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.

Robert Fisk: So, I asked the UN secretary general, isn't it time for a war crimes tribunal?
After killing hundreds of women and children, Israel was the good guy again, by declaring a unilateral ceasefire that Hamas was certain to break. But Obama will be smiling on Tuesday. Was not this the reason, after all, why Israel suddenly wanted a truce?

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.

Terribly Bloodied, Still Breathing
A Report From Gaza

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.
  
  
  

Quick Overview

• U.S. jobless claims rose 54,000 to 524,000.
  

• U.S. producer price index fell 1.9% MoM and 0.9% YoY
  

• The New York Fed’s index of manufacturing improved from -27.88 to -22.20.
  

• The Philadelphia Fed index of manufacturing improved from -36.1 to -24.3
  

• YoY RealtyTrac said U.S. foreclosures rose 81.
  

• The European Central Bank cut its interest rate from 2.50% to 2.00%
  

• Democrats in the U.S. House will push for a $825 billion economic stimulus
  

• News that Bank of America needs another government cash infusion sent stocks sliding.
  

• Consumer prices rose 1.6% in the Euro area
  

• Australia's unemployment rate rose from 4.4% to 4.5% MoM
  

• YoY South Africa’s gold production fell 8.7% in November
  

• According to unidentified industry sources in Singapore, an increasing number of containers were being shipped from Asia to Europe at a freight rate of zero dollars and shipping lines were only charging the bunker fuel cost.
  

• The UN's Gaza City HQ is shelled by Israel.
  

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.