Morning Economic News - December 16, 2008

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.