Where Did the Money Go?
Fed Chairman Ben Bernanke has resisted calls from Congress that he release the names of the banks that were recipients of the bailout money the Fed gave to AIG to prevent it from collapsing. AIG insured its counterparties against losses from mortgage-backed derivatives. The Fed poured $85 billion into AIG, which paid out $37.3 billion of that money to counterparties that had purchased a certain type of derivative-based protection from AIG, called multi-sector credit default swaps.

The counterparties have never been disclosed but the Wall Street Journal reported that they included Goldman Sachs, Merrill Lynch, UBS and Deutsche Bank.

G20: the summit risks becoming the Kyoto of the economic meltdown
What all these policies assume, however, is that a propensity to borrow and spend still exists in the private sector, among consumers and companies. Borrow and spend (and tax and spend) is the Government's reflex action to any question but life is more complicated in the real world

Quick Overview

• (Bloomberg) -- Goldman Sachs Group Inc. cut its forecast for the global economy for the second time in eight days after predicting a deeper recession in Europe. “Following the reduction of our Euroland growth forecast to minus 3.6 percent in 2009, the world economy is now likely to contract by 1 percent this year,” said London-based Goldman economist Binit Patel.
  
  

• The U.S. trade deficit fell in January to the lowest level in six years. Exports were down 6% while imports were down 7%. The result was $36.0 billion of net imports, less than expected.
  

• The University of Michigan's consumer sentiment index rose from 56.3 to 56.6
  
  

• Canada’s unemployment rate rose to 7.7%
  

• The European car market shrank 18% in February
  

Quick Overview

• U.S. retail sales fell 0.1% in February, not as bad as expected.
  

• U.S. new jobless claims rose 15,000 last week to 654,000.
  

• Japan's GDP fell 3.2% in the fourth quarter of 2008
  

• Australia's unemployment rate rose from 4.8% to 5.2%
  

• Switzerland reduced its interest rate from 0.50% to 0.25%

• China's Premier Wen Jiabao expressed concern over the outlook for the U.S. government debt China holds and said he hopes the U.S. will ensure the safety of those assets.
  
  
  

• S&P lowered GE’s debt ratings one level to AA and raised the outlook to stable.

• Fitch cut Buffett’s Berkshire AAA debt rating to AA+
  

• Liechtenstein said it will relax its tradition of bank secrecy and promised closer cooperation with international tax-evasion probes according to OECD standards.
  

• Madoff pleaded guilty -- the judge ordered jail pending sentencing and revoked bail.
  

• (Bloomberg) -- U.S. household wealth fell by a record $5.1 trillion from October to December, almost twice the decrease in the previous quarter, as home values and stock prices plunged, Federal Reserve figures showed.
  

• U.S. Drought Monitor continues to show dry to severe drought conditions in Kansas, Oklahoma, and Texas.

• The China National Grain and Oils Information Center expects the country's output of grains in 2009 to be lower for the first time in six years.
  It projects wheat output to be down 1.3% to 111 million metric tons
  It projects corn output to be down 1.5% to 163 million tons
  It projects soybean output down 3.2% to 15 million tons
  
  

Quick Overview

• (FT) Democrats in the US Congress are drawing up plans for a second stimulus bill amid fears the first 787bn package was not enough.
  

• Canada’s new home prices fell 0.8% YoY
  

• Consumer sentiment in Australia fell from 85.8 to 85.6 in March
  

• The USDA's 2008-2009 U.S. ending crop report estimate for:
  Corn was lowered from 1.79 to 1.74 billion bushels.
  Soybeans were lowered from 210 to 185 million bushels.
  Wheat was raised from 655 to 712 million bushels.
  Sugar was reduced from 1.066 to .981 million tons.
  Cotton was reduced from 7.7 to 7.3 million bales.
  

• The USDA's 2008-2009 world ending stocks estimate for:
  Corn was raised from 137 to 145 million tons.
  Soybeans unchanged at 50 million tons.
  Wheat was increased from 150 to 156 million tons.
  Cotton was increased from 62 to 63 million tons.
  

• The USDA predicts 2009 U.S. beef production down 0.7% YoY
  

• The USDA predicts 2009 pork production down 1.4% YoY.
  
  

• The USDA predicts 2008-2009 Florida orange crops at 158 million boxes, down from 170 YoY.
  
  

• The U.S. DOE said that:
  Supplies of crude oil rose 700,000 barrels last week to 351.3 million barrels
  Supplies of gasoline fell 3.0 million barrels
  Supplies of heating oil rose 1.3 million barrels.
  Refinery use fell from 83.1% to 82.7% of capacity
  Gasoline demand rose 1.6% YoY
  Distillate demand fell 6.1% YoY.
  

• The U.S. is protesting to Israel over restrictions on deliveries to the Hamas-ruled Gaza Strip of harmless goods such as soap and toilet paper.
  
  

Quick Overview

• Citigroup said the company showed an $8.3 billion operating profit in the first two months of this year. Pandit said his bank is having the best quarter since 2007, when it last posted a profit.
  

• U.S. wholesale sales fell 2.9% in January
  U.S. wholesale inventories fell 0.7%.
  

• MoM U.K. industrial production fell 2.6% in January and 11.4% YoY.
  

• China's consumer prices fell 1.6% in February.

• YoY China’s exports fell 25.7%

• China's February auto sales rose 25% -- after tax cuts

• Brazil's economy shrank a larger-than-expected 3.6% QoQ
  

• The USDA said 63% of the winter wheat crop in Texas and 43% in Oklahoma are rated poor to very poor.
  

• The International Coffee Organization reduced its guess of 2008-2009 world coffee production from 133.4 to 127.8 million bags
  

• (Reuters) - Iran lacks weapons-grade highly enriched uranium and has not yet made a decision on whether to produce any, U.S. intelligence officials told Congress on Tuesday.

Time to examine emotions? Alarmed? Shocked? Desolate?

Quick Overview

• YoY Japan’s exports fell 46% in January
  

• Merck said it would acquire Schering-Plough Corp for $41.1 billion

Thanks to the Bank it's a crisis; in the eurozone it's a total catastrophe
As it is we have seen industrial production collapse in every region. The drops in January were: Japan (-31pc), Korea (-26pc), Russia (-16pc), Brazil (-15pc), Italy (-14pc), Germany (-12pc). Falls that took two years from late 1929 have been compressed into five months.

Quick Overview

• U.S. unemployment rate rose to 8.1% in February with a net loss of 651,000 jobs -- no worse than analysts had predicted.
  

• YoY U.K. Producer prices rose 3.1% in February.
  

• Residents of two northern Japanese villages have received the first $65 per person, from the government's controversial Y2 trillion cash handout scheme aimed at boosting consumer spending.

China's stimulus package looks like it's stimulating
Yet official data suggest the money being pumped through the economy is already putting some juice back into China's industrial sector. New orders to the industrial sector rose in January, driven by heavy industry. Growth in bank loans has also shot up. Both look like early signs that the stimulus is stimulating.

China can afford more later, if need be. The package so far will leave a fiscal deficit of under 3pc of GDP - high for China, but frugal by today's international standards. Total government debt as a percentage of GDP sits in the teens, a minimal level. And Beijing can always green-light projects while telling them to find finance on a commercial basis.

Quick Overview

• U.S. factory orders fell 1.9% in January, not as weak as expected

• U.S. jobless claims fell 31,000 last week to 639,000.
  

• U.S. productivity fell 0.4%.

• No stimulus package from China. Instead, it reaffirmed its belief that the current package will do the job.
  

• The Bank of England cut its interest rate from 1.00% to a record low 0.50%,
  

• The ECB cut rates from 2.00% to a record low 1.50%, as expected.
  

• GDP in the Euro area fell 1.5% in Q4, but rose 0.8% for all of 2008.

• Mortgage delinquencies rose to a 7.88% of all loans, the highest on record since 1972

• General Electric's GE Capital will be profitable for the first quarter and full year and won't need fresh capital except under an unlikely disaster scenario, the company's financial chief said.

• Shares of US Bancorp (USB) have bounced on reports that Rep. Barney Frank has said it and Northern Trust (NTRS) will give back their TARP funds.

Quick Overview

• The U.S. Institute of Supply Management index of services fell from 42.9 to 41.6

• (Reuters) - The Obama administration on Wednesday launched a $75 billion foreclosure relief plan, as new data showed one in five U.S. homeowners with mortgages owe more than their house is worth.
  

• Australia’s GDP fell 0.5%
  

• The U.S. DOE said:
  Supplies of crude oil fell 700,000 barrels 350.6 million
  Supplies of gasoline rose 200,000 barrels
  Supplies of heating oil rose 900,000 barrels.
  Refinery use rose from 81.4% to 83.1% of capacity.
  Gasoline demand rose 2.2% YoY
  Distillate demand fell 4.5% YoY.
  

• The Vietnam Coffee and Cocoa Association lowered its estimate of this year's coffee harvest from 17 to 16 million bags.
  

• The number of containerships sitting idle worldwide is said to have soared to an historic high of 453 ships, that is 1.35 million TEU or 10.7 per cent of the world's box tonnage, AXS-Alphaliner News reports.

• (Reuters) - Switzerland's largest bank held its ground on Wednesday in a dispute with the U.S. government, refusing to disclose the names of tens of thousands of rich American clients suspected by U.S. authorities of using secret Swiss bank accounts to dodge U.S. taxes.

• The collapse of the Historical Archive of Cologne on Tuesday buried more than a millenium's worth of documents under tons of rubble. Archivists and historians hope something can be salvaged, but the future of the city's past is grim.

EU pledges eurozone rescue Europe's financial authorities have revealed the existence of a contingency plan to rescue eurozone states at risk of default, giving the first clear assurance that the EU will mount a defence if monetary union comes under speculative attack.

China May Announce New Stimulus Measures Tomorrow (Update3)
March 4 (Bloomberg) -- Chinese Premier Wen Jiabao may announce new stimulus measures tomorrow, adding to a 4 trillion yuan ($585 billion) spending plan as the government tries to revive growth in the world’s third-biggest economy.

Quick Overview

• U.S. pending home sales fell 7.7% in January, weaker than expected.
  

• Australia kept rates unchanged at 3.25%
  

• Canada reduced its interest rate from 1.0% to .50%
  

• Fed Chairman Bernanke said policy makers may need to expand aid to the banking system beyond the $700 billion already approved.
  

• (Bloomberg) -- The Federal Reserve lifted executive- compensation limits for sponsors of asset-backed securities accepted under a new $1 trillion loan program.
  

• The International Cocoa Organization expects world cocoa production down 5% in 2008-2009, and a supply deficit of 193,000 tons.

• Ford reports February sales fell 48.4%.

• Canada’s largest lumber producer, said it would expand shutdowns of sawmills

• (Bloomberg) -- Chinese state stockpiling of copper may mean the withdrawal of about a quarter of the metal held in warehouses

• CIUDAD JUAREZ, Mexico (Reuters) - Hundreds of heavily armed soldiers fanned out across Mexico's bloodiest drug war city on Tuesday, trying to prevent a collapse in law and order just south of the U.S. border.

• EU officials voted to impose a duty on biodiesel imports from the U.S. to counteract a U.S. tax credit.

• California Governor Arnold Schwarzenegger has called on world leaders to stop "whining and complaining" about the economic slowdown.
  
  

Quick Overview

• U.S. Personal incomes rose 0.4% in January
  

• U.S. consumer spending rose 0.6% -- snapping six months of declines.

• U.S. Construction fell 3.3% MoM -- the 13th consecutive month of declines.
  

• The U.S. Institute of Supply Management's index of manufacturing rose from 35.6 to 35.8
  

• Canada’s GDP fell 0.8% in Q4
  

• U.K.’s manufacturing index fell from 35.8 to 34.7 in February, the 10th consecutive month of declines.
  

• YoY Japan’s auto sales fell 32% in February.
  

• AIG, the walking dead insurance giant is back in the government trough for another $30 billion.

Buffett Says Economy ‘In Shambles,’ Promises Better Days Ahead
“The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” said Buffett. “Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so.”

New 'Iron Curtain' will split EU's rich and poor
The spectacular collapse of some of the post-communist tiger economies led to demands at an EU summit in Brussels for a rescue fund of €190 billion (£170 billion) to stop social collapse in the Eastern nations spilling over into the rest of Europe.

We need shock and awe policies to halt depression Factory output is collapsing at the fastest pace everywhere. The figures for the most recent month available are, year-on-year: Taiwan (-43pc), Ukraine (-34pc), Japan (-30pc), Singapore (-29pc), Hungary (-23pc), Sweden (-20pc), Korea (-19pc), Turkey (-18pc), Russia (-16pc), Spain (-15pc), Poland (-15pc), Brazil (-15pc), Italy (-14pc), Germany (-12pc), France (-11pc), US (-10pc) and Britain (-9pc). Norway sails blissfully on (+4pc). What do they drink up there?