Defaults May Beat Great Depression, Junk Bonds Say
Defaults and bankruptcies are accelerating as financing options for high-yield companies dwindle amid the longest U.S. economic recession in at least 26 years. The U.S. default rate rose to 3.3 percent in October, according to Moody’s, which forecasts the rate to increase to 4.9 percent in December and 11.2 percent by November 2009.

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• U.S. nonfarm productivity rose 1.1% QoQ
  

• U.S. Unit labor costs rose 2.8% QoQ
  

• The ISM index of services fell from 44.4 to 37.3 -- new record low.
  

• The Mortgage Bankers Association said U.S. mortgage applications rose 51% WoW -- helped by a 30-year fixed rate at 5.47%.
  

• Australia’s GDP rose 0.1% QoQ and 1.9% YoY
  

• Retail sales in the Euro area fell 0.8% MoM and 2.1% YoY
  

• Services for the Euro zone fell from 45.8 to 42.5
  

• The U.S. Department of Energy said:
  Supplies of crude oil fell 400,000 barrels to 320.4 million barrels.
  Supplies of gasoline fell 1.6 million barrels
  Supplies of heating oil fell 2.1 million barrels.
  Refinery use fell from 86.2% to 84.3% of capacity last week.
  Gasoline demand fell 3.2%

• More than 100 countries sign cluster bomb ban. The U.S., China, India, Israel, Pakistan and Russia are among countries refusing to sign the ban.

World stability hangs by a thread as economies continue to unravel
The working assumption of the "Great Boom" is – or was – that we live in a benign era where most societies are converging towards some form of market liberalism; where trade and capital flows are unrestricted; where governments have enough legitimacy to keep order by light touch; where a major war is unthinkable.

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• Australia reduced its interest rate from 5.25% to 4.25%,
  

• Producer prices in the Euro area fell 0.8% in October, but rose 6.3% YoY.

• Thailand reduced its interest rate by 1% to 2.75%
  

• November U.S. vehicle sales for:
  Ford fell 31% YoY
  GM fell 41% YoY
  Chrysler fell 47% YoY
  Toyota were down 34% YoY
  Honda were down 32% YoY.

• (Bloomberg) -- Stocks in the U.S. and Europe will withstand a “full-blown” global recession to surge in 2009, UBS AG said.

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• Bernanke said the Fed could directly buy securities and backstop markets as interest rates approach zero.

• The Institute of Supply Management's manufacturing index fell from 38.9 to 36.2 in November.
  

• U.S. construction spending fell 1.2% MoM.
  

• Canada’s GDP rose 0.5% YoY.
  

• Manufacturing in the U.K. fell from 40.7 to a record low of 34.4 in November.
  

• Euro zone manufacturing fell from 41.1 to a record low of 35.6 in November.
  

• OPEC members met but did not announce any production cuts.
  

• The International Cocoa Organization estimated that world consumption exceeded production by 77,000 tons in 2007-2008.

• Retailers got off to a better than expected start for the holiday shopping season, with consumers spending an estimated 7.2% more this year than last.

• Ford may sell Volvo

Citigroup says gold could rise above $2,000 next year as world unravels
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

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• Euro area unemployment rate rose from 7.6% to 7.7% in October, the highest in two years.
  

• YoY Japan’s consumer prices rose 1.7% in October
  Japan’s industrial production fell 3.1%
  Japans’ household spending fell 3.8% in October.
  Japan’s unemployment rate improved from 4.0% to 3.7% in October

• NEW YORK (Reuters) - A man working for Wal-Mart was killed on Friday when a throng of shoppers surged into a Long Island, New York, store and physically broke down the doors, a police spokesman said.

• MOSCOW (Reuters) - Russia's military said on Friday it had intensified efforts to develop new ballistic missiles in response to U.S. plans to deploy an anti-missile system in Europe and Russia's navy test fired a new generation rocket.

Possible Geopolitical Consequences of the Mumbai Attacks (Stratfor)
It is not clear the degree to which the Pakistani government can control the situation. But the Indians will have no choice but to be assertive, and the United States will move along the same line. Whether it is the current government in India that reacts, or one that succeeds doesn’t matter. Either way, India is under enormous pressure to respond. Therefore the events point to a serious crisis not simply between Pakistan and India, but within Pakistan as well, with the government caught between foreign powers and domestic realities. Given the circumstances, massive destabilization is possible — never a good thing with a nuclear power.

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• U.S. orders for durable goods fell 6.2% in October, weaker than expected. Excluding transportation, orders fell 4.4%.
  

• U.S. New home sales fell 5.3% MoM. YoY new home sales are down 37%.
  

• The University of Michigan's consumer sentiment index fell from 57.6 to 55.3.
  

• U.S. personal incomes rose 0.3% in October
  

• U.S. Consumer spending fell 1.0%.
  

• The Chicago index of purchasing managers fell from 37.8 to 33.8 in November.
  

• The European Union is plotting a 200 billion euro stimulus plan.
  

• Australia's construction activity rose 4.4% in September
  

• China cut its interest rate from 6.66% to 5.58%,
  

• Ports in China registered a 6% per YoY volume growth in October.
  

• The World Bank expects China's economy to expand 7.5% in 2009 - down from its earlier forecast of 9.2%
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 7.3 million barrels to 320.8 million barrels.
  Supplies of gasoline rose 1.9 million barrels
  Supplies of heating oil fell 400,000 barrels.
  Refinery use rose from 84.9% to 86.2% of capacity last week.
  Gasoline demand fell 2.8% YoY
  Distillate demand fell 2.2% YoY.
  

Is Britain going bankrupt?
Today they reached 86 basis points, near Portuguese debt in the league table. For good reason. Alistair Darling has had to admit that the British economy faces the most sudden economic collapse since World War Two, and the worst budget deficit of any major country in the world.
Ok, this is a lot lower than Iceland, Ukraine, Hungary, and other clients of the IMF, but is significantly higher than Germany (35), USA (43), and France (49).

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• Helicopter Ben is working hard. The Fed threw a massive $800 billion life-line to consumers with two new programs aimed at making it easier for them to obtain loans for homes, cars and on credit cards.
  

• U.S. GDP shrunk at an annual rate of -0.5% in the third quarter, down from the previous estimate of -0.3%.
  

• The U.S. GDP price index rose 2.7%.
  

• YoY U.S. Corporate profits fell 9.0%.
  

• The Conference Board's consumer confidence index rose from 38.8 to 44.9 in November,
  

• YoY S&P/Case-Shiller national index fell 17% in September.
  

• The World Bank predicted real GDP in China will be up 7.5% in 2009,
  

• Canada’s retail sales rose 1.1% in September.
  

• BHP Billiton scrapped its hostile bid for Rio Tinto because of slumping commodity prices.

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• The U.S. Government agreed to stabilize Citigroup by guaranteeing $306 billion in troublesome assets. It also gave Citi $20 billion in exchange for preferred stock.
  

• The National Association of Realtors said Home resale’s fell to a 4.98 million annual rate, a 3.1% decrease from September's revised figure.
  The median-sales price declined to $183,300.

• Industrial new orders in the Euro area fell 3.9% in September. YoY orders fell 1.1%.
  

• YoY GDP in Chile rose 4.1%
  

• Consumer confidence in Canada dropped further in November to a fresh 26-year low, the Conference Board of Canada said.
  

• Hungarian central bank cut its base rate by 50 bps to 11%
  

• The USDA said there were 10.97 million head of cattle on feed as of November 1st, down 6.8% YoY.
  

• The USDA said frozen pork supplies at the end of October were up 4% YoY
  

• The terminal operator of China's Cosco Group, said throughput increased 14.1 % in October, but fell 8.5 % at its Cosco-HIT facility in Hong Kong.

• In the latest issue of The New Yorker magazine, Bernanke has recognized he was wrong to believe there would be limited fallout to financial markets from the US housing market's collapse.

Recession’s Grip Forces U.S. to Flood World With More Dollars
Investors, shell-shocked by the turmoil, are piling into super-safe Treasury securities, even as the U.S. government ships more supply out the door. Three-month bill rates dropped last week to 0.01 percent, the lowest since at least January 1940, and yields on Treasuries maturing in two through 30 years all fell to the least since the government began regular sales of the securities.

Geithner could slow bank-stock assault
But even analysts who have long been skeptical of Citi says its recent trading price understates the firm's true worth. "We believe that there is fundamental value at Citigroup that justifies a $9 price target," Deutsche Bank analyst Mike Mayo wrote Friday

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• Asian markets defied the big U.S. slump overnight and ended higher. Japan's Nikkei rose 2.7%, South Korea's Kospi rose 5.8%.
  

• Japan kept the interest rate at 0.30%
  Japan's Finance Minister said he may consider intervention to bring the yen down from "undesirable" levels.
  
  

• Manufacturing and services index in the Euro area dropped from 43.6 to 39.7
  

• YoY Canada’s consumer prices rose 2.6%
  

• Consumer spending in France fell 0.4% in October.
  

• The World Gold Council said world gold demand was 1,133 tons in the third quarter of 2008, up 18% YoY.
  

• The International Copper Study Group said that world copper production exceeded use by 125,000 tons in August.
  

Markets wary of Irish debt as fresh rescue looms
This is a disturbing pattern across Europe as the global credit crisis drags on, with extreme cases in Iceland, Ukraine, Russia, Hungary and Latvia. There are fears that investors could start to shun sovereign debt in Western states where banks have outgrown the underlying economy.

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• Citigroup began weighing the possibility of auctioning off pieces of the company or even selling itself outright. Shares fell a further 26%.

• U.S. Jobless claims rose 27,000 last week to 542,000, the most in 16 years. The Senate is voting today on extending unemployment benefits by at least seven weeks. Bush is for it.
  

• The Philadelphia Feds regional index of manufacturing dropped from -37.5 to -39.3 in November,
  

• The Conference Board's index of leading indicators fell 0.8% in October.
  

• U.K. retail sales fell 0.1% in October.
  

• Canada’s wholesale trade rose 1.5% in September
  

• Switzerland lowered interest rates from 2.0% to 1.0%.
  

• Fifteen CEOs of large home-building and financial-services firms each earned more than $100 million during the past five years.
  
  

Bank fears over home loan aid Under the plans, which could be a model for other efforts, homeowners are eligible for help if they are behind on payments for 90 days and pay more than 38 per cent of their income on mortgage payments.

Quick Overview

• U.S. consumer price index fell 1.0% in October but rose 3.7% YoY
  

• U.S. housing starts were at an annual rate of 791,000 in October, down 4.5% MoM, and down 31% YoY.
  

• Canada’s index of leading indicators fell 0.4% in October
  

• Construction output in the Euro area fell 1.3% in September.
  

• The U.S. Department of Energy said:
  Supplies of crude oil rose 1.6 million barrels last week to 313.5 million barrels.
  Supplies of gasoline rose 500,000 barrels
  Supplies of heating oil supplies were up 400,000 barrels
  Refinery use rose from 84.6% to 84.9%
  Gasoline demand fell 2.2% YoY.
  Distillate demand fell 3.3% YoY.
  

• The USDA said that world ending stocks of sugar will be 24% in 2008-2009
  
  

Quick Overview

• U.S. producer price index fell 2.8% in October, the biggest monthly decline on record.
  

• U.K. consumer prices rose 4.5% in October.
  

• Asia's two largest economies offered financial aid to needy nations: Japan promised $100 billion in loans to the IMF; China offered Pakistan a $500 million aid package.
  

• YoY the median price of a U.S. home fell 9%, the Chicago- based National Association of Realtors said today.