Morning Economic News - January 20, 2009

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.