Quick Overview

• U.S. exports rose $2.2 billion in December, while imports fell $2.2 billion—resulting in $58.8 billion of net imports.
  
  

• Australia’s unemployment rate improved from 4.3% to 4.1% in January,
  

• Canada's exports fell 3.1% in December, while imports rose 0.7% -- resulting in $2.4 billion of net exports.
  

• GDP in the Euro zone rose 0.4% QoQ and 2.3% YoY.
  

• GDP in Japan rose 0.9% QoQ and 1.8% YoY.

• BOJ kept interest rate unchanged at 0.5%.
  
  

• Thailand has started requiring that all its diesel fuel include a component made from palm oil, a move that could reduce costly energy imports but is driving up prices for the commodity.
  
  

• Grain and oilseed prices rose on fresh signs of demand and shrinking supply. Almost half of China’s autumn and winter rapeseed crop was negatively affected by the recent rain and snow storms, the China National Grain & Oils Information Center said.
  
  

• The U.S. is importing wheat?? According to Dow Jones Newswire a million bushels of German wheat has been bought by a U.S. firm (Cargill?)for blending with other U.S. wheat.
  
  

Americans Selling Homes See Prices Go Below Mortgage (Update2)
By the end of this year as many as 15 million U.S. households may owe more on their mortgages than their homes are worth, according to an estimate from Jan Hatzius, chief U.S. economist of New York-based Goldman Sachs Group Inc.

Quick Overview

• U.S. retail sales rose 0.3% in January -- better than expected.
  

• U.K.'s unemployment rate improved to 5.2%, the lowest since 1975.

• Producer prices in Japan rose 3.0% YoY.
  

• Consumer confidence in Australia fell 103.1 to 97.4
  

• Industrial production in the Euro area fell 0.2%.
  

• The DOE said: Supplies of crude oil rose 1.1 million barrels to 301.1 million barrels.
  Supplies of gasoline rose 1.7 million barrels
  Supplies of heating oil rose 600,000 barrels.
  Refinery activity improved from 84.3% to 85.1% of capacity
  Gasoline demand rose 0.4% YoY
  Distillate demand fell 2.8% YoY
  

Quick Overview

• Warren Buffett unveiled a plan to “reinsure” $800 billion of municipal bonds.
  

• Six U.S. Banks launched a program aimed at staving off home foreclosure for seriously delinquent borrowers.
  

• Consumer prices in the U.K. rose 2.2% YoY.
  

• The Senate passed a White House demanded surveillance measure that grants legal impunity to companies that helped the government's warrantless spying program.
  

• The DOE said OPEC's oil production increased from 32.15 to 32.23 million barrels a day while surplus capacity fell from 1.50 to 1.40 million barrels a day.

Quick Overview

• Dow-Jones said Bank of America and Chevron will replace Altria Group and Honeywell International in its Dow-Jones Industrial Average effective Feb. 19th.
  

• Bush signed the $170 billion stimulus package.
  

• U.K.’s producer prices rose 5.7% YoY
  

• Goldman Sachs raised its three- and six-month outlook for Chicago wheat futures by 47 percent to $13.50 a bushel after the U.S. Department of Agriculture cut projected 2007/08 U.S. wheat ending stocks to 272 million bushels, the lowest level since 1947/48.
  
  

• The global corporate default rate in junk debt will jump to 4.6% by the end of this year, Moody's Investors Service said.
  
  

• South Africa's electricity shortage continues with state owned Eskom, which won't be able to increase capacity until 2013, asking consumers to cut usage by 10 percent.

Quick Overview

• The U.S. Congress passed and sent to Bush a $168 billion economic stimulus package.
  
  

• Canada’s unemployment rate improved from 6.0% to 5.8%
  

• The USDA's estimate of 2007-2008 U.S. ending stocks of:
  Corn unchanged at 1.438 billion bushels.
  Soybeans were lowered from 175 to 160 million bushels.
  Wheat was lowered from 292 to 272 million bushels.
  Sugar was raised from 2.006 to 2.029 million tons.
  Cotton was raised from 7.90 to 8.20 million bales.
  

• The USDA's estimate of 2007-2008 world ending stocks of:
  Corn was raised from 101.3 to 101.9 million tons.
  Soybeans were lowered from 46.2 to 45.8 million tons.
  Wheat was lowered from 110.9 to 109.7 million tons.
  Cotton was raised from 54.75 to 57.33 million bales.
  
  

• The USDA lowered its estimate of the 2007-2008 Florida orange crop from 168 to 166 million boxes, but increased its estimate of the juice yield from 1.60 to 1.62 gallons per box
  
  

• There are rumors that Brazil may start buying US wheat as soon as April.
  
  
  

THE REAL SCANDAL
At the crisis' core are loans that were made with virtually nonexistent underwriting standards - no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.

Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?

India's Wheat Imports May Rise 68%, Bolstering Record Prices
``I will be surprised if India matches last year's output as planting got delayed because of dry weather,'' Samson said

Quick Overview

• The National Association of Realtors said its index of pending home sales fell 1.5% in December. YoY pending sales fell 24%.
  

• The Bank of England lowered its interest rate from 5.50% to 5.25%, as expected.
  
  

• The unemployment rate in New Zealand improved from 3.5% to 3.4%
  

Quick Overview

• U.S. non-farm productivity rose 1.8% QoQ and 2.6% YoY, stronger than expected.
  

• U.S. unit labor costs rose 3.1% in 2007.
  

• Japan's index of leading indicators at 40%
  

• SINGAPORE (Reuters) - Forget about graphs, charts and economic forecasts. Wary investors in Asia are turning to feng shui masters to tell them which way the markets will head in the Chinese Year of the Rat.
  
  

Nearby spring wheat sees spec, supply squeeze
"As of yesterday, there were still 20,000 contracts deliverable against March and only enough wheat in inventory in the delivery points for about 2,000 contracts," Brugler explained. "So very much a squeeze situation."

In fact, Brugler said some have quietly calculated that at current prices, it’s actually cost-effective to bring European spring wheat into Minneapolis delivery points. Brugler adds that it's clear the sharp price rise still hasn’t limited buying interest in the contract. What’s less clear, Brugler said, is exactly why that is.

CDO Ratings to Fall as Losses Trigger Fitch Overhaul The New York-based company may lower the notes by as much as five levels after failing to accurately assess the risk of debt that packages other assets, according to guidelines proposed by Fitch today. CDOs with AAA grades that are based on credit-default swaps and aren't actively managed may face the steepest reductions.

Quick Overview

• The Institute of Supply Managements' index of services fell from 54.4 to 41.9 in January, weaker than expected.
  
  

• Index of services in the Euro area dropped from 53.1 to 50.6.
  

• Services in the U.K. increased from 52.4 to 52.5 in January.
  

• Retail sales volume in the Euro area fell 0.1% in December.
  
  

• Australia's central bank raised its interest rate by a quarter point to an 11-year high of 7%.
  
  

• Ethanol production hit a new record high of 14.356 million barrels in November, up 338,000 barrels from October and up 40% YoY.
  

• Excessive rains have increased Asian rust problems on up to 25% of Brazil’s soybean belt.
  

• Canada’s wheat stocks fell 30% YoY. Corn stocks rose15%, and Canola stocks fell 9% YoY.
  

• The Bush budget proposal sent to Congress will let the 54c a gallon ethanol import tariff expires when the FY 2009 budget begins Oct 1, 2008;
  

• Indonesia's government will impose a 15% export tax if palm oil exceeds $1,100 a metric ton.
  
  

• Thai rice exporters could start defaulting on orders due to rapidly rising domestic rice prices, the Bangkok Post reported.
  
  

• The SEC is beginning to approve some "active" exchange-traded funds, which pick securities rather than simply track an index.

Russian economy succumbs to the oil curse
Nice Tsarist flats fetch $3m to $4m. Even Bolshevik boxes are booming. Moscow boasts 150,000 home millionaires in dollars, says Sergei Polonsky, the Mirax Group tycoon. In a good year, prices double

Quick Overview

• U.S. factory orders rose 2.3% in December-- less than expected. Excluding transportation, orders rose 0.7%.
  
  

• Australian home price rose 12% in 2007,
  
  

• Producer prices in the Euro area rose 0.1% in December and 4.3% YoY.
  
  

• Bush wants to spend $3.1 trillion in 2008-2009, up 76% since1999.
  
  

• China is building an enormous logistics facility covering nearly 70 hectares for the newly-launched Sino-Germany Container Railway. It is predicted that the volume of Germany-bound boxes on this railway will reach 20,000 to 26,000 TEU by 2010 while Beijing-bound boxes will be about 10,000 TEU.

Banana Republic, Without the Bananas…or the Republic How does an economy like this keep going? It depends on the kindness of strangers and the stupidity of friends. Who but a fool or a friend would buy a U.S. 30-year treasury bond at a 4.28% yield? This number is only a few basis points from the number for annual increases in consumer prices. Which means, if all goes well, investors can expect to make a return of zero on their investment over the next 30 years. And if all this talk of Zimbabwe economics and banana republic finances turns out to be true, they can expect to suffer another round of losses - measured in the trillions. And why shouldn't it be true? The American Empire is a bit like General Motors, says Martin Hutchinson. It has heavy fixed costs, an aging workforce, worn-out equipment, mammoth debts, and it is losing market share. At immense cost, America maintains its legions in more than 100 overseas garrisons. At home, the mobs call for bread. And every candidate for office - save the forgotten man, Dr. Ron Paul - offers more of it. "We cannot afford another year without decent wages because our leaders could not come together and get it done," said Barack Obama in South Carolina.

Global Finance and the Insanity Defense
French President Nicholas Sarkozy advanced the idea recently that the global financial system is "out of its mind."

Hidden Swap Fees by JPMorgan, Morgan Stanley Hit School Boards
What New York-based JPMorgan Chase didn't tell them, the transcript shows, was that the bank would get more in fees than the school district would get in cash: $1 million. The complex deal, which placed taxpayer money at risk, was linked to four variables involving interest rates. Three years later, as interest rate benchmarks went the wrong way for the school district, the Erie board paid $2.9 million to JPMorgan to get out of the deal, which officials now say they didn't understand.

Wheat Rallies, Extending Record in Minneapolis, on Low Supply
Another concern for farmers in the northern Plains is finding enough spring-wheat seed to plant. Supplies are low because some growers who normally grow seed wheat sold their crop as prices rose, said Louise Gartner, owner of Spectrum Commodities in Beavercreek, Ohio.

Quick Overview

• U.S. lost 17,000 non-farm jobs in January. This was the first monthly loss in 4-1/2 years and increases the likelihood the Fed will cut interest rates another half point next month.
  
  

• Microsoft wants to buy Yahoo for $45 billion in stock and cash.
  
  

• The Institute of Supply Managements' manufacturing index rose from 48.4 to 50.7
  

• U.S. Construction spending fell 1.1% MoM, and 2.6% YoY.
  

• The University of Michigan's consumer sentiment index rose from 75.5 to 78.4