Morning Economic News - December 8, 2008

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.