bank President Jean-
Claude Trichet is under pressure to outline a plan to revive the
euro region’s economy should he be “trapped” into pushing
interest rates closer to zero.

Pimco Sees Pound Bottom as BOE Cuts Rate to Lowest Level Since Churchill The Bank of England’s third interest-
rate cut since the start of October is raising speculation that
the pound’s 26 percent slide may be coming to an end.

Payrolls in U.S. Probably Fell by Most in 26 Years as Recession Deepened U.S. employers probably cut jobs in
November at the fastest pace in a quarter century as the yearlong
recession engulfing the world’s largest economy deepened,
economists said before a report today.

Japan May Allow Tax Breaks on Profits Returned From Abroad to Spur Economy Japan may introduce legislation that
would waive taxes companies pay on profits returned from abroad,
in an effort to help the economy emerge from a recession.

Sarkozy Morphs from `President Bling-Bling' to Champion of Working Class At 4 a.m. on Sept. 30, as the
collapse of Lehman Brothers Holdings Inc. was shaking up
investors on six continents, President Nicolas Sarkozy convened
an emergency meeting at the Elysee Palace in Paris to broker the
bailout of French-Belgian bank Dexia SA. For an hour, he grilled
Finance Minister Christine Lagarde and Bank of France Governor
Christian Noyer on the terms of the 6.4 billion euro rescue
plan, says François Perol, Sarkozy’s economic adviser.

Bank of Japan Struggles in Attempt to Revive Business Loans: Chart of Day Japanese lenders have shrugged off
central bank Governor Masaaki Shirakawa’s attempts to revive
loans to businesses, as a year-end funding crunch drove
borrowing costs to a record high.

Philippine Inflation Eases to Six-Month Low; May Allow Interest-Rate Cut Philippine inflation slowed to a six-
month low in November as food and fuel prices eased, giving the
central bank room to cut interest rates to boost economic growth.

Dutch November HICP Below ECB's Inflation Target Again: Table of the Day Following is a summary of the November
CPI report from the CBS in Voorburg:

German economy could shrink 4 pct in 2009-D. Bank

BERLIN, Dec 5 (Reuters) - The German economy, Europe's
largest, could shrink by up to four percent next year, Deutsche
Bank chief economist Norbert Walter said in comments published
on Friday.

Morning Economics News - December 4, 2008

2008-12-03T23:32:00.000-08:00

US stocks did a long term about face Wednesday, focusing on good news from the housing market for the first time in months. Positive housing indicators have come out several times since August and the market has not even paused in freefalls those days. Unfortunately, the market chose to ignore very bad news on employment from two sources, the ADP Employment Report and Challenger Job Cut Report, that could point to a bad jobs report Friday from the Labor Department. On the plus side for jobs, the ADP report showed a smaller drop by 50,000 jobs than the consensus estimate for Friday's report, but ADP has been underreporting for several months compared to the Labor Department numbers. There's room for a small upside surprise Friday, but that "upside" is a loss of 250,000 jobs and Goldman Sachs is forecasting the other direction - 400,000 lost jobs.

Stocks fell in Tokyo (1%) and Hong Kong (0.39%) while US stock market futures are down about 1.2%. Oil is down another 2.5% with gasoline a penny above the $1 mark. The dollar is up against the Canadian dollar, euro and pound, down against the yen.

Early Thursday the ECB and Bank of England will make interest rate announcements, widely expected to be cuts, a prospect which could be driving weakness in the euro and the pound.

Oil inventories drop slightly, above average for season

Crude oil inventories fell by 400,000 barrels last week, but that tells
only a small part of the story. Inventories are very near the top of
the average range in absolute terms – number of barrels – and inventory
drops are expected in this season. But even that
is only part of the story, as consumption is down. So, in terms of days
of supply, crude oil inventory levels are actually well above average
for this time of year.

ADP Employment Report - November 2008

Total Nonfarm Private Employment: 115,526,000

Monthly Change: Down 250,000

Beige Book - December 3, 2008

Commercial real estate: weakened broadly

Economic activity: weakened in all districts

Help Wanted Online Data Series - November 2008

Monthly Change: Down 70,200 (Not seasonally adjusted)

Year-to-year Change: Up 296,600

ISM Nonmanufacturing Report on Business - November 2008

NMI/PMI: 37.3

Reading above 50 represents growing activity

Change: Down 7.1

Weekly Mortgage Applications Survey - December 3, 2008

Market Composite Index: 857.7

Change: Up 112.1%

Purchase Index: 361.1

Change: Up 38%

Downturn Spares Few Areas of U.S.

Economic activity is weakening across the U.S., a Fed
survey shows, with few sectors or regions spared from the deepening
downturn.

China, U.S. to Counter Financial Crisis as `Most Pressing Task,' Wang Says China and the U.S. must work to
counter the global financial crisis as their “most pressing
task,” Chinese Vice Premier Wang Qishan said as the nations
started talks in Beijing today.

Indonesia Unexpectedly Lowers Key Interest Rate to Bolster Economic Growth Indonesia’s central bank unexpectedly
lowered interest rates for the first time in a year to shield
its economy from the global recession.

Japan Capital Spending Falls at Fastest Pace in Six Years as Exports Slide Japanese businesses cut investment at
the fastest pace in six years last quarter as the global
financial crisis darkened the outlook for exports.

Bank of England May Cut Rate to Lowest Since 1951, Requiring New Toolkit The Bank of England may cut interest
rates to the lowest since 1951 today, bringing them closer to
zero and challenging officials to find new tools to head off the
threat of deflation.

Thailand's Credit Rating Outlook Cut at Moody's After Prime Minister Quits Thailand's rating outlook was
downgraded to ``negative'' by Moody's Investors Service, which
joined Fitch Ratings and Standard & Poor's Ratings Services in
cutting the outlook this week amid local political turmoil.

Paulson Considers New Plan to Revive Housing by Pushing Down Lending Rates Treasury Secretary Henry Paulson is
considering a new plan to reduce mortgage rates in another bid
to revive the U.S. housing market, a government official said.

Japan Imperils Economy by Easing Bank Rules, Says Former Chief Regulator Japan’s government is leading the
nation’s banks and economy into a crisis worse than that in the
U.S. by softening rules and encouraging lenders to make risky
loans, the country’s former top regulator said.

ECB May Deliver Most Aggressive Interest-Rate Cut Yet as Economy Worsens The European Central Bank may be
forced to deliver the most aggressive interest-rate cut in its
10-year history as the economic slump deepens.

Australia's Trade Surplus Widens to Record in October: Table of the Day Following is a table of Australia’s balance of
trade figures for October as provided by the Australian Bureau of Statistics
in Sydney.

Japan capex data signals downward revision in GDP

BoE seen slashing rates to 2 pct as economy dives

Goldman Sachs now sees loss of 400,000 jobs in November

Morning Economic News - December 3, 2008

2008-12-03T01:00:00.001-08:00

Asian stock markets perked up a bit Wednesday with gains of 1.36% in Hong Kong and 1.79% in Tokyo. US stock market futures are pointing to a down open, off 1% overnight. Oil prices are up half a percent, giving back a fraction of the Monday/Tuesday drop. The old "flight to quality" appears to be in play again as the dollar is up strongly against the euro, pound and Canadian dollar, down less than a tenth of a percent against the yen.

PNC CHRISTMAS PRICE INDEX - Christmas 2008

PNC Christmas Price Index 2008: $21,080

Change: Up $1,573

Percent Change: Up 8.1%

Core Index (Excluding Swans-a-swimming): Up 1.1%

Price Data Clear Path for Rate Cut

Euro-zone
producer prices fell at their fastest rate on record in October, paving
the way for the ECB to cut interest rates again this week.

EU to Issue Guidelines on Bank Aid

The EU will issue guidelines this month for governments
planning to give money to their banks to support the wider economy,
Kroes said.

Thailand Lowers Benchmark Rate More Than Forecast as Protests Hurt Economy Thailand’s central bank cut its
benchmark interest rate for the first time in 17 months to
support an economy hurt by domestic political turmoil and the
global recession.

U.K. Consumer Confidence Falls to Lowest Since 2004 as Banks Curtail Loans U.K. consumer confidence deteriorated
in November to the weakest in at least four years as
unemployment jumped and banks curtailed credit, Nationwide
Building Society said.

Australian Quarterly Economic Growth Slows to 0.1%, Weakest in Eight Years Australia’s economy grew last quarter
at the weakest pace in eight years as household spending stalled,
increasing pressure on the central bank to add to the biggest
round of interest-rate cuts since a recession in 1991.

India May Increase Spending, Lower Interest Rates After Terrorist Attacks India may boost public spending,
increase export incentives and cut interest rates to support the
economy after the country’s worst terrorist attack in 15 years
last week undermined investor confidence, economists said.

Russian Service Industries Contracted Most on Record Last Month, PMI Shows Russian service industries ranging from
banking and telecommunications to supermarkets shrank in November
by the most on record as the global financial crisis deepened, VTB
Bank Europe’s gauge of industry performance showed.

Pakistan Promises IMF to Raise Interest Rates If Foreign Reserves Tumble Pakistan’s central bank promised the
International Monetary Fund as part of a $7.6 billion bailout
that it will increase interest rates further if the nation’s
foreign reserves drop too low.

Service Industries in U.S. Probably Shrank at Faster Pace as Sales Slumped U.S. service industries probably
contracted in November at the fastest pace on record, sinking
the economy deeper into what may become the worst recession in
decades, economists said before a report today.

Australia Has Scope for More Rate Cuts, Former RBA Chief Macfarlane Says Australia has room to lower interest
rates further and increase government spending to support the
economy amid the current global crisis, former central bank
Governor Ian Macfarlane said.

Finland May Cut 2009 Growth Forecast to Under 0.5%, Finance Minister Says Finland may lower its economic-growth
forecast for next year as the euro region as a whole is already
in a recession, Finance Minister Jyrki Katainen said.

Australia's Economy Expands 0.1 Percent in Third Quarter: Table of the Day Following is a summary of Australia’s key
GDP figures for the third quarter, seasonally adjusted, released by the
Australian Bureau of Statistics in Sydney.

Morning Economic News - December 2, 2008

2008-12-02T02:22:00.000-08:00

A little reported but important factor driving yesterday's slaughter on Wall Street was bad news from China. While there was plenty of reporting on a drop in the US Purchasing Managers Index, much less attention was paid to the fact that the same index for China, perhaps the second most important engine of global growth, also dropped sharply. The message from the stock market was clear - there needs to be a trend of solid good news on economic fundamentals for the roller coaster to stop and the market may yet have more bottoms to test when the news is bad. (Fundamentally, Dow 6500-7000 would represent such a cheap market that major players would have to look seriously at trading in the safest assets - Treasury securities and the highest rated investment grade bonds - for stocks.)

Overnight Asian stocks took a serious beating with the Hang Seng down almost 5% and the Nikkei down more than 6%. US stock futures are up about 1% at this hour [5:19 AM Eastern]. The dollar is down against the yen, euro and Canadian dollar, up against the pound. Oil prices have added another 2.5% drop to yesterday's 9.46% drop to put the NYMEX futures contract at $48.03/barrel.

Construction Spending - October 2008

Total Construction Spending: $1,072.6 billion

Monthly Change: Down 1.2%

Year-to-year Change: Down 4.7%

Manufacturing Report on Business - November 2008

Purchasing Managers Index (PMI): 36.2

50+ represents growing economic conditions

Monthly Change: down 2.7

Trouble in China

Over dinner last week, economic Nobelist Robert Mundell, who advises
the Bank of China and travels there every other month, told me the
Chinese economy is in bad shape. As a bulwark for the global economy,
the China card is fast turning unreliable. Not only are stocks falling
everywhere else in response to this disappointing China news, but
commodity prices like palladium, silver, gasoline, oil, and gold are
all plummeting today. I’ve only seen one news story that reported on
this China economic decline, but I’m convinced it’s the main factor
behind the U.S. stock drop.

Bad Economy Could Cause China Crackup

Let's remember that China a) has been -- along with America -- one of
the primary engines of global economic growth as well as buy of U.S.
bond...

China Is `Heart of Global Slowdown' as Property Slump Stalls Driver of GDP House prices in Shanghai, Shenzhen and
Guangzhou are plunging, and the global economy may grind almost
to a halt next year because of it.

Fed Signals Action As Slump Drags On

The U.S. recession began last December, the National Bureau
of Economic Research said. Bernanke cited actions the Fed is
considering.

Paulson: New TARP Ideas Mulled

Paulson reiterated that the Treasury Department is still
examining new ways to stabilize financial markets, stem foreclosures,
and boost the economy.

'Bernanke-san' Signals Fed Shift, Evoking Bank of Japan's Zero-Rate Policy Federal Reserve Chairman Ben S.
Bernanke signaled he’s ready to dig deeper into the central
bank’s toolkit after cutting interest rates almost as much as he
can, opening the door to a shift by policy makers this month.

Australia Cuts Rates One Percentage Point; RBA Says Policy `Expansionary' Australia’s central bank cut its
benchmark interest rate by one percentage point, extending the
biggest round of reductions since the nation was last in a
recession in 1991.

Bank of Japan Accepts More Bonds as Collateral, Keeps Key Rate Unchanged The Bank of Japan will accept lower-
grade corporate bonds as collateral for loans to banks to help
businesses get access to funds as the country’s recession deepens.

`Great Recession' May Just Be Starting as Job Losses Mount, Credit Shrinks The U.S. economy, now officially in
recession, may be in the midst of the longest slump in the post-
World War II era as job losses mount and credit dries up.

Spanish Jobless Claims Rise for Eighth Month in November, Gaining 6.1% Spain’s jobless ranks swelled for an
eighth month in November, bringing the number of new claims in
the last year to almost a million, as the country heads into its
first recession in 15 years.

Swiss Central Bank Looks for New Tools to Tackle Zero Interest-Rate World The Swiss National Bank is becoming
the first central bank in Europe to learn what it’s like to live
in a zero interest-rate world.

Retailers' Sales Rose 1.9% During Two Days After U.S. Thanksgiving Holiday Sales at U.S. retailers rose 1.9
percent in the two days following the Thanksgiving holiday,
ShopperTrak RCT Corp. said, as a decline on Nov. 29 further
damped the smallest Black Friday gain in three years.

Iceland's Crisis Sends Viking Descendants Back to Native Norway for Jobs Almost 1,200 years after Viking chief
Ingolfur Arnarson left Norway to found Reykjavik, the crisis
engulfing Iceland is forcing his descendants home.

Swiss Inflation Rate Drops More Than Expected, Follows Slide in Oil Price Switzerland’s inflation rate dropped
the most in 15 years in November as the price of oil declined,
giving the central bank more leeway to bolster the economy.

Morning Economic News - December 1, 2008

2008-12-01T00:55:00.000-08:00

US stock market futures are down just over 1% and Asian markets traded mixed Monday, the Nikkei down 1.35% and the Hang Seng up 1.59%. Oil is down more than 3% from Friday's New York close and precious metals are down about 1%. The dollar is up against the Canadian dollar, the euro and the pound, down against the yen.

Money Supply (M1 and M2) - November 28, 2008

M1 Seasonally Adjusted Prior Month: $1473.1 billion

M1 4-Week Average: $1509.4 billion

M1 Annual Change (Unadjusted): $103.8 billion

Financial Roadmap: The Week Ahead December 1 to 5, 2008

Economic indicators may not be the initial focus of markets Monday, as
Wall Street is liable to focus heavily on early reports of a 3%
increase in Black Friday retail sales, though anecdotal reports of good
sales were already coming in early enough to influence Friday's trading
and solidify an up week. With some economists seeing a fundamental
bottom for the US stock market around Dow 6,500-7,000, a level we
haven't yet reached, and some technical analysts agreeing, there may be
some profit taking early in the week in spite of the good sales figures
and that's where incoming economic indicators may play a role. Look to
the weekly Redbook retail index (Tuesday) as a possible market mover
the next several weeks as retail's big season hits high gear.

Malaysia's Growth Tops Forecasts

Malaysia's economy expanded by 4.7% in the third quarter,
faster than most analysts had expected but still its slowest rate in
three years.

Russian Manufacturing Contracts for Fourth Month to Lowest Level on Record Russian manufacturing shrank more in
November than during the 1998 financial collapse as the global
economic crisis drove output and new orders to record lows and
companies cut jobs, VTB Bank Europe said.

Chinese Manufacturing Contracts by Record, Adds to Risk of Economic Slump China’s manufacturing shrank by the
most on record and export orders plunged, adding to evidence
that recessions in the U.S., Europe and Japan are dragging down
the world’s fastest-growing major economy.

U.K. House Prices Drop to Lowest in Almost Three Years as Banks Curb Loans U.K. house prices dropped to the
lowest level in almost three years in November as banks starved
the property market of credit, Hometrack Ltd. said.

German Retail Sales Unexpectedly Drop as Recession Concerns Damp Spending Retail sales in Germany, Europe’s
largest economy, unexpectedly fell in October as the fallout
from the global financial crisis damped household spending.

India's Singh Takes Finance Portfolio as Terror Assaults Threaten Economy Prime Minister Manmohan Singh, who
opened up India to foreign investors as finance minister in the
early 1990s, must now shield the economy from the effect of
terror attacks and a global recession.

Swiss November Manufacturing Drops to a Record Low as Global Growth Stalls A gauge of Swiss manufacturing
dropped the most ever to a record low in November as companies
cut back production amid stalling global growth.

South Korea's Exports Drop By Most Since 2001 on Decline in Chinese Demand South Korea’s exports fell by the
most in almost seven years in November as shipments to China and
the U.S. slumped, adding to concern the economy will sink into
its first recession in a decade.

U.S. Output Probably Shrank at Fastest Pace in 26 Years on Spending Cuts Manufacturing in the U.S. probably
contracted in November at the fastest pace in 26 years as
consumers and companies worldwide cut spending, economists said
before reports today.

America Exports Unemployment as Slump Shrinks Consumer Demand, Investment The U.S. once exported jobs. Now, it
is exporting unemployment.

Global recession rocks Asia factories as demand fades

* Central banks in Europe, Australia to cut rates this week

BOJ downbeat on economy, meeting eyed on funding

Morning Economic News - November 28, 2008

2008-11-27T23:59:00.001-08:00

Asian stocks rose Friday and US stock market futures are up a bit under half a percent. Oil futures are down just under 1% and the dollar is up against the Canadian dollar and the yen, down against the pound and euro. [3 AM Eastern]

Durable Goods Orders - October 2008

>Nondefense Capital Goods Change: Down 3.6%

New Orders: $193.0 billion

New Orders Change: Down 6.2%

Jobless Claims - November 26, 2008

Initial Claims: 529,000

Change from Last Week: Down 14,000

4-Week Moving Average: 518,000

Personal Income and Outlays - October 2008

Personal Income: $12,214.7 billion

Monthly Change: Up 0.3%

Real Disposable Personal Income: Up 1%

Weekly Mortgage Applications Survey - November 26, 2008

Market Composite Index: 404.4

Change: Up 1.5%

Purchase Index: 261.6

Change: Up 5.3%

More downward pressure on oil prices from inventory gains

For those heating with propane a bad winter cold snap could mean much
higher prices as inventories are below average for the season. With
refinery activity up, gasoline production up and jet fuel demand still
more than 17% below year ago levels, propane is the only major
petroleum category with real short term potential for a sustained price
spike. Distillate fuel demand is below last year levels, but this
category bears watching as the inventory levels approach the lower end
of the average range and demand is down the least of the reported
products.

Euro-Zone Confidence Plunges

Business and consumer confidence in the euro zone collapsed
in November, bolstering predictions the ECB may cut its key interest
rate more than expected.

New-Home Sales Decline 5.3%

New-home sales tumbled 5.3% to the lowest level in 17 years during October, while prices kept retreating.

Japan's Recession Deepens as Factory Output Slumps, Consumers Cut Spending Japan’s recession deepened last
month as companies cut production, consumers spent less and
fewer people looked for work.

India's Economy to Weather Mumbai Terror Attacks, Avoid `Doom and Gloom' India’s economy will probably
withstand the effect of yesterday’s terror attacks in Mumbai as
rising incomes and record harvests boost consumer spending.

Japan's Inflation Rate Slows for Second Month to 1.9% as Oil Prices Tumble Japan’s inflation slowed for a
second month in October as oil and commodity prices tumbled,
providing relief to cash-strapped households in a recession.

South Korea's Industrial Production Falls for the First Time in 13 Months South Korea's industrial production
fell for the first time in 13 months in October, adding to
concern the economy is headed for its first recession in a decade.

Japanese Companies Plan to Fire 30,000 Temp Staff by March, Ministry Says Japanese companies plan to fire more
than 30,000 temporary and part-time workers before the end of the
business year as the recession deepens.

Australian Consumer-Lending Growth Slows as Rate Cuts Fail to Spur Demand Lending to Australian consumers and
businesses grew at a slower pace in October, even as the central
bank embarked on the biggest round of interest-rate cuts since a
recession in 1991.

U.K. Consumer Confidence Stays Close to 30-Year Low as Recession Deepens U.K. consumer confidence stayed
close to the lowest level in more than three decades in November
as gloom about the recession deterred spending, GfK NOP said.

Almunia Says EU to Cut 2009 Outlook to `Negative Growth' as Crisis Endures The European Union will cut its
economic forecasts to project a contraction next year as the
region continues to reel from the impact of the global financial
crisis, EU Monetary Affairs Commissioner Joaquin Almunia said.

S.Korea output buckles, analysts scent recession

SEOUL, Nov 28 (Reuters) - South Korea's industrial output
fell the most in two years in October, data showed on Friday,
suggesting the economy is slipping closer to its first
recession since the Asian financial crisis a decade ago.

Japan output slump heralds deep downturn, India slows

* Asian markets gain 6th day cheered by China action
(Repeats to additional subscribers with no change to text)
(For more stories on the global crisis, click

Morning Economic News - November 26, 2008

2008-11-25T22:56:00.000-08:00

Overnight trading is relatively calm and pointing to bit less rocky day for US stocks Wednesday. US stock market futures are down just under 1% and the Nikkei is down 1.33%. Oil is up just under 1% after closing at a low just above $50/barrel, as Russia has announced it may coordinate production cuts with OPEC to shore up prices. The US oil report due out Wednesdsay would need to show a big inventory drop or a big spike in demand, neither likely, to put real strength under what's perceived as a mostly empty threat by cash strapped Russia. The US dollar is up more than half a percent against the Canadian dollar, unusual with a runup in oil prices, down against the yen and up against the euro and the pound.

Gross Domestic Product (GDP) - 3rd Quarter 2008 Preliminary

Real Annual Growth Rate: -0.5%

Previous Quarter Rate: 2.8%

Consumer Confidence Index - November 2008

Consumer Confidence Index: 44.9

Monthly Change: Up 6.1

Expectations Index: 46.7

Monthly Change: Up 11

Fed Aid Sets Off a Rush to Refinance

The Federal Reserve's attempt to stabilize the housing
market set off a chain reaction that dropped rates and spurred a burst
of refinancing activity by borrowers eager to lower mortgage costs.

Home Prices Continue to Drop

The S&P/Case-Shiller national index and a separate FHFA
measure both showed declines in home prices in the third quarter.
Separately, builder D.R. Horton's fourth-quarter loss widened.

US consumer confidence holds at record low-ABC survey

US economy shrinks at fastest pace in seven years

Mexico's Oct trade gap biggest since at least 1991

Fed Risks `Spitting in the Wind' With $800 Billion Pledge to Thaw Lending The Federal Reserve’s new $800
billion effort to combat the financial crisis is designed to
make credit more accessible to shaken consumers who aren’t sure
they want more debt.

U.S. Consumer Confidence Rises From Record Low as Gasoline Prices Decline U.S. consumer confidence unexpectedly
rose in November from a record low as falling gasoline prices
helped alleviate concerns about rising unemployment and tumbling
financial markets.

U.S. Economy Shrinks 0.5%, Most Since 2001, as Consumer Spending Plunges The U.S. economy shrank in the third
quarter faster than previously estimated as consumer spending
plunged by the most in almost three decades.

Russia's Ikea Shoppers Threatened as Nascent Middle Class Faces Job Losses While Russia’s oligarchs have lost
hundreds of billions of dollars in the global financial crisis, a
less-noticed threat to the nation’s economy comes from 24-year-
old Georgy Mironov.

South Korea Economy Will Shrink 2% in 2009 as Exports Fall, Macquarie Says South Korea’s economy will contract
2 percent next year as exports slump amid a global economic
slowdown, Macquarie Securities Ltd. forecasts.

Singapore's Industrial Production Declines as Global Recession Cuts Demand Singapore’s industrial production
declined for the third time in four months in October as
electronics manufacturing contracted amid falling global demand.

Australia to Avoid Recession on Rate Cuts, Government Spending, OECD Says Australia’s economy will avoid a
recession next year, helped by lower interest rates, government
spending and exports, the Organization for Economic Cooperation
and Development said.

Japanese Capital Spending Will Avoid `Collapse,' Economist Nabeyama Says Japanese companies will keep
spending during the recession to remain competitive, according
to the chief economist at the Development Bank of Japan.

Morning Economic News - November 25, 2008

2008-11-25T01:15:00.000-08:00

Asian stock markets were up Tuesday, but US stock market futures are down (less than 1%) and European markets opened weak. The dollar is up against the Canadian dollar, euro, pound and most major currencies except the yen and the Korean won. Oil is down more than 2.5% from the Monday New York close. [4:15 AM Eastern]

Existing Home Sales - October 2008

Total Existing Home Sales Annual Rate: 4.98 million

Monthly Change: Down 3.1%

Year-to-year Change: Down 1.6%

Australian Leading Index suffers first drop in 7 months

Australia’s Leading Index gave back three-fourths of its August gain
with a 0.3% drop in September, while the Coincident Index was
unchanged. This was the first decline in the Leading Index for
Australia in 7 months and with 3 of the 7 leading indicators improving
Australia has some decent underlying strength in its economic picture.

Mexican Leading Index falls hard - again

Mexico’s leading indicators fell 1.9% in September after falling 0.9% in August,
while the Coincident Index was unchanged after a 0.2% drop in August.
All 6 leading indicators and 2 of the 3 coincident indicators dropped
in September.

New Facility Targets Consumer Lending

Paulson plans to announce a program to increase the availability of auto loans, student loans and credit cards.

Russia Allows Ruble to Weaken

Russia allowed the ruble to shed 1% of its value,
bolstering expectations it will conduct a staged weakening rather than
a one-off devaluation.

Obama Says U.S. Could Lose `Millions' of Jobs in 2009 Without Bold Action President-elect Barack Obama warned
that the U.S. is “trapped in a vicious cycle” and faces the
loss of “millions of jobs” unless immediate steps are taken to
stimulate the economy and to rescue the nation’s automakers.

Citigroup Bailout Charts New U.S. Course for Rescues, Adding Taxpayer Risk The U.S. government’s emergency
rescue of Citigroup Inc. offers a new model for bank bailouts:
explicitly insuring against losses on toxic assets, with
taxpayers footing the bill.

Paulson, Bernanke Said to Unveil New Plan to Shore Up Consumer Financing The U.S. Treasury and Federal
Reserve will unveil as soon as today a lending program to shore
up the consumer-finance market, using money from the
government’s $700 billion rescue, two people familiar with the
effort said.

Consumer Confidence in Germany Unexpectedly Rises on Declining Oil Price German consumer confidence
unexpectedly rose for a third month, defying the recession.

French Business Confidence Drops to 15-Year Low as Europe Enters Recession French business confidence fell to the
lowest in more than 15 years in November as the euro-region
economy slipped into a recession.

China Should Shift Focus From Exports to Domestic Demand, World Bank Says China should do more to rebalance
its economy from investment, exports and industry to
consumption and services as it rolls out a $586 billion
stimulus package, the World Bank said.

Geithner Struggled to Rally Action After Spotting Dangers of Default Swaps Timothy Geithner was among the first
policy makers to shine a light on the unregulated $47 trillion
credit-default swap market back in 2005. The New York Federal
Reserve president has struggled since then to get dealers to
carry out reforms.

Brown Takes U.K. `Back to the 70s' With Plans to Tax Rich, Increase Debt Prime Minister Gordon Brown swept
aside three decades of economic orthodoxy with tax increases on
the rich and plans that will double Britain’s national debt.

Panama Sept economic activity up 8.24 pct yr/yr

US existing home sales fall, buyers sidelined

Morning Economic News - November 21, 2008

2008-11-20T19:37:00.000-08:00

Early indications in overnight trading [10:30 PM Eastern] are that there may be some relief on Wall Street Friday after two bad down days, with US stock market futures up a bit under 1%. Asian stock indexes are down 2 to 3% and oil has fallen another 1.5% since the New York close. The dollar is trading up against the yen, down against the euro, pound and Canadian dollar.

Update: 3 AM Eastern
US stock market futures are up more than 3% and Asian stocks are trading up. The Nikkei is up 2.7%, the Hang Seng is up 3.54% and the S&P/ASX 200 is up 1.90%. NYMEX crude futures are up 1.5%, putting the price back just over $50/barrel and gasoline futures back above $1. The dollar is now down 1.5% against the Canadian dollar, up 1.4% against the yen and down against the euro and the pound.

Here's the latest economic news from Thursday:

Jobless Claims - November 20, 2008

Initial Claims: 542,000

Change from Last Week: Up 27,000

4-Week Moving Average: 506,500

Leading Index (US) - October 2008

Leading Index: Down 0.8%

Coincident Index: Up 0.2%

Lagging Index: Up 0.1%

Money Supply (M1 and M2) - November 20, 2008

M1 Seasonally Adjusted Prior Month: $1473.1 billion

M1 4-Week Average: $1496.3 billion

M1 Annual Change (Unadjusted): $103.6 billion

Foreclosure freezes announced amid mixed housing news

The housing news this week has been a mixed bag, with good news on
interest rates and a decline in new housing starts offset by a drop in
new mortgage applications and with Freddie Mac and Fannie Mae following
the lead of Citigroup, JP Morgan Chase and Bank of America in
announcing a foreclosure freeze.

Avoiding Foreclosure

There are lots of scams out there targeting homeowners in trouble
with their mortgages. While a legitimate sale is certainly the simplest
way to avoid foreclosure, there are, unfortunately, many con men
willing to take advantage of desperation and leave the struggling
homeowner worse off than they were before.

Fannie, Freddie Halt Foreclosures

Fannie and Freddie suspend foreclosure sales and evictions
on certain properties until January as it prepares for its
loan-modification program.

China Worries About Rising Job Losses

Chinese officials said unemployment has worsened and conditions will deteriorate until the second quarter of 2009.

New England Faces Big Downturn

New England is headed for a "significant recession" that
will strip the region of 250,000 jobs, or about 3.6 % of its
employment, economists said.

U.S. Jobless Claims Approach Highest Level Since 1982 as Recession Deepens The number of Americans filing for
unemployment benefits approached a 26-year high, and a gauge of
the economy's future performance dropped, sending yields on
benchmark Treasuries to record lows.

Singapore Lowers 2008 Growth Forecast; Says Economy May Contract Next Year Singapore lowered its growth
forecast for a fourth time this year and said the economy may
contract in 2009, prompting policy makers to implement more
measures to avoid a prolonged slowdown.

Leading Indicators in U.S. Decline More Than Forecast as Recession Deepens The index of leading U.S. economic
indicators fell in October for the third time in four months as
stocks and consumer confidence plunged, signaling a deepening
recession.

Shirakawa May Signal Bank of Japan's Reluctance to Revive Zero-Rate Policy Bank of Japan Governor Masaaki
Shirakawa will probably signal today that he's reluctant to
return interest rates to zero because the policy may discourage
lending rather than promote it.

Japan Economy Headed for Longest Slump Since Banking Crisis, Analysts Say Japan's economy will probably shrink
this year and next in the first back-to-back contractions since
the onset of the banking crisis a decade ago, economists say.

Swiss Central Bank Unexpectedly Lowers Benchmark Rate by 100 Basis Points Switzerland's central bank lowered
its benchmark interest rate by an unprecedented percentage point
after the economic growth outlook worsened.

Federal Reserve's Commercial-Paper Buying Rises; Cash Loans to Banks Drop The Federal Reserve expanded
commercial paper purchases from U.S. corporations, increasing
holdings by $13.5 billion, or 5.2 percent, while cash borrowing
by banks and Wall Street bond dealers declined.

South Korea Economy May Shrink for First Time Since 1998 Crisis, UBS Says UBS AG forecast South Korea's
economy will shrink 3 percent in 2009, which would be the first
contraction since the country's financial crisis in 1998.

EU Officials Craft Coordinated Economic-Stimulus Plan to Combat Recession The European Union is crafting a
coordinated economic-stimulus package to spur its 27-nation
economy based on contributions by each EU government.

No relief seen in global economic crisis

* Deflation feared

M-2 money supply up $29.6 bln Nov 10 week

NEW YORK, Nov 20 (Reuters) - U.S. M-2 money supply rose by
$29.6 billion in the November 10 week to $7,907.1 billion, the
Federal Reserve said on Thursday

Morning Economic News: Your Overnight Crisis Watch - November 20, 2008

2008-11-19T23:45:00.001-08:00

Early indications are that Thursday won't bring much improvement in the stock market, as US stock index futures are down 1.5 to 2% and Asian stock markets are down 5 to 7%. [2:43 AM Eastern] NYMEX crude futures are flirting with $52/barrel and Brent crude spot prices are barely above $48. The dollar is down against the yen and euro, up against the pound and Canadian dollar.

Consumer Price Index (CPI) - October 2008

CPI-U: 216.573

Monthly Change: Down 1.0%

Year-to-year Change: Up 3.7%

Core CPI-U: Down 0.1% [Seasonally adjusted]

Federal Open Market Committee Minutes - October 29, 2008

Given the recent intensification and broadening of the global financial
crisis, FOMC participants viewed the outlook for economic growth and
employment as having worsened significantly since June.

Housing Starts - October 2008

Housing Starts: 791,000

Monthly Change: Down 4.5%

Year-to-year Change: Down 38%

Weekly Mortgage Survey - November 20, 2008

Market Composite Index: 398.6

Change: Down 6.2%

Purchase Index: 248.5

Change: Down 12.6%

US oil production to grow 8% next year

Demand does continue to lag, with total products supplied down 7%
compared to the same 4-week period in 2007 and jet fuel supplied down
more than 20%.

Fed Minutes Paint Gloomy Picture

The Fed expects economic contraction for up to a year, and worries the slowdown could last longer, according to FOMC minutes.

Consumer Prices Sink Amid Slump

U.S. consumer prices fell 1% in October from September,
their largest monthly decline since World War II. The drop adds to
deflation concerns.

Japan's Exports Fall the Most in Six Years as Global Recession Intensifies Japan's exports declined at the
fastest pace in almost seven years in October as the
intensifying global financial crisis stifled sales of cars and
electronics.

Bernanke May Find Deflation `Back on the Table' as Threat to U.S. Economy Five years after Federal Reserve
Chairman Ben S. Bernanke helped stamp out the risk of deflation,
the threat is returning as the financial crisis and a worsening
economic slump pull inflation lower.

Consumer Prices in U.S. Decline 1%, Most on Record, as Fuel Costs Tumble The cost of living in the U.S. fell
by the most on record and construction began on the fewest homes
ever last month, evidence the economy is in the worst recession
in at least a quarter century.

India Inflation Slows to 5-Month Low, Giving Room for Cut in Interest Rate India's inflation unexpectedly
slowed to a five-month low, giving the central bank room to
reduce borrowing costs to shore up a slowing economy. Bonds rose.

Singapore Economy Probably Shrank, Adding Pressure For Stimulus Policies Singapore's economy probably shrank
last quarter as a manufacturing slump and easing demand for
financial services drove the nation into its first recession
since 2002, adding pressure on policy makers to stimulate growth.

South Korea Likely to Cut Interest Rates Further, State-Run Institute Says South Korea's central bank is likely
to cut interest rates further to protect the economy from the
global slowdown, according to the head of the Korea Development
Institute.

EU Preparing $164 Billion Package to Bolster Region's Growth, Germany Says The European Commission is working
with the 27 EU states on a 130 billion-euro ($164 billion)
package to bolster the region's economy amid recession, according
to German government officials.

Vietnam Cuts Key Rate to 11% to Protect Economy Against Global Slowdown Vietnam cut the benchmark interest
rate for the third time in a month to protect the economy
against the global financial crisis.

Fed to Cut Rates to Zero in January on Deflation Risk, JPMorgan Predicts The U.S. Federal Reserve will
probably cut interest rates to zero percent over the next two
months to staunch deflation, according to JPMorgan Chase & Co.

Weak Japan exports pile on gloom, shares plunge

Foreign investors sold Japan stocks last week

Morning Economic News - November 19, 2008

2008-11-19T01:50:00.000-08:00

Things are shaping up for a down open on Wall Street with US stock market futures down 1.5% from the Tuesday close and the Hang Seng, Nikkei and S&P/ASX 200 all down from 2/3 to 3/4 percent. NYMEX Crude oil futures are down 69 cents/barrel (1.27%) and Brent Crude spot prices are near $48/barrel. The US dollar is up against the Canadian dollar and the euro, down against the yen and the pound. [4:49 AM Eastern]

Housing Market Index - November 2008

Current Month Index: 9

Monthly Change: Down 5

Current 1-Family Sales Index: 8

Producer Price Index - October 2008

Finished Goods Index: Down 2.8%

Finished Goods Core: Up 0.4%

Finished Goods Annual Change: Up 5.2%

State Street Investor Confidence Index - November 2008

Global Index: 57

Monthly Change: Down 1.4

Year-to-year Change: Down 18.8%

Treasury International Capital - September 2008

Foreign purchases of Long Term US Securities: $30.9 billion

Official purchases: -$4.8 billion

Private purchases: $35.7 billion

Home-Builder Index Plunges to New Low

Home builders' confidence in the market plunged to a record
low amid overwhelming uncertainty about the economy. Meanwhile, resale
prices fell in four out of five U.S. cities in the third quarter.

ECB Stays Course on Pace of Easing

Amid fresh data confirming a euro-zone recession, the
European Central Bank faces criticism that it is cutting interest rates
too slowly.

Medvedev Warns Crisis Is Spreading

Russia's president pledged to use the Kremlin's oil wealth
to help stricken industries, saying the financial crisis has spread to
the real economy.

Russia Suffers Plummeting Reserves in Defense of Ruble as Growth Declines Russia's foreign-exchange reserves
are draining fast and may take almost a decade of economic
stability with them.

Australian Rate Cuts, Government Spending Will Buffer Economy, Edey Says The biggest round of Australian
interest-rate cuts since a recession in 1991 and government cash
handouts will cushion the economy against slower global growth
and falling commodity prices, a central bank official said.

Bernanke's Cash Injections Risk Eclipse of Fed's Benchmark Interest Rate The Federal Reserve's efforts to
rescue the U.S. from financial collapse risks the eclipse of
the central bank's benchmark interest rate as the most important
signal of monetary policy.

Spain Consumption Shrinks as Economy Heads Into First Recession Since 1993 Spanish household spending fell in
the third quarter as the global credit crunch combined with the
collapse of a domestic housing boom to edge Spain toward its
first recession in 15 years.

ECB's Trichet Says World Suffering Worst Financial Crisis of Postwar Era European Central Bank President Jean-
Claude Trichet said the world is experiencing its worst financial
crisis since the aftermath of World War Two.

US non-residential construction index falls-AIA

Japan Sept all-industries index -0.1 pct mth/mth

U.S. consumer confidence falls to record low -ABC

US home builder sentiment at new low, buyers demur

Morning Economic News - November 18, 2008

2008-11-18T00:33:00.000-08:00

Asian stock markets traded down Tuesday, while US stock market futures are down a fraction of a percent [3:30 AM Eastern]. The Nikkei was down more than 2%, while the Hang Seng was down more than 5%. Oil is up 1%. The dollar is up against the Canadian dollar, the yen and the euro; down against the pound.

Empire State Manufacturing Survey - November 2008

Business Conditions Index: -25.4

Monthly Change: Down 0.8

New Orders Index: -22.2

Industrial Production - October 2008

Industrial Production Index: 107.3

(Base year 2002, Seasonally Adjusted)

Monthly Change: Up 1.4 (1.3%)

Manufacturing Change: Up 0.6%

Paulson: New Rescue Efforts Unlikely

Paulson, in an interview, said he prefers to use the
remaining funds from the $700 billion rescue for emergencies rather
than new programs.

Chidambaram Says India's Economic Growth to `Bounce Back' to 9% Next Year India's economy will ``bounce back'' to
9 percent growth next year as local demand holds up amid a global
recession, Finance Minister Palaniappan Chidambaram said.

Paulson Says `Good Bit' Needed for Economy; Summers Urges 3-Year Stimulus U.S. Treasury Secretary Henry
Paulson and two of President-elect Barack Obama's top economic
advisers agreed that further steps are needed to shore up the
economy, while clashing over tax policies.

Nakagawa Says Japan May Consider Further Steps to Jolt Economy From Slump Japan's government may consider
further measures to jolt the economy out of a recession, Finance
Minister Shoichi Nakagawa said.

U.S. Industrial Output Rises More Than Forecast as Oil Refineries Recover Industrial production rebounded in
October after refinery shutdowns from Gulf Coast hurricanes
caused the biggest drop since 1946 the month before.

Japan's `Least Ugly' Economy May Outpace U.S., Europe in Financial Crisis Japan's newly declared recession may
be a chance to show that the world's second-largest economy can
finally outperform the U.S. and Europe.

Bank of Japan May Seek `Double Impact' When Selling Yen, BNP Paribas Says The Bank of Japan may seek the
``double impact'' of supporting exporters and increasing money
supply by selling its own currency without absorbing funds after
the intervention, BNP Paribas Securities Japan Ltd. said.

Chinese Manufacturers May Suffer as Lenders Channel Money to Public Works China's small manufacturers are
likely to be starved of cash even after the government directed
banks to increase lending as part of its 4 trillion yuan ($586
billion) plan to buoy the economy.

Crude Oil Rises as U.S. Industrial Production Gain May Raise Fuel Demand Crude oil rose from a 21-month low
after U.S. industrial production gained, increasing expectations
that fuel demand may improve in the world's largest consumer.

Forecasters: US in 14 month recession, Q4 looks rough

Morning Economic News - November 17, 2008

2008-11-17T00:50:00.000-08:00

US stock market futures are up under 1%, while Asian markets are mixed - the Nikkei up 0.3% and the Hang Seng down 1%. Oil is down 2% on news that China's demand has contracted sharply since the financial crisis onset. The dollar is down against the Canadian dollar, pound and euro, up against the yen.

Import Export Price Indexes - October 2008

Import Prices: Down 4.7%

Non-petroleum Import Prices: Down 0.9%

Export Prices: Down 1.9%

Retail Sales - October 2008

Total Retail and Food Service Sales: $363.7 billion

Monthly Change: Down 2.8%

Annual Change: Down 4.1%

Financial Roadmap: The Week Ahead November 17 to 21, 2008

With the big G-20 financial summit happening over the weekend, the
first part of the week will see markets largely moving on the basis of
political news. From there, interest will move to the industrial
production figures and the Empire State Manufacturing Survey as
manufacturing has started to show the effects of the downturn with
increased exports unable to offset badly lagging auto sales and exports
themselves starting to drop.

U.K. Jobless Likely to Grow

British business groups warned the country's recession will
be worse than previously expected, driving up unemployment to nearly 3
million by 2010.

G-20 Leaders Tighten Their Grip on Banks

Global leaders ordered a clampdown on reckless market
behavior, including steps they said would help prevent the next credit
crisis.

Japan's Economy Slides Into First Recession Since 2001; GDP Shrinks 0.4% Japan's economy, the world's second
largest, entered its first recession since 2001 last quarter and
the government and economists say conditions may get even worse.

G-20 Plan for Tighter Financial Rules Signals Smaller Profits After Crisis Leaders of the world's biggest
developed and emerging nations put banks and investors on notice
they will need to hold more capital and reveal more about their
holdings, signaling the industry may emerge from the current
crisis with less potential for profit.

FDIC May Alter $1.4 Trillion Debt-Insurance Program After Banks Complain The Federal Deposit Insurance Corp.
may revise a $1.4 trillion debt-insurance program to address
complaints that it would spur an exodus from the $250 billion
market for overnight loans between banks.

Factory Output in U.S. Probably Rose in October on Rebound From Hurricanes U.S. industrial production probably
rose in October as work at Gulf Coast refineries rebounded from
shutdowns following Hurricanes Gustav and Ike, economists said
ahead of a government report today.