Europe sold off and oil fell on news that German GDP contracted in the fourth quarter. Renewed fears of recession surfaced as investors took some profits.

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Don’t forget what happened last time…

The Obama administration will be asking Congress to raise the debt limit in the coming days, White House press secretary Jay Carney said on Tuesday.

“I’m confident it will be executed in a matter of days, not weeks,” he told reporters.

Read the rest here.

Net sales equate to net hiring or firing….

According the ECRI inflation is tame. Does that mean deflation is stronger than we think ?

Birinyi expects markets to rally 8% as the bears capitulate….

Imports slowed to 11.8% vs expectations of 13.4%

Is that due to there being no more manufacturing left…lol. Not funny.

The IMF’s Lagarde says there is reason to be upbeat as many things have changed over the last 18 months.

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China’s lending increased much more than expected lending to a soft landing and better growth prospects.

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Not good for one of the stronger economies in the world.

Hopefully this is due to an influx of more foreigners becoming citizens….otherwise it means the old will work longer and that a new baby boom is probably underway.

“SAN FRANCISCO (MarketWatch) — Investors are expected to increasingly focus on corporate news next week as U.S. companies enter the earnings-reporting season. But Europe won’t be far from their minds as the continent’s sovereign debt woes show little sign of abating.

“Attention is certain to turn to earnings next week. Investors will attempt to quantify the extent of earnings damage from the economic turmoil in Europe,” said Bill Stone, chief investment strategist of PNC Asset Management Group.”

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Caution is better than at your own risk or not at all. The recent U.S. economic data has been strong lately, but some caution to wait and see if the recent uptick was a holiday binge or if it is the start of better things to come.

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(via foxbusiness.com)

Former Federal Reserve Board Chairman Alan Greenspan clearly reveled in his reputation as a mystical overseer of U.S. fiscal policy, an oracle whose vision and judgment rose above the banalities of common economic debate.

In hindsight, that didn’t work out so well. It turns out real estate prices wouldn’t rise forever.

The 2008 financial crisis and its extended aftermath have put a significant dent in Greenspan’s reputation, not to mention the Fed’s. Now it seems Greenspan’s successor, Ben Bernanke, is on a one-man mission to restore that reputation.

A key element of Bernanke’s strategy has been increasing transparency related to Fed policy decisions and generally seeking to demystify the once-secretive entity, essentially taking the opposite approach as Greenspan.

Bernanke’s open-door policy has picked up steam as the U.S. economy has struggled to recover from the deep recession that followed the collapse of the U.S. housing market.

First it was press conferences, unprecedented for the top policy maker of the U.S. central bank. Now, in a move announced earlier this week, the Fed plans to start publishing its forecasts for interest rates, presumably in an effort to provide business owners and investors greater clarity regarding future policy decisions that may spring from the Fed.

What this means is that the Fed, beginning at its January 24/25 meeting, will release interest rate forecasts provided by Fed policy makers. In addition, the Fed will release specific predictions from policy makers as to when the Fed might start raising interest rates.

Long-time Fed watchers recall that the Fed only started announcing its interest rate changes in 1994.

“I think (the shift toward transparency) is a good thing. It should help businesses gauge their activity based on the fact that the Fed won’t surprise,” said Peter Cardillo, chief market analyst at Rockwell Global Capital. “At least they’ll try not to surprise. Anything can happen.”

The thinking goes that if employers are fairly certain that interest rates are going to remain low for the foreseeable future, that certainty might serve as a powerful incentive to take advantage of these historically-low interest rates to borrow money for expansion.

“From that perspective, it might help employers to accelerate hiring,” said Cardillo.

Cardillo said Bernanke seems willing to take unorthodox steps, including opening up the Fed to closer public scrutiny, for several reasons. First, he’s “desperately trying to get the economy growing at a more respectable level,” according to Cardillo.

Second, Bernanke wants to restore the Fed’s credibility in the wake of criticism that Fed policy makers were asleep at the wheel as the U.S. credit bubble expanded at an alarming rate a decade ago as borrowing levels rose unchecked.

Finally, Cardillo believes a bit of certainty in the U.S. could provide some much-needed counterbalance to the pervasive uncertainty overseas, primarily in Europe where the long-running debt crisis has threatened a global meltdown for over two years.

Simply put, the Fed’s rate projections are intended to allow businesses to adjust to potential shifts in interest rates well in advance of the actual change.

Interest rates were lowered to a range of 0.25% to 0% over three years ago during the worst of the financial crisis in an effort to spur lending and give a boost to the ailing U.S. economy.

Historically low interest rates weren’t enough to lift ailing housing and labor markets, however, so the Fed got creative. First by introducing massive bond buying programs that pumped more than $2 trillion in cash into the economy, and later by shifting its portfolio to include a higher percentage of long-term securities. The latter was an effort to boost the moribund housing market by driving down mortgage rates.

Neither of these purely fiscal policies has had much of an impact.

In April, Bernanke held the first press conference ever by a U.S. Fed chairman. Then in August the Fed broke from its long-standing tradition of avoiding specific timelines by announcing it would keep interest rates at their current low levels until at least mid-2013. Each of these two transparency moves was intended to open up the Fed process and reduce uncertainty.

“I think the secrecy of the Fed hasn’t worked, especially in this past financial market,” said Mark Williams, a former Federal Reserve Bank examiner and a finance lecturer at Boston University.

Williams takes a less benevolent view of Bernanke’s transparency strategy, arguing that the Fed chairman seems determined to put the Fed back in control of the fiscal steering wheel.

The Fed has been dragged “kicking and screaming” to its new policy of openness, Williams said, pushed by markets that have grown skeptical of the Fed’s ability to influence the sluggish economy.

“Over the last 3½ years the markets haven’t been pleased with how central banks have handled financial crisis,” said Williams, citing both rounds of quantitative easing, the two programs in which the Fed bought massive quantities of government bonds.

“The Fed has become reactionary,” he said. “Instead of the market reacting to the Fed, the Fed has been reacting to the market. Bernanke wants to get back in control. It’s a perception game, a PR campaign.”

By releasing interest rate projections, the Fed is trying to get out ahead of the markets, Williams explained. In any case, Williams said he generally applauds the effort.

“Markets work best when they have timely, accurate and transparent information. The Fed is coming into the 21^st century kicking and screaming, but at least it’s making the attempt,” he said.

Read more: http://trade.cc/wju#ixzz1inU6d64z

Looks like the online shopping business has provided a large seasonal boost to the employment survey.

Employment in transportation and warehousing rose sharply in December (+50,000). Almost all of the gain occurred in the couriers and messengers industry (+42,000); seasonal hiring was particularly strong in December. [Emphasis mine]

Full BLS report is here.

Rail car growth is up 2.2% for 2011

China is going to focus on energy savings consumption and online commerce…

Odd no ?

That’s incredible, as I could have sworn just yesterday every expert knew an Iranian oil embargo would most definitely cause a price spike. Where do these news stations find their elusive “most experts” I wonder?

Read here:

Despite the uptick in oil prices thanks to Iran’s threats last week, experts don’t foresee a major oil price spike even as evidence mounts that tougher oil sanctions against the country are beginning to bite.

Crude prices have risen about 2% since Iran vowed to shut down the Strait of Hormuz last week. About a sixth of the world’s oil production passes through the Strait.

It is believed that Iran’s posturing is the result of ever tightening sanctions as Iran spars with the West over its nuclear program. Iran says its nuclear intentions are peaceful, but many experts suspect they are designed to produce weapons.

On Wednesday the noose around Iran’s economy tightened further. Reports said Europe may be close to enacting an outright oil embargo on Iran. About 15% of Iran’s oil exports go to Europe.

The European news comes after President Obama sanctioned Iran’s central bank last month in an attempt to restrict Iran’s oil exports and a similar, stronger move from England.

CNBC – Despite record low mortgage rates reported today and rising affordability in most U.S. housing markets, rent is the new reality for former home owners and new households alike.

For some it is post-traumatic stress from the housing crash, for others it is the inability to get financing to buy a home. Either way, the rental market continues on its tear.

In the last quarter of 2011, the apartment sector saw its largest quarterly increase in occupied stock of the year, according to Reis, Inc.

The vacancy rate dropped to 5.2 percent, the lowest since 2001 and lower than the last cyclical drop in 2006.

This bucks the historical seasonal weakness typical of the colder months of the year. The fourth quarter also tends to be a weaker leasing period, according to Reis, given that most households make moving decisions in the second and third quarters.

This surge in occupancy pushed asking and effective rents up 0.4 and 0.5 percent respectively, which Reis calls the only disappointing figures for the sector, missing expectations. Reis blames that on slow economic growth and still high unemployment.

“Higher quality properties in the most desirable locations posted rent gains in excess of 5-10 percent, while class B/C properties, catering to lower income tenants, found it relatively more difficult to raise rents,” notes Victor Calanog, head of research at Reis.