Quick Overview

• U.S. existing home sales were at an annual rate of 4.74 million units, up 6.5% MoM, stronger than expected
  

• U.S. leading indicators rose 0.3% in December, stronger than expected.
  

• USDA reports cattle on feed down 7.1% YoY as of January 1st.
  

• Iceland's government collapsed, days after its prime minister called for early elections amid popular anger over a financial crisis that has gutted the economy.
  

• Pfizer agreed to pay $68 billion to acquire Wyeth in the largest pharmaceutical deal in a decade.

• China-Japan November's container trade down 15%

• Argentina's president declared an agricultural emergency Monday in the nation's breadbasket provinces, responding to a key demand by powerful farm organizations amid the worst drought in decades... In some areas, officials say it is the worst drought since the 1930s. Winds across the pampas are whipping up once-fertile soil that has turned to sand.
  Weather forecasts for Argentina are for a continuation of the hot and dry pattern.

• Australia’s sentiment index rose 10 points to minus 20 from November.

• Ex Lehman Brothers chief Dick Fuld has sold his 13m £9.3m Florida mansion to his wife for $100.

• Citibank has new Taxpayer funding so they decide they need a new corporate jet to replace their old one.
  

Bad news: we're back to 1931. Good news: it's not 1933 yet
It is worth glancing at the
front page of New York Times on Monday March 6, 1933 to see what the world looked like three days after Franklin Roosevelt moved into the White House. (http://www.sharelynx.com/chartsfixed/1NYTGold
Embargo4633.gif).

The newspaper splashed with the story that FDR had closed the US banking system – invoking the Trading with Enemies Act – and ordered the confiscation of private gold. From left to right, the headlines read: "Hitler Bloc Wins A Reich Majority, Rules Prussia"; "Japanese Push On In Fierce Fighting, China Closes Wall, Nanking Admits Defeat"; "City Scrip To Replace Currency"; "President Takes Steps Under Sweeping Law of War Time"; "Prison For Gold Hoarders".

Asian Stocks Rise as Shippers Advance on Fees; Contractors Drop
The Baltic Dry Index, a measure of shipping costs for commodities, gained 3.7 percent amid rising demand for iron ore. On Jan. 23, nickel futures jumped 10 percent, copper surged 5.4 percent and gold futures added 6.7 percent.

Bet against a sovereign government if you dare
That’s an opening the size of the Gotthard Tunnel for any government that decides it doesn’t like a bunch of rootless cosmopolite speculators borrowing its bonds for the purpose of short selling. Say.

Biblical debt jubilee may be the only answer
There is no guarantee that the measures will succeed. The vast scale of government borrowing may exhaust the stock of global capital. Markets are already beginning to question the credit-worthiness of sovereign states. The Fed may find it harder than it thinks to disengage from colossal intervention in the bond markets

When markets turn
GEORGE SOROS, one of the original hedge-fund managers, believes that every boom in the making is tested. Often the potential bubble succumbs and is forgotten. If it survives, the market’s misplaced faith is redoubled. That, Mr Soros says, is when things become dangerous.

Quick Overview

• (Reuters) President Barack Obama said on Friday he expected an $825 billion economic recovery plan to be approved by his target of mid-February.
  

• California's unemployment rate rose to 9.3 percent in December
  

• The USDA said that frozen pork in storage rose 20% YoY
  

• U.K. GDP fell 1.5% QoQ but rose 0.7% YoY
  U.K. retail sales rose 1.8% YoY
  

• Canada’s consumer prices rose 1.2% YoY
  

• Japan Nov All Industry Index fell -2.3% from -0.5%
  

• Australia 4Q Import Price rose 10.8% from 5%; Export Price rose 15.9% from 13.8%.
  

• A new measure to pay owners of old cars €2,500 to junk their wrecks and buy something new has proven popular in Germany.
  

Merrill Lynch CEO Thain Spent $1.22 Million On Office
Area Rug $87,784
Mahogany Pedestal Table $25,713
19th Century Credenza $68,179
Pendant Light Furniture $19,751
4 Pairs of Curtains $28,091
Pair of Guest Chairs $87,784
George IV Chair $18,468
6 Wall Sconces $2,741
Parchment Waste Can $1,405
Roman Shade Fabric $10,967
Roman Shades $7,315
Coffee Table $5,852
Commode on Legs $35,115

Quick Overview

• U.S. jobless claims rose 62,000 to 589,000.
  

• U.S. housing starts fell 15.5% MoM and 33% YoY.
  

• Canada’s retail sales fell 2.4%
  

• The U.S. Department of Energy said:
  Supplies of that crude oil rose 6.1 million barrels to 332.7 million
  Supplies of gasoline rose 6.5 million barrels
  Supplies of heating oil fell 1.4 million barrels.
  Refinery use fell from 85.2% to 83.3%.
  Gasoline demand fell 1.6% YoY
  Distillate demand fell 2.6% YoY.

Quick Overview

• U.K. unemployment rate rose to 6.1% from 6.0%
  

• Canada’s wholesale sales fell 1.6% in November.

• Brazil cut interest rate a full point to 12.75%

• YoY China's gross domestic product grew 6.8% in Q4 -- slowest in seven years.
  
  

• YoY Japan’s exports fell 35% -- sharpest decline since 1980
  

• South Korean GDP shrinks 3.4% QoQ
  

• The forecast for Argentina remains hot and dry next five days
  

• The National Weather Service issued a hard freeze warning for central Florida on Thursday morning.
  

• Indian gold imports for 2008 fell by 47%.
  

• The level of idle containerships has risen to 255 -- 5.5% of the global fleet, a historic high.
  

Options on Eurodollars to Let Traders Bet on Negative Rates

This is sensible contingency planning as you don’t want to be caught out by something that might in other times seem impossible or unexpected,” said Nick Parsons, head of markets strategy in London at NabCapital, a unit of National Australia Bank Ltd., the country’s largest bank. “We’re in an era now where the return of capital is more important than the return on capital.”

Stock markets often decline on inauguration day
I will say, however, that sentiment in recent days has finally taken steps in the right direction. The Hulbert Stock Newsletter Sentiment Index (HSNSI) dropped nearly 17 percentage points on Tuesday, bringing this sentiment benchmark to below where it stood at the Nov. 20 market low

UK cannot take Iceland's soft option
Britain has foreign reserves of under $61bn dollars (£43.7bn), less than Malaysia or Thailand. The foreign liabilities of the UK banks are $4.4 trillion – or twice annual GDP – according to the Bank of England. The mismatch is perilous.

.. know that your people will judge you on what you can build, not what you destroy.

Obama Inaugural Address

Quick Overview

• (Bloomberg) -- U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini.

• U.K. consumer prices rose 3.1% YoY
  

• The British Pound fell against the dollar and hit a record low against the yen. Jim Rogers, chairman of Singapore-based Rogers Holdings, said the “U.K. is finished” and investors should sell the currency.
  

• Japan’s consumer confidence fell from 28.4 to 26.2 in December -- the lowest on record
  

• Canada cuts rate to record 1% -- signals more easing.
  

• Germany's BMW is looking into applying for state guarantees to back up its borrowings.
  

• Fiat is acquiring a 35% stake in Chrysler.
  

• Continuing hot and dry weather in Argentina continues to support corn and beans.
  

• Gazprom resumed gas supplies across Ukraine to Europe
  
  

If the state can't save us, we need a licence to print our own money
It bypasses greedy banks. It recharges local economies. It's time to think seriously about an alternative currency

U.S. stimulus not enough, TARP bailout misused: Soros
"If they are successful...the deflationary pressures will be replaced by the specter of inflation and the authorities will have to drain the excess money from the economy almost as quickly as they pumped it in. Of the two operations the second one is going to be, politically, even more difficult than the first," he said.

Quick Overview

• RBS fell almost 67% after warning that it could face losses of up to £28bn for 2008 - the largest ever in UK corporate history.
  

• The U.K. has taken the first step towards quantitative (=printing) easing by authorizing the Bank of England to buy up to £50bn of private sector assets as part of a wider drive to get banks lending again.
  

• Germany's top 20 banks still have around 300 billion Euros of toxic securities on their books and have written off only a quarter of that, according to an official survey, SPIEGEL reports.
  

• The total cost of the inauguration of the 44th President of the United States will likely top $150 million.
  

• Hungary cut its interest rate to 9.5% from 10% – the fourth 1/2 point cut in less than two months.

• Standard & Poor cut Spain’s credit rating from AAA+ to AA
  

• Czarnikow estimates a global sugar shortfall of 5.8 million tons this year. Indian production is now estimated at 18 MT compared with 19.2 MT forecast in Dec.

Monetary union has left half of Europe trapped in depression
Don't expect tremors before an earthquake – and there is no fault line of greater historic violence than the crunching plates where Latin Europe meets Teutonia.

21,000 Jobs Worldwide Erased in Day as Recession Chokes Demand
About 2.1 million U.S. jobs will be lost in 2009, Lonski predicted, with 80 percent of the layoffs by the 4th of July.

Citigroup’s Pandit Tries to Save the Little That’s Left to Lose
Relief isn’t in sight. North American credit-card losses, as a percentage of total loans, climbed to 8.04 percent in the fourth quarter from a third-quarter rate of 7.13 percent, the bank said. During the early 1990s recession, the losses peaked at 6.44 percent.

Forgive and Forget?
And to protect and defend the Constitution, a president must do more than obey the Constitution himself; he must hold those who violate the Constitution accountable. So Mr. Obama should reconsider his apparent decision to let the previous administration get away with crime. Consequences aside, that’s not a decision he has the right to make.

Our world may be a giant hologram
Fermilab scientists have found anomalous "holographic noise" in their GEO600 gravitational-wave detector that suggests the possibility that we live in a hologram..

Quick Overview

• U.S. industrial production fell 2.0% in December, and 7.8% YoY
  

• U.S. Consumer prices fell 0.7% in December. YoY prices rose 0.1% -- a half-century low. Excluding food and energy prices rose 1.8% YoY
  

• The Fed will hand Bank of America another $20 billion and guarantee $118 billion of “assets”.
  
• Citigroup posted an $8.29 billion loss, twice as much as analysts expected, and wants to split in two. They are trying to salvage what’s worth something – and get rid of the rest. For his troubles, Robert Rubin retiring from his post as senior counselor pocketed $115 million in pay since 1999, excluding stock options.

• (Bloomberg) -- The heads of the US Treasury and Federal Deposit Insurance Corp. gave further momentum to the idea of a new government-backed bank to remove toxic assets from lenders’ balance sheets.
  

• The University of Michigan's index of consumer sentiment rose from 60.1 to 61.9
  

• The Canadian Real Estate Association said home sales fell 17% YoY.
  

• Snow cover in southern Illinois and Missouri remains lacking, exposing wheat to the coldest temperatures in several years.
  

• Reuters reported that 300,000 cattle have died in Argentina's worst drought since 1961.
  
  
  

The White House Moron Stumbles to the Finish
In 2002 I designated George W. Bush “the White House Moron.” If there ever was any doubt about this designation, Bush’s final press conference dispelled it.

Quick Overview

• U.S. retail sales fell 2.7% in December, the sixth consecutive decline.
  

• Industrial production in the Euro area fell 1.6% MoM, and 7.7% YoY.
  

• Japan’s machine orders, fell 16.2 % MoM -- the biggest decline since the survey began in 1987

• Germany's GDP rose 1.3% in 2008
  

• Canada's Nortel Networks filed for U.S. bankruptcy-court protection
  

• Fears of mass unemployment and social unrest in China have prompted the Communist Party to issue a stern warning over protests.
  

• The number of Internet users in China has reached 298 million

• Bank lending rose19% in China last month, showing that Beijing's stimulus measures are working.
  

• (WSJ) The U.S. government is close to committing billions in additional aid to Bank of America as it tries to digest its acquisition of Merrill Lynch.
  

• Standard & Poor's has downgraded Greek sovereign debt in a move that will make it even harder for the country to finance its ballooning deficits
  

• A federal judge denied another bid by prosecutors to jail Madoff.
  

• The U.S. Navy was granted a one-year permit to train with sonar and bombs in Hawaii waters so long as it “tries” to protect whales and other marine animals from harm.
  

Shipping rates hit zero as trade sinks Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

Quick Overview

• (Bloomberg) -- Federal Reserve Chairman Ben Benanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets.
  

• U.S. exports fell $8.7 billion in November to $142.8 billion while imports fell $25.0 billion to $183.2 billion.
  
  

• China’s exports fell 2.8% -- the most in almost a decade
• According Chinese customs data:
  Imports of iron ore into China rose to 34.53 Mt in December. This marks an increase of 2.0 Mt MoM and up 0.3 Mt YoY. Soyabean imports for 2008 showed an increase of 6.6 Mt YoY. December imports of 3.30 Mt took the annual total to 37.44 Mt.
  

• Canada’s exports fell 6.8% in November while imports fell 4.8%
  Canada’s new home prices fell 0.3% in November.
  

• The ICO raised its guess of the world's 2008-2009 coffee crops from 132.5 to 134.2 million bags, YoY this is up from 116.2. Consumption for 2008 remained unchanged at 128 million bags. For 2009 they anticipate consumption at 132 million bags.
  The ICO said Brazil’s coffee production, which follows a biennial cycle (high output one year followed by low the next), could fall from 46m 60kg bags in 2008-09 to between 36.9m and 38.8m bags this year, a drop of 16 to 20 per cent.
  

• The Florida Department of Citrus said there were 104.9 million gallons of frozen orange juice concentrate in inventory -- up 77% YoY
  

No need for condoms – GE corn can do the job
New research from Austria shows that a commercial strain of Monsanto-made GE corn causes mice to have fewer and weaker babies. What is this doing to human fertility?

The bond bubble has long since burst: investors, ignore this at you peril

The Fed's December minutes reek of fear. The Bernanke team is no longer sure that stimulus will gain traction in time.

The Fed's "Monetary Multiplier" has collapsed, falling below 1. This is unthinkable. We are in a liquidity trap.

So yes, printing money is not as easy as it looks, but to conclude that the Fed cannot bring about inflation is a leap too far.