Quick Overview

• MBIA Inc. Chief Executive Dunton dismissed bankruptcy rumors and expects to keep AAA rating.
  

• U.S. jobless claims rose 69,000 to 375,000, more than expected and the most in over two years.
  

• U.S. Personal incomes rose 0.5%
  

• U.S. Consumer spending rose 0.2%.

• U.S. Personal consumption expenditures rose 3.5% YoY.
  

• U.S. employment cost index rose 0.8%

• The Chicago purchasing managers' index fell from 56.4 to 51.5
  

• Russia’s GDP rose 8.1% in 2007
  

• Canada’s GDP rose 0.1% in November and 2.7% YoY
  

• Euro area unemployment rate was unchanged in December at 7.2%.
  

• The U.S. DoE said underground supplies of natural gas fell 274 billion cubic feet last week to 2.262 trillion cubic feet. Supplies are down 13% YoY
  

Putting it in Reverse
On that point, former Labor Secretary Robert Reich writes, "America's middle classes are no longer coping." He notes that the fixes proposed by Bernanke and Bush will not help much, because the middle classes have run out of "coping mechanisms." The short version of the story is that the typical man earns less, in real terms, than he did 37 years ago. "The income of a young man in his 30s is now 12 per cent below that of a man his age three decades ago." Families have struggled to increase their standards of living, first by putting women to work…second, by working longer hours…third, by turning to credit. The workplace is now dominated by over-indebted women who work night and day.

Quick Overview

• The Fed cut its key lending rate by one-half percentage point to 3%,

• U.S. GDP rose 0.6% QoQ and 2.5% YoY, weaker than expected.
  

• Industrial output in Japan rose 1.4% in December.
  

• The U.S. Department of Energy said that:
  Supplies of crude oil rose 3.6 million barrels to 293.0 million barrels.
  Supplies of gasoline rose 3.6 million barrels
  Supplies of heating oil supplies fell 200,000 barrels.
  Refinery use fell from 86.5% to 85.0% of capacity last week.
  Gasoline demand rose 1.4% YoY
  Distillate demand fell 0.4% YoY.
  
  

• Cocoa rose to a 4 1/2-year high on speculation that supplies from West Africa are drying up.
  

U.S. farming practices acidifying Mississippi "It's like the discovery of a new large river being piped out of the Corn Belt," Raymond said. "Agricultural practices have significantly changed the hydrology and chemistry of the Mississippi."

Zimbabwe Economics

As we’ve hinted, too, it is one thing to punish a few speculators with skin in the dotcom game. It is quite another to deliver a stern lesson to America’s entire middle class. The latter never liked school.

New Alzheimer's Treatment Completes First Phase Of Testing
A molecule designed by a Purdue University researcher to stop the debilitating symptoms of Alzheimer's disease has been shown in its first phase of clinical trials to be safe and to reduce biomarkers for the disease.

Quick Overview

• U.S. durable goods orders rose 5.2% in December, much more than expected. Excluding transportation orders rose 2.6%.
  

• Consumer confidence fell from 90.6 to 87.9 in January.
  

• Japan’s employment rate unchanged at 3.8%.
  Japan's retail sales fell 0.1% YoY. Household spending rose 2.2%.
  

• Tyson Foods, the nation's second largest pork packer, announced they were in talks with China to supply them with pork. No timetable was announced.
  

• According to Standard & Poor's/Case-Shiller, U.S. home prices fell 8.4% YoY. With double-digit declines recorded in some hard-hit areas, such as Miami, San Diego, Las Vegas and Detroit.

Quick Overview

• U.S. New-home sales fell 4.7% MoM, and 26% YoY. The median price of a new home fell 10% YoY to $219,200.
  
  

• The Fed meets tomorrow and Wednesday.
  
  

• Home prices in the U.K. fell 0.3% in December. UK house prices could fall by as much as 5% this year and 8% in 2009, the quarterly Deloitte Economic Review has warned.
  

• Gold and platinum prices hit an all-time high after South Africa's main precious metals mines remained closed for the fourth day for lack of power.

Water shortage poses economic threat
The global population will rise above 9bn by 2050 but as early as 2025 the amount of water available per capita per year will have halved compared to 1960. Then it was 13,000 cubic meters but by 2025 that is projected to have fallen to 6,000 cubic meters.

Banks May Need $143 Billion for Insurer Downgrades (Update4)
``Barclays Capital has come up with a very big and very scary number,'' said Donald Light, an insurance analyst at Boston-based consulting firm Celent. ``It indicates that the cost of a bailout of the bond insurers is a lot less than the cost of shoring up these banks' mark-to-market losses.''

Bernanke's Easing Thwarted by Surging Commercial Mortgage Rates
``Lending standards became more lax because people knew they wouldn't be keeping the loans on their books,'' Tross said

Quick Overview

• GDP in South Korea rose 5.5% QoQ
  

• Canada’s consumer prices rose 0.1% in December, 2.4% YoY
  

• Japan's consumer prices rose 0.7% YoY
  

• IGC estimates corn demand at 770 ml tons, and production at 765 ml tons in the 12-month through June.
  

• Argentina lowered it’s corn production estimate to 21 ml tons from 22.
  

• ICO estimates coffee production at 116 million bags and consumption at 123 for 2007-08.
  

• F.O. Licht, lowered it’s estimate for world sugar production this year by 0.5%. It estimates production at 169.1 ml tons, down from an October estimate of 169.9.
  

• The IGC estimates the 2008/09 world wheat crop at a record 642 million tons. That'd be up 6.6% from the 2007/08 crop.
  
  

• Platinum futures hit all-time highs and gold futures set fresh life-of-contract highs, on power-supply shortages in South Africa.

• The rumor of the day is that the almost daily imports of corn by South Korea are actually Chinas.

Europe and Asia face hard landings as bubbles burst
I am bullish on Asia but let's not get ahead of ourselves. The US is a $9.5 trillion (£4.9 trillion) consumption economy: China is $1 trillion, and India is $650bn. They are not yet at the stage where they can fill the void left by an over-indebted US," he said.
Mr Roach said US consumption reached 72pc of GDP in 2007. "No country in the history of the world has ever consumed that much of its GDP.
"We've played the housing bubble, using homes as ATM machines," he said.

A return to normal levels of savings would amount an economic shock equal to 5pc of GDP.

Quick Overview

• U.S. existing home sales are down 2.2% MoM and down 22% YoY.
  Prices of single family homes were down 1.8% in 2007 -- the first decline since records began four decades ago.
  

• China’s GDP rose 11.4% in 2007.
  

• Russia had 1.8% inflation in the first three weeks of January
  

• YoY Japan's trade surplus narrowed 20.9% in December
  

• The U.S. Labor Department said that jobless claims were down 1,000 last week to 301,000.
  

• The U.S. Department of Energy said that:
  Supplies of crude oil rose 2.3 million barrels to 289.4 million barrels
  Supplies of gasoline rose 5.0 million barrels
  Supplies of heating oil supplies fell 300,000 barrels.
  Refinery use fell from 87.1% to 86.5%
  Gasoline demand rose 1.1%
  Distillate demand rose 0.3%.
  
  

Banks, New York Regulator Meet on Bond Insurer Rescue New capital may help preserve the top credit ratings for the bond guarantors such as MBIA Inc., the industry's largest, and halt any erosion of investor confidence in the $2 trillion of assets they guarantee. Ambac Financial Group Inc., MBIA's biggest rival, lost its AAA grade from Fitch Ratings this month on concern about rising defaults tied to subprime mortgages.

Quick Overview

• U.K.'s GDP rose 0.6% in the fourth quarter and up 3.1% for all of 2007.
  
  

• Canada's leading indicators fell 0.1% in December.
  

• Australia’s consumer prices rose 3.0%.
  

• The USDA said there were 464.3 million pounds of frozen pork in storage, up 5% YoY.

• Frozen bellies totaled 55.5 million pounds, up 32% YoY.
  
  

• The USDA said supplies of frozen orange juice concentrate in storage totaled 682 million pounds.

The Fed did not panic As skittish markets showed today, more will undoubtedly be required, and soon. But at least the US authorities are facing up to the predicament that they created in the first place by fixing the price of credit artificially low for year after year, and failing to regulate banks, derivatives, and structured credit with a minimum of common sense.

Quick Overview

• The Fed cut the fed funds rate 0.75% to 3.50%.
  

• The White House said Bush isn't ruling out a larger economic stimulus package than the $150 billion already proposed.
  

• B of A profit drops 95%.
  

• The International Copper Study Group said in the first ten months of 2007, world copper consumption outpaced production by 220,000 tons
  

• Canada reduced its key interest rate by a 0.25%, to 4.00%.

• Retail sales in Canada rose 0.7% in November
  

• Japan left its key its interest rate unchanged at 0.50%
  

• China recorded double-digit growth in trade with all its major trading partners including the EU, US, Japan, ASEAN and South Korea in 2007, Xinhua reported.

PIMCO's McCulley Calls for the Fed to Cut Rates Immediately NEWPORT BEACH, CA--(MARKET WIRE)--Jan 21, 2008 -- PIMCO Fed Watcher, Paul McCulley, today called for the Fed to lower rates now rather than wait for its next scheduled meeting. "Sometimes when you are ill, you make an appointment with your doctor; other times, you go straight to the emergency room. Now is one of those other times. The Fed must cut immediately and aggressively for the health of the economy."

Euro at risk from Europe’s economic storm
The euro must be weak, or it will break

Ambac's Insurance Unit Cut to AA From AAA by Fitch Ratings
The seven AAA rated bond insurers place their stamp on $2.4 trillion of debt. Losing those rankings may cost borrowers and investors as much as $200 billion, according to data compiled by Bloomberg. The industry guaranteed $100 billion of collateralized debt obligations linked to subprime mortgages, $22 billion of non-prime auto loans and $1.2 trillion of municipal debt.

Quick Overview

• U.S. leading indicators fell 0.2% in December to 136.5, the third consecutive monthly decline.
  

• The University of Michigan's consumer sentiment index rose from 75.5 to 80.
  

• Canada’s manufacturing sales rose 1.1% in November.
  

• U.K.’s retail sales fell 0.4% in December.
  

• Japan's consumer confidence fell from 39.8 to 38.0.
  

• Jewellery gold demand will sink almost 20 % in the first half of 2008, raising doubts about the sustainability of current record gold prices, according to GFMS
  

• Indonesia plans to institute price controls on soybeans.
  

Quick Overview

• U.S. housing starts fell 14.2% MoM. YoY, housing starts are down 25%.
  
  

• The Philadelphia Federal Reserve's index of manufacturing fell from -1.6 to -20.9, the lowest in six years.
  
  

• Australia's unemployment rate improved from 4.5% to 4.3% in December.
  
  

• The U.S. Department of Energy said that underground supplies of natural gas were down 59 billion cubic feet last week to 2.691 trillion cubic feet. Supplies are down 9% YoY
  
  

• A climatologist at Iowa State University is warning that "La Nina conditions are now posing a significant risk to U.S. corn production in 2008."
  
  

• The WSJ reports that Global oil fielda output is declining at a rate of about 4.5% a year. But new projects in the works could make up for the decline.
  
  

• (Interfax) according to China customs, China imported 30.8 million tons of soybeans in 2007, up 9% YoY.
  
  

Drought shows how risky hydropower is Ships are stranded, millions are short on drinking water, and power supplies to big consumers in several Chinese provinces have been cut back, industry officials and local media have said.

Quick Overview

• China announced that food producers will have to get permission before raising prices. Some analysts pointed out that this will curt-tale domestic food production without curbing demand.

• J.P. Morgan's net income dropped 34% in Q4, and reported $1.3 billion in sub prime-related losses.
  

• Wells Fargo Q4 profit fell 38%, as more people missed payments on mortgages and home equity loans.
  

• U.S. Consumer prices rose 0.3% in December and 4.1% YoY.
  

• U.S. Industrial production is unchanged in December and up 1.5% YoY.
  

• U.K.'s unemployment rate out at 5.3%, MoM unchanged.
  

• YoY Consumer prices in the Euro area rose 3.1% in December
  

• Japans machinery orders fell 2.8% in November – better than expected.
  

• For the 11th time China increased reserve requirement for its banks -- now at 15.00%.
  

• The U.S. Department of Energy said that:
  Supplies of crude oil rose 4.3 million barrels to 287.1 million barrels,
  Supplies of gasoline rose 2.2 million barrels
  Supplies of heating oil supplies rose 200,000 barrels.
  Refinery use fell from 91.3% to 87.1%.
  Gasoline demand rose 1.2% YoY
  Distillate demand rose 2.1% YoY.
  

• Because of a lack of rainfall Cocoa exporters lowered Ivory Coast production estimates to just over 1 million tonnes from 1.1 million previously.
  
  
  

Quick Overview

• U.S. producer prices fell 0.1% in December and rose 6.3% YoY,
  

• U.S. retail sales in December fell 0.4% MoM, and rose 4.1% YoY.
  
  

• U.K. consumer prices rose 2.1% YoY
  

• Citigroup wrote off $18.1 billion and slashed its dividend by 41%.
  

• China's forex reserve reached 1.53 trillion $ by the end of 2007, up 43.3 percent from 2006.

• The New York Fed’s index of manufacturing sentiment fell from 9.8 to 9.0 in January.
  

• Germany's GDP rose 2.5% in 2007.
  
  

• Chinese Minister of Communications Li Shenglin said container throughput of mainland's ports rose 20.4% YoY to 112.7 million TEU.
  

• The International Coffee Organization estimates the world coffee crop at 124.5 million bags, up from 116 million YoY. Consumption is estimated at 125 million bags, up from 123 million bags in 2007.
  

Pakistan's poor, Musharraf reeling under wheat crisis
Government officials have blamed high international wheat prices, hoarding by local traders and smuggling to Afghanistan, which is also in the grip of a wheat shortage. But experts said the responsibility lies with the government, whose estimates about the 2007 wheat crop were hugely flawed.

Quick Overview

• The Dow industrials rose 171.85, or 1.4%, on hopes for aggressive rate cuts and positive earnings from IBM.
  

• Pelosi and Bernanke met to review how Congress might act to stimulate the slowing economy.
  

• With help from a lower dollar gold pushed above $900.
  

• U.K. prices for manufactured goods rose 0.5% MoM and 5.0% YoY.
  

• Industrial production in the Euro area fell 0.5% in November.
  

• Corn hit a fresh high on supply concerns.
  

Anna Schwartz blames Fed for sub-prime crisis
"Liquidity doesn't do anything in this situation. It cannot deal with the underlying fear that lots of firms are going bankrupt," she says. Her view is fast spreading. Goldman Sachs issued a full-recession alert on Wednesday, predicting rates of 2.5 per cent by the third quarter. "Ben Bernanke should be making stronger statements and then backing them up with decisive easing," says Jan Hatzius, the bank's US economist

Pakistan Guards Flour Mills to End Smuggling, Secure Supplies
Food shortages and rising prices in Pakistan are increasing pressure on President Pervez Musharraf's government, which is trying to control civil unrest and a surge in terrorist attacks. Wheat prices in the world's sixth-largest consumer of the grain climbed 23 percent in a 15-day period until Jan 8.

Baltic dry sea freight index makes record fall
But analysts said the fall was not related to growing fears of economic recession.

Paulson Says Time `of the Essence' in Any Stimulus (Update1)
..said President George W. Bush still hasn't decided if tax cuts or other fiscal measures are necessary.

Soybeans Soar to Record High as Rising Demand Shrinks Supply
The reserves of corn before the next harvest represent 11.1 percent of consumption, down from 14.2 percent forecast last month and 11.6 percent last year, USDA data show. Soybean inventories as a percent of consumption will fall to 5.9 percent this year from 18.7 percent last year, the USDA said.

Quick Overview

• India's industrial growth slowed to 5.3 percent in November.
  

• China's trade surplus shrank to $22.7 billion from $26.2 billion in November, versus 24.4 expected
  

• YoY China's M2 rose 16.7%.
  

• U.S. Trade deficit rose 9.3% to 63.1 billion, the most in two years.
  
  

• The USDA's estimates 2007-2008 U.S. ending stocks:
  Corn was lowered from 1.797 to 1.438 billion bushels
  Soybeans were lowered from 185 to 175 million bushels
  Wheat was increased from 280 to 292 million bushels.
  Sugar was lowered from 2.050 to 2.006 million tons.
  Cotton was increased from 7.70 to 7.90 million bales.
  

• The USDA estimates 2007-2008 world ending stocks:
  Corn was lowered from 109 to 101 million tons.
  Soybeans were lowered from 47.3 to 46.2 million tons.
  Wheat was increased from 110 to 111 million tons.
  Cotton was lowered from 55.3 to 54.75 million tons.
  

• The USDA anticipates 46.61 million acres of winter wheat to be planted in 2008, up 3.6% YoY.
  

• The USDA estimates Florida's orange crop at 168 million boxes and juice yield of 1.60 gallons per box.
  
  

• The USDA estimates Argentina’s soybean crop unchanged at 47 million tons
  

• The USDA estimates Brazil's soybean crop at to 60.5 million tons, down from 62 million tons.
  

Quick Overview

• Bernanke said “We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks.''
  
  

• The U.S. Commerce Department said that wholesale sales rose 2.2% in November.
  

• The U.S. Labor Department said jobless claims were down 15,000 to 322,000.
  

• Russia's inflation rate rose to 11.9 percent in 2007.
  

• The Bank of England kept its key lending rate unchanged at 5.50%.
  

• The European Central Bank kept its interest rate unchanged at 4.0%.
  

• A survey showed that U.S. farmers planted about 48.5 million acres of winter wheat. YoY this is up 7.8%, from low levels, and the most in 12 years. The USDA reports tomorrow.
  

• Cepea estimates Brazils 2008 coffee demand at 46 million bags and production at 41.2 to 44.1 million bags. This depletes Brazil's non-government stockpiles further, which are at 7.77 million bags -- down 50% YoY.
  
  

• The U.S. DoE said underground supplies of natural gas fell 171 billion cubic feet last week to 2.750 trillion cubic feet. Supplies are down 9% YoY.
  

• Statistics South Africa said November gold production fell 12.7% YoY..
  

China poised to be world leader in renewable energy, expert predicts
"I think China will be number one in less than three years in every renewable energy market in the world," Worldwatch president Chris Flavin told reporters at the launch of the annual "State of the World" report.

Quick Overview

• Bush is "considering" a stimulus plan that would offer tax rebates for individuals and tax breaks for businesses.
  
  

• Goldman's Jan Hatzius issued a recession call. He says the economy should contract modestly through late 2008, with a gradual recovery during 2009. The recession is likely to last two to three quarters and should be relatively mild by historical standards, he says.

• GDP in the Euro area rose 2.7%
  
  

• The U.S. Department of Energy said that:
  Supplies of crude oil fell 6.8 million barrels to 282.8 million barrels.
  Supplies of gasoline rose 5.3 million barrels
  Supplies of heating oil fell 2.3 million barrels.
  Refinery use rose 89.4% to 91.3% of capacity.
  Gasoline demand rose 0.4% YoY
  Distillate demand rose 4.9% YoY
  
  

• India’s 12 major ports have had a 22.16% increase in container throughput volumes between April and November, 2007.
  

Nukes, Spooks,
and the Specter of 9/11
We're in big trouble if even half of what Sibel Edmonds says is true…

If Soy Is Expensive, Why Does Goldman Say Nevermind?
Rising wealth from Shanghai to Sao Paulo is leading to better diets and straining corn and soybean supplies just as record energy prices boost sales of biofuels. Even after rising 17 percent in 2007, corn costs about $2 a bushel after adjusting for inflation, compared with a $7.80 high in 1974.

Quick Overview

• Retail sales volume in the Euro area fell 0.5% in November.
  

• The National Association of Realtors' index of pending home sales dropped from 89.9 to 87.6 in November, better than expected.

• The Supreme Court imposed a six-year statute of limitations for suing the federal government in property disputes.
  

• Gold futures rose to an all-time high above $875. However, inflation adjusted, gold remains well below its all-time high
  

• Saudi Arabia announcement they intend to gradually stop producing wheat and that they will import all of their needs by 2016 in order to conserve water. Currently, Saudi Arabia uses about 2.5 million tons per year.
  

• Goldman Sachs has made a deal to buy a 20 percent stake of China shipbuilder Yangfan Group, and the Wall Street bank will help the Chinese shipbuilder to go public as early as 2008
  

• NYK president Koji Miyahara said his 740 ships must cut speed by 10% to save fuel. Fuel prices have risen from $164 a ton five years ago to $500 today. "If a single containership daily consumes 200 tons of fuel costing $500 per ton, its fuel cost will reach as high as $100,000 in just a day," he said.

Quick Overview

• Bush acknowledged that economic indicators are causing worry for Americans, but said the economy is resilient. Paulson stressed the administration is combating the country's housing crisis.
  
  

• QoQ the U.S. office vacancy rate rose to 12.6%. This is the first increase after 16 consecutive quarterly declines.
  

• The unemployment rate in the Euro area unchanged at 7.2% in November.
  

• EU Producer prices rose 0.8% in November and up 4.1% YoY.
  

• Germany's cocoa grindings rose 17% in 2007.

• China plans to import 1.1 million metric tons of soybeans and 73,000 tons of soy oil to curb rising food inflation of 18.2% currently.

• Malaysia has called on stores to ration cooking oil because of panic buying sparked by rumours that the government will raise the price of the household commodity
  

White House considering stimulus package
Some suggested a one-year tax rebate of $500 might provide a sufficient shot-in-the-arm for the economy. But they stressed that the proposal would have to be passed quickly.

The Edge Annual Question — 2008
When thinking changes your mind, that's philosophy.
When God changes your mind, that's faith.
When facts change your mind, that's science.

Quick Overview

• The U.S. unemployment rate rose from 4.7% to 5.0% in December -- less than expected.
  
  

• The Institute of Supply Managements' index of services dropped from 54.1 to 53.9 in December.
  
  
  

• Services in the U.K. increased from 51.9 to 52.4 in December, more than expected.
  
  
  

• The U.S. Department of Energy said that underground supplies of natural gas were down 87 billion cubic feet last week
  
  

• It is estimated that Funds had $110 billion to invest into the commodity markets in 2007. The estimate for 2008 is expected to grow by 36% to $150 billion.
  
  

• The Far Eastern Freight Conference said its member shipping lines had increased volume 19.4% on westbound Asia-Europe/Med routes in November.
  
  

• From January to November 2007, eastern China's Anhui province handled 9.8 million tons of imports and exports, up 73% YoY.

Dow's Worst Start Since 1983 May Herald Gains, JPMorgan Says
The Dow has posted an average rise of 14 percent following the 10 worst yearly starts since 1901, based on returns tracked by JPMorgan. That compares with a 7 percent average advance for all years.

Quick Overview

• U.S. Factory orders rose 1.5% in November, the most in four months, according to the Commerce Department - versus 0.5% expected.
  

• A report from ADP Employer Services showed companies in the U.S. added 40,000 jobs in December, more than expected.
  

• Euro-Zone M3 monetary total showed November YoY growth of 12.3%.
  
  

• The unemployment rate in Germany improved from 8.6% to 8.4% in December, the lowest in 15 years.
  
  

• The U.S. Department of Energy said that:
  Supplies of crude oil fell 4.0 million barrels last week to 289.6 million barrels.
  Supplies of gasoline rose 1.9 million barrels
  Supplies of heating oil fell 1.4 million barrels.
  Refinery use rose from 88.1% to 89.4% of capacity last week.
  Gasoline demand rose 0.1% YoY
  Distillate demand rose 5.7% YoY.
  
  

• The Philippines, the world's biggest importer of rice, plan to buy 550,000 metric tons. Global stockpiles of rice are forecast by the USDA to fall to 72.2 million tons by July, the lowest since 1984.
  

U.S. at the Bottom of Global Privacy Rankings
Other low ranking countries include: China, Russia, Thailand, Taiwan, Singapore, Malaysia, and England. Greece was the highest ranking country when it came to citizen privacy protection.

Quick Overview

• The Institute for Supply Management's manufacturing index dropped to 47.7 from 50.8, the lowest reading since April 2003.
  
  
  
• Construction spending rose 0.1% in November, the Commerce Department reported Wednesday.
  

• The average price of diesel fuel rose 3.7 cents to $3.345 a gallon, while gasoline rose 7.3 cents to $3.053, the DoE said.
  

• Oil rose to a record $100 on geopolitical turmoil, tight energy stockpiles, and a weak dollar.
  

• U.S. class 8 truck sales continued soft in November, with original equipment manufacturers selling 10,309 vehicles — down 54.3% YoY.
  
  

• India reduced import duties on vegetable oils from countries of the South Asian Free Trade Agreement. The import duty on refined vegetable oils of edible grade has been reduced to 20% from the earlier 52.5% for imports from Pakistan and Sri Lanka, while imports from the other four SAFTA countries will be duty free, versus 26.25% previously.
  
  

• Scientists are on the verge of decoding the special chemical language that bacteria use to "talk" to each other, British researchers report. The research could lead to new treatments for antibiotic-resistant bacteria, including "superbugs" that infect more than 90,000 people in the United States each...
  

• Dec. 31
  U.S. existing home sales unexpectedly rose 0.4% in November to an annual rate of 5.0 million units. YoY home sales are down 20%.
  
  


• Dec. 30
  (Bloomberg) -- China, the world's biggest grain producer, will tax exports of wheat, corn and rice to increase domestic supply and control rising food prices. Exporters of wheat will start paying a 20 percent tax on Jan. 1, while the tax for corn and rice was set at 5 percent..
  Beijing approved the launch of China’s first gold futures contracts, with simulated trading on the Shanghai Futures Exchange.
  

• Dec. 28
  U.S. new home sales fell 9.0% MoM. YoY new home sales are down 25%.
  The Chicago purchasing managers' index increased from 52.9 to 56.6 in December, stronger than expected. The December of 2008 eurodollars closed up .14 at 96.565, influenced more by today's weak home sales figures.
  As of January 1st, Brazil will require at least 2% of all diesel fuel to be biodiesel.
  The U.S. Department of Energy said that underground supplies of natural gas dropped 165 billion cubic feet last week to 3.008 trillion cubic feet. Supplies are now down 4% YoY and up 8% from the five-year average.
  
  Japans consumer rose 0.6% YoY, the biggest rise in nine years.
  Japans unemployment rate improved from 4.0% to 3.8% in November, better than expected.
  Japans industrial production fell 1.6% in November.
  

Happy Holidays!

(Updates resume Jan.2)

A couple of charts for Fed watchers

Bank Borrowings:


Bank Free Reserves: