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 Blood-Stained Monster Enters Gaza
By URI AVNERY
Nearly seventy ago, in the course of World War II, a heinous crime was committed in the city of Leningrad. For more than a thousand days, a gang of extremists called “the Red Army” held the millions of the town’s inhabitants hostage and provoked retaliation from the German Wehrmacht from inside the population centers. The Germans had no alternative but to bomb and shell the population and to impose a total blockade, which caused the death of hundreds of thousands.

Quick Overview

• Russia will resume pumping gas to third countries via Ukraine from Tuesday morning, the EU says.
  

• The FDIC pushed the more than 5,000 banks it regulates to provide information on how they are using billions of dollars in taxpayer aid.
  

• The USDA's 2008-2009 ending stocks estimate for:
  Corn was raised from 1.474 to 1.790 million bushels.
  Soybeans were raised from 205 to 225 million bushels.
  Wheat was increased from 623 to 655 million bushels.
  Sugar was increased from 961,000 to 1,072,000 tons.
  Cotton was dropped from 7.1 to 6.9 million bales.
  

• The USDA's 2008-2009 world ending stocks estimate for:
  Corn was increased from 124 to 136 million tons.
  Soybeans were unchanged at 54 million tons.
  Wheat was raised from 147 to 148 million tons.
  Cotton unchanged at 59 million tons.
  The USDA said 42.1 million acres of winter wheat were planted last fall, down 9% YoY
  

• Corn fell the exchange limit in Chicago and soybeans and wheat also plummeted on the news.
  

• As of December, the USDA said there were:
  10.1 billion bushels of corn stocks, up 2% YoY.
  2.28 billion bushels of soybean stocks, down 4% YoY.
  1.42 billion bushels of wheat stocks, up 26% YoY.
  

• The USDA lowered its guess of the Florida orange crop from 165 to 162 million boxes, but increased the projected juice yield from 1.58 to 1.62 gallons per box.
  

• Medical officials said the Palestinian death toll in the offensive Israel began 17 days ago had risen past 900 and included at least 380 civilians.
  

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.

The hundred years' war
How growing rejectionism, the rise of religion, a new military doctrine and a new cold war keep peace at bay

Merrill Lynch says rich turning to gold bars for safety
"They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands," he said.

Quick Overview

• The U.S. unemployment rate rose from 6.7% to 7.2% in December
  
• Non-farm payrolls revised from -533,000 to -584,000. This is the worst year for job losses since 1945
  
  

• Canada’s unemployment rate rose from 6.3% to 6.6%
  
• Canada’s building permits fell 11.8% in November.
  

• U.K. manufacturing output fell 2.9% MoM and down 7.4% YoY
  
• The Government should buy homes on the brink of repossession to help those people who may struggle to pay their mortgages through the recession two former Bank of England economists have recommended.

• Germany's government bails out Commerzbank, amid renewed anxiety about financial markets
  
  

• Agricultural commodities are "the most cheaply priced"
  of the commodity sectors, says Deutsche Bank. "
  
  

• Argentina’s weather forecasts flipped from wetter to not only drier, but much hotter. Argentina’s drier and warmer weather may spread into southern Brazil and Paraguay next week, increasing stress on corn and soybean crops.
  

• Continental, the world’s fifth largest airline has taken one of its passenger jets on a test flight using biofuel made from sustainable sources.

• (Reuters) - Israel rejected a U.N. resolution calling for a ceasefire in Gaza on Friday and jets and tanks again pounded the Palestinian enclave.
  
  
  

Europe's economy contracts at rates not seen since 1930s
Jacques Cailloux, from the Royal Bank of Scotland, said the pace of contraction in Europe is now disturbingly close to levels seen in the Great Depression. The eurozone bloc shrank by 3pc in 1930, 5pc in 1931, and 4pc in 1932.

Quick Overview

• The U.S. Labor Department said that jobless claims were down 24,000 last week to 467,000.
  

• The Bank of England cut rates from 2% to 1.5%, the lowest since 1694.
  

• Chancellor Alistair Darling denies he is planning to "print money" in order to boost the UK economy.
  

• Mexico’s President Felipe Calderon promised nearly $150m to struggling industries in a bid to save hundreds of thousands of jobs.
  
  

• Euro zone business sentiment fell to 67.1 from Novembers 74.9 - the lowest level since records started in 1990.
  
  
• Euro zone GDP fell 0.2% QoQ,
  

• Euro zone unemployment rate rose from 7.7% to 7.8%.
  

• Australia's building approvals fell 12.8% in November.
  

• The Japanese central bank is providing banks with emergency loans ($13bn) in a new bid to stimulate its worsening economy.
  
  

• Brazil cut its corn production estimate by 85 million bushels. Soybean production forecast was lowered by 36.8 million bushels.
  
  

• (WSJ) The No. 1 problem facing US taxpayers? A tax code so complex that Americans spend $193 billion per year just trying to figure out how much they owe.
  
  

• In a report just published, "The Digital Road to Recovery: A Stimulus Plan to Create Jobs, Boost Productivity and Revitalize America," the Information Technology and Innovation Foundation (ITIF) finds that a $30 billion investment in America's digital infrastructure -- broadband networks, health IT, and a smart power grid -- will spur significant job creation in the short run, creating approximately 949,000 U.S. jobs while leading to higher productivity, increased competitiveness, and improved quality of life

'Buy USA' push may see America slip from free trade church
Pascal Lamy, the WTO chief, is so worried he has taken to displaying portraits of Willis C. Hawley and Reed Smoot at his Green Room in Geneva, evoking the arch-villains of the Smoot-Hawley Tariff Act that set off the trade wars of the Great Depression. The Act was forced upon a disgusted President Herbert Hoover in June 1930. This is the pattern in democracies. Lawmakers – with a constituency base – are the first to push for protection.

Quick Overview

• The U.S. budget deficit in 2009 is projected to spike to a record $1.2 trillion, or 8.3% of GDP.
  

• Employer Services’ report that payrolls shrank by 693,000 jobs last month, the most since records began in 2001.
  

• Australia's retail sales rose 0.1% in November
  

• Euro area’s producer prices fell 1.9% MoM, but rose 3.3% YoY.
  

• Russia shut down all gas flows to Europe through Ukraine on Wednesday.
  

• Germany saw its unemployment levels rise to 7.6%.
  

• Intel expects fourth-quarter revenue to fall 23% YoY because of weak demand and inventory reductions by its customers.
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 6.7 million barrels to 325.4 million barrels
  Supplies of gasoline rose 3.3 million barrels
  Supplies of heating oil fell 900,000 barrels
  Refinery use increased from 82.5% to 84.6%.
  Gasoline demand fell 2.2% YoY
  Distillate demand rose 0.3% YoY.

• According to a report on FarmFutures.com, the continued dry weather in top-producing areas of southern Brazil could mean a drop in corn and soybean production
  

• Madoff and his wife sent at least 16 watches, a jade necklace and a diamond bracelet to family and relatives.
  

From Wall Street to Washington
It's All One Big Lie The first panel to testify included H. David Kotz, the Inspector General of the SEC. Mr. Kotz has the youngish, fresh-scrubbed, optimistic face of someone who hasn’t been exposed to Wall Street for very long. He’s been at the SEC for 13 months. Before that he served as Inspector General at the Peace Corps. (Yes, Peace Corps.) Before that he worked at the U.S. Agency for International Development (USAID). He is a lawyer but apparently has no securities background to untangle the web at the SEC that permitted the largest and most complex securities fraud in the history of the world.

One clear sign of the End Time is when the media starts publishing my opinions on the economy.
wonder what people mean when they say the economy will recover in 2010. The only way that can happen is if another irrational bubble forms thus creating an illusion of wealth similar to our previous illusions. If you take illusions out of the equation, there isn't anything to get "back" to. The wealth was never there in the first place.

US stockmarket returns
Booms and busts Comparisons to the Depression are clear: only in 1931 and 1937 were there similarly abysmal losses

Quick Overview

• (Bloomberg) -- President-elect Barack Obama said he expects to inherit a $1 trillion budget deficit and that similar shortfalls are in store “for years to come”

• U.S. factory orders fell 4.6% in November, twice as much as forecast.

• U.S. pending U.S. home sales fell 4.0% in November, weaker than expected. The National Association of Realtors says this is the lowest level on record.

• The Institute of Supply Managements' index of services rose from 37.3 to 40.6

• An index of services in the U.K. rose from 40.1 to 40.2

• U.K. House prices fell by 15.9% last year.
  

• Inflation in the eurozone fell more than expected to 1.6% in December.

• (FT) The German government’s second fiscal stimulus could reach €50bn ($68bn, £47bn) over 2 years.

• Pakistani troops moving against Taliban guerrillas have intermittently blocked the one supply route through the Kyber Pass from Pakistan into Afghanistan.

• (WSJ) Russian gas supplies to a swathe of Europe were all but cut off as temperatures plummeted across the region, raising the stakes in a pricing dispute between Moscow and Ukraine.

• GM, Toyota and Ford all reported U.S. sales decline of more than 30% for December.

• Oil prices hit $50 a barrel amid escalating violence in the Middle East.

Quick Overview

• U.S. construction spending fell 0.6% MoM and 3.3% YoY.

• The N.Y. Fed said that it has begun buying fixed rate mortgage backed securities, as it previously announced it would do.

• (WSJ) Madoff's firm was examined at least eight times in 16 years by various agencies, which never came close to uncovering his alleged scheme.

• The Purchasing Managers' Index (PMI) of China's manufacturing sector climbed 2.4% MoM to 41.2% in December. A reading above 50% indicates expansion, while one below 50% indicates contraction.

• Construction activity index in the U.K. fell from 31.8 to 29.3 in December.

A special report on the sea
Troubled waters The evidence abounds. The fish that once seemed an inexhaustible source of food are now almost everywhere in decline: 90% of large predatory fish (the big ones such as tuna, swordfish and sharks) have gone, according to some scientists. In estuaries and coastal waters, 85% of the large whales have disappeared, and nearly 60% of the small ones. Many of the smaller fish are also in decline. Indeed, most familiar sea creatures, from albatrosses to walruses, from seals to oysters, have suffered huge losses.

Asia needs to fully wake up to the scale of the West's economic crisis
The defenders of this dead-end strategy are now coming up with astonishing proposals to put off the day of reckoning. Akio Mikuni, head of Japan's credit agency Mikuni, has called for a "Marshall Plan" to bail out America by cancelling $980bn of US Treasury bonds held by the Japanese state.

Quick Overview

• The Feds Yellen on Sunday urged "pulling out all the stops" by implementing a big fiscal stimulus program to turn around a possible long period of economic stagnation in the United States.
  

• The purchasing managers index published by China’s Federation of Logistics and Purchasing rose to 41.2 in December from the record low of 38.8 in November.
  

• The U.S. ISM index of manufacturing fell from 36.2 to 32.4 in December, the lowest level since 1980.
  
  

• Russia has shut off natural gas to Ukraine, saying that the country owes it $600 million for previous sales.
  

• Manufacturing activity in the Euro area fell from 35.6 to 33.9 in December,
  

• GDP in Singapore fell 2.6% YoY.
  

• Bloomberg reported that world’s largest iron ore consumer China may ask global iron ore majors to accept an 82% price cut for iron.
  

• According to SSY’s Australian Coal Port Congestion Index, average delays are now 9.93 days, the highest since June 2008. Congestion at Australia’s coal ports has contributed to the recent upward movement in freight rates.
  

• Japan’s factory output fell 8.1% in November -- the fastest pace in 55 years.