Morning Economic News - December 30, 2008

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.