Saturday, February 13, 2010


2/13/10 China

Doug Noland: "China’s bank loans expanded $202bn – in January. This must be the greatest month of loan growth for a national banking system in the history of mankind. On the back of about $1.3 TN of loan expansion, Chinese home prices were up 9.5% y-o-y. January crude imports were up 33% y-o-y, while copper imports were up 25% y-o-y. January power consumption was up 40% from a year earlier (against a weak comparison). With GDP and real estate prices expanding at around double-digit rates, one would typically expect policymakers to be preparing to slam on the brakes. These are atypical times.
The People’s Bank of China raised bank reserve requirements 50bps today, the second such hike in the past month. This heightened market fears that Chinese authorities are determined to implement real monetary tightening. For an economy experiencing unprecedented “hot money” inflows, bank lending, and “animal spirits”, count me skeptical that marginal changes in reserve requirements will be all that effective in reining in systemic excesses.....Serious financial and economic issues at the “Core” (U.S.) have unleashed Credit systems at the “Periphery” (i.e. China, Brazil, India, Asia, and the “emerging markets”). There is no global monetary anchor, and it’s inflationism as far as the eye can see...I have written my view that China has commenced its “terminal phase” of Credit Bubble excess. There is ample evidence supporting this analysis. Chinese policymakers have begun to respond, and jittery global markets are worried. The risks – domestic and global – of a bursting Chinese Bubble are enormous. Yet when (“terminal”) Bubble risks turn quite high, policymakers tend to turn more timid. I expect this to be the case in China – but I could be wrong. And there is certainly the possibility that even gingerly policy “tightening” could set in motion unintended consequences including faltering asset markets and bursting Bubbles."

Dan Dorfman: "In early March of 44 B.C., a soothsayer warned Julius Caesar about the Ides of March. Unfortunately, Caesar ignored the warning, and we all know the rest of the sad tale.

Harry Dent Jr., a former consultant to Fortune 100 companies and presently publisher of HS Dent Forecast, a monthly investment newsletter in Tampa, Fla., sees a similar kind of fate for the stock market, although he has expanded the time frame of his Ides of March scenario to somewhere between early March and late April.

In brief, Dent sees the stock market--currently benefiting from upward momentum and peppier economic activity--headed for a very brief and pleasant run that could lift the Dow to the 10,700-11,500 range from its current level of about 1,093. But then, he sees the market running into a stone wall, which will be followed by a nasty stock market decline that could drive down the Dow later this year to 3,000-5,000, with his best guess about 3,800.

A forecast of a possible 3,000 Dow this year might strike you as crazy. It does me. But Dent is no whack-o."

Verizon Wireless, the largest U.S. wireless carrier, will include Skype Technologies SA’s Internet- calling software on phones to stave off competition from AT&T Inc., according to two people familiar with the matter.

ZeroHedge: "The January Moody's CMBS delinquency rate hit a record at 5.42%, after posting the largest one month increase (50 bps) in history. While the deplorable state of CMBS is not a secret to anyone following RealPoint's monthly delinquency data, getting confirmation from a procyclical firm such as Moody's should be enough to wake up some of the optimists that even thought "everyone is talking about the commercial real estate" collapse, nothing is being done to actually fix the underlying causes. Anyone recall "contained" Dubai and its freshly record CDS spreads?"

Nationwide, the number of homes heated with oil dropped to 7 percent in 2008 from 32 percent in 1960. Consumption of heating oil for residential customers is about half of what it was 20 years ago, according to Energy Information Administration records.
The percentages of homes heated by gas and electricity, meanwhile, have jumped to 51 percent for gas and 34 percent from electricity.
Even in the Northeast, where 80 percent of all heating oil in the U.S. is used, the number of homes relying on oil has been on the decline for a generation as more gas becomes available in the region.

Friday, February 12, 2010


2/12/10 China

The dollar remained higher on Friday, extending gains against the Japanese yen, after a report showed U.S. retail sales rose 0.5% in January, more than economists expected and reversing a revised 0.1% decline in December. Excluding autos, sales rose 0.6%. The report is not adjusted for price changes!

The European economy grew 0.1% in the fourth quarter, according to government data released today.

The People's Bank of China said on Friday that it will raise the reserve requirement ratio for banks, according to the Wall Street Journal.

The reserve ratio will now increase by half a percentage point from Feb. 25, following a similar increase earlier this year.

After the increase is implemented, major banks will have to keep 16.5% of their deposits on reserve, according to the Journal. The move is seen as an attempt to control lending and prevent a housing bubble in China.

Puru Saxena: " America is funding a large portion of its newly issued debt by direct purchases from the Federal Reserve. In other words, as private-sector demand for US Treasuries wanes, Mr. Bernanke is creating new money so that Mr. Obama's government can bail out insolvent financial institutions. Strangely, the American establishment is quite content to pledge the economic fate of its future generations in order to protect the bondholders of dubious 'too big to fail' corporations. Hmm, talk about change."

NY Times: "With 14.8 million Americans unemployed, the proposal put forth in the Senate to respond to joblessness is so puny as to be meaningless."

Video game sales plunge 13% in January.

Activision lays off about 200 employees, shuts down Santa Monica Luxoflux studio.

Debt problems in foreign countries are now also a problem for US investors, Pimco's Mohamed El-Erian told CNBC.

CME is raising margin requirements for gold, silver and palladium.

The Energy Department on Thursday is expected to report a draw of 177 billion to 181 billion cubic feet of natural gas storage inventories for the week ended Feb. 5, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

Working gas in storage was 2,215 Bcf as of Friday, February 5, 2010, according to EIA estimates. This represents a net decline of 191 Bcf from the previous week. Stocks were 172 Bcf higher than last year at this time and 114 Bcf above the 5-year average of 2,101 Bcf. In the East Region, stocks were 1 Bcf above the 5-year average following net withdrawals of 116 Bcf. Stocks in the Producing Region were 54 Bcf above the 5-year average of 682 Bcf after a net withdrawal of 60 Bcf. Stocks in the West Region were 60 Bcf above the 5-year average after a net drawdown of 15 Bcf. At 2,215 Bcf, total working gas is within the 5-year historical range.

American consumers were more pessimitic about the path of the economy in February, according to media reports of a survey released Friday by the University of Michigan and Reuters. The UMich index fell to 73.7 in February from 74.4 in January. Consumers were more upbeat about currrent economic conditions, with the current index rising from 81.1 in January to 84.1, the highest since March 2008. However, attitudes about the near-term deteriorated, with the expectations index falling to 66.9 in February from 70.1 in January. Expectations had risen three months in a row. Economists surveyed by MarketWatch were expecting the UMich index to rise to about 76.0.

Inventories at U.S. businesses fell 0.2% in December, below expectations and slower than the 0.9% increase in sales, the Commerce Department said Friday. Economists had been expecting the nation's inventories to be flat in December, according to a survey conducted by MarketWatch. The inventory-to-sales ratio, an indication of demand, fell to 1.26 in December from 1.27 in the prior month. This is the lowest level since November 2007.

An independent director committee of Alcon said Friday that the company's strong earnings reinforce its belief that Novartis' proposal is "grossly" inadequate. Alcon late Thursday reported that its fourth-quarter profit rose to $1.51 a share from $1.41 a share in the same quarter last year. Revenue increased to $1.72 billion from $1.5 billion. "We hope these results inspire Novartis to reconsider their proposal and their attempt to force their offer on Alcon's minority shareholders, many of whom are Alcon employees," Thomas Plaskett, chairman of the committee, said in a statement. Novartis had recently exercised an option to buy 52% stake in Alcon for $28.1 billion, or $180 a share, from Nestle (NSRGY) and is trying to buy the remaining shares of Alcon that it doesn't already own.

The federal government's debt limit will rise to $14.3 trillion from $12.4 trillion under a law enacted Friday by President Barack Obama. The law also puts in place "pay-as-you-go" rules requiring that increases in spending be offset with cuts in federal outlays. The House sent the bill to Obama earlier this month, following Senate approval in late January.

The Dow Jones Industrial Average fell 45.05 points, or 0.4%, to 10,099.14, leaving the blue chips up 0.9% from the week-ago close. The S&P 500 Index declined 2.96 points, or 0.3%, to 1,075.51, leaving it up 0.9% for the week. The Nasdaq Composite Index added 6.12 points, or 0.3%, to 2,183.53, giving it a 2% weekly gain.

Thursday, February 11, 2010


2/11/10 Foreclosures

First-time claims for state unemployment benefits fell by the largest amount since July. The number of initial claims in the week ending Feb. 6 fell 43,000 to 440,000. This was a sharper drop than expected. The consensus forecast of Wall Street economists was for claims to drop to 460,000. Claims are now at their lowest level since Jan. 2. Claims had spiked in January, reversing a downward trend. Labor Department officials had pinned the increase on administrative backlogs in several states. With today's report, the official said the backlogs had been "washed out."

The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending Jan. 30, unchanged from the prior week's unrevised rate of 3.5 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Jan. 30 was 4,538,000, a decrease of 79,000 from the preceding week's revised level of 4,617,000. The 4-week moving average was 4,603,500, a decrease of 17,750 from the preceding week's revised average of 4,621,250.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.322 million.

There seems to be no end to the foreclosures in the nation. With the modification program failing to rescue home owners, a total of 315,716 U.S. homes received a filing in January this year, thus exceeding 300,000 for the 11th month in a row.

Though the foreclosures are up 15 percent compared to the same period a year earlier, they are down 10 percent compared to the foreclosures reported in December.

As per the report released by California-based RealtyTrac, one in every 409 households received a foreclosure filing last month.

Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will come to the end of their terms. Almost half of those are now under water, the result of a drop of more than 40% in commercial property values since 2007.

Euro-zone countries will provide "determined and coordinated action if needed" to preserve stability, European Council President Van Rompuy said, but he gave few details of how that would be provided and no indication that direct aid to Greece was imminent.

China's central bank says risks to price stability have risen, and warns it will strictly control loans to new investment projects. PBOC's Q4 monetary policy report, released this morning, gave the clearest sign yet it is beginning to scale back some of its extraordinary stimulus policies.

Economic Disconnect: "Does the United States Have a Debt Chandrasekhar Limit?

The Chandrasekhar Limit is defined as:
"For main-sequence stars with a mass below approximately 8 solar masses, the mass of this core will remain below the Chandrasekhar limit, and they will eventually lose mass (as planetary nebulae) until only the core, which becomes a white dwarf, remains. Stars with higher mass will develop a degenerate core whose mass will grow until it exceeds the limit. At this point the star will explode in a core-collapse supernova, leaving behind either a neutron star or a black hole."

Arthur Laffer, former head of the Office of Management and Budget, has decided that President Obama’s 2011 budget “is the perfect plan for catastrophe.”

The US Northeast began to dig out after two blizzards in a week brought the region to a standstill with record snowfalls, creating a multimillion-dollar mess for cash-strapped cities and states.

Another storm is predicted for Monday in Washington, which will likely cause additional groans from budget officials—and those weary of winter.

Millions of “pre-retirees” aged between 55 and 64 are being unrealistic about the size of their private pensions and living in a state of denial about their finances, experts say.

In a CNBC interview on Feb. 10, Marc Faber went out on a limb saying ALL governments will eventually default, including the United States. From all indications, this is a fairly plausible scenario.

Each month the NFIB tallies small-business optimism, or pessimism, which has been the dominant emotion of late. At 89.3 in January, the index is up 8.3 points from its March low, yet it’s languished under 90 for a record seven quarters. The only other time the index plumbed those depths, and for one quarter only, was during the 1980-1982 back-to-back recessions. The news from the nation’s growth engine is getting less bad, but it’s still far from good.

Ohio-based power company FirstEnergy Corp plans to buy Pennsylvania's Allegheny Energy Inc in an all-stock deal worth $4.7 billion that would create one of the nation's largest utilities.

The combined company would have a generation capacity of 24,000 megawatts and serve more than 6.1 million customers, the companies said on Thursday.

The International Energy Agency on Thursday revised up by 170,000 barrels a day its forecast for global oil demand for 2010, saying that more robust economic growth projections are partly offset by a higher price assumption and persistently weak OECD oil demand. Global oil demand is estimated at 86.5 million barrels a day in 2010, or 1.8% higher than 2009 levels, the IEA said in its monthly report. This growth in demand will come entirely from emerging, non-OECD economies.

The Dow Jones Industrial Average rose 105.81 points, or 1.1%, to 10,144.19. The S&P 500 Index added 10.34 points, or 1%, to 1,078.47. The Nasdaq Composite Index climbed 29.54 points, or 1.4%, to 2,177.41.

There is a EU meeting of finance ministers next Tuesday and Wednesday. There, they will likely come out with more formal language and elaborate on what type of aid will be forthcoming for Greece.

New Jersey Governor Chris Christie on Thursday declared a "fiscal emergency," allowing him to reserve or freeze state spending as part of his plan to tackle one of the largest 2011 deficits among U.S. states.

The Treasury Department sold $16 billion in 30-year bonds on Thursday at a yield of 4.720%, a little higher than traders expected. Bidders offered to buy 2.36 times the amount of debt being sold, compared to an average of 2.24 times at the last four sales. Indirect bidders, a group of investors that includes foreign central banks, bought 28.5%, compared to an average of 39.8% of the last four sales. Direct bidders, which include domestic money managers, purchased another a record 24.1%, versus 10.4% on average. Treasuries remained lower, under pressure before the auction amid easing anxiety about the European Union's willingness to aid Greece if necessary. Yields on 10-year notes rose 5 basis points to 3.75%.

Wednesday, February 10, 2010

Hyperinflationary Great Depression

2/10/10 Hyperinflationary Great Depression

The U.S. trade deficit widened to $40.2 billion in December, the Commerce Department reported Wednesday. Economists surveyed by MarketWatch were looking for the gap to widen to $37.7 billion. Imports increased $8.4 billion to $189.2 billion, led by higher imports of petroleum, autos, and capital goods. Exports rose $4.6 billion to $142.7 billion, led by higher exports of capital goods and industrial materials. For all of 2009, the deficit shrank to $380.7 billion, $315.3 billion less than the 2008 deficit of $695.9 bilion.

Flight cancellations and delays occurred across the East Coast Wednesday as a second blizzard in a week dropped snow from Washington, D.C., to Long Island, N.Y. Around New York City -- which is expected to get 12 to 18 inches of snow -- many carriers have already canceled flights in anticipation of difficult traveling conditions, The Port Authority of New York and new Jersey said., which tracks airline departures, reported significant delays at the airports for Atlanta, Raleigh, Philadelphia, and Boston.

Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

OPEC expects the world will need more of its crude oil this year than previously forecast, as the organization lowered its outlook for production of natural gas liquids.

China's exports rose 21% in 2009.

Germany along with EU plans to offer Greece, other members loan guarantees.

U.S. weekly oil inventory and demand data and the natural gas storage report for the week ended Feb. 5 will be released on Friday due to the storm-related shutdown of government offices in Washington D.C. this week, the Energy Information Administration said Tuesday.

The Weekly Petroleum Status Report, regularly published at 10:30 a.m. ET Wednesday, will be released at 11 a.m. ET Friday. Earlier, the American Petroleum Institute, a trade group, said it would release its weekly oil inventory data for the same period as scheduled, at 4:30 p.m. ET Tuesday.

The Weekly Natural Gas Storage Report, regularly released at 10:30 a.m. ET Thursday, will be released at 10:30 a.m. ET Friday.

EIA's Short-Term Energy Outlook for February, which had been scheduled for release earlier Tuesday, is scheduled for release around noon on Wednesday.

John Williams: "The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression.

“Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment.

“The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar.”

Apple may pay as little as $219.35 for the tablet's parts, says iSuppli. That leaves room to cut the price of a device that analysts say may be too expensive.

The Federal Reserve may raise the discount rate “before long” as part of the “normalization” of Fed lending, a move that won’t signal any change in the outlook for monetary policy, Chairman Ben S. Bernanke said.

Bernanke repeated the Federal Open Market Committee statement that low rates are warranted “for an extended period” in testimony prepared for the House Financial Services Committee. The Fed may also temporarily replace the federal funds rate as a policy guide with interest it pays on banks’ deposits should fed funds become a “less reliable indicator than usual,” Bernanke said.

One of every five U.S. home owners owed more on their mortgage than their home was worth in the fourth quarter, a trend that poses a serious threat to the U.S. housing market's recovery, real estate website said on Wednesday.

Container lines will have ninefold the amount of shipping capacity operating at "extra-slow" speeds in March compared with June 2009, as they seek to cut fuel costs and absorb idle capacity, according to AXSMarine. So-called extra-slow shipping capacity was 46,000 twenty-foot containers in June 2009 and will be 406,000 next month. China Cosco Holding Co. and Nippon Yusen K.K. are among the companies that have lowered container-ship speeds to improve engine efficiency. A 10% pace reduction can pare fuel consumption by as much as 30%, according to Det Norske Veritas, which assesses seaworthiness of vessels. Slower ships may not be enough to restore "meaningful" profits this year because new vessels are being delivered, said Jay Ryu, an analyst at Mirae Asset Securities Co. in Hong Kong. About 10% of the current container fleet is now idle and another 742 ships are on order, equal to about 35% of existing fleet capacity, according to AXSMarine.

According to a report by Barclays Capital, 73 large U.S. banks have exposure of $82 billion to Ireland, $68 billion to Spain, $18 billion to Greece and $8 billion to Portugal.

Up and down throughout the session, the Dow Jones Industrial Average fell 20.26 points to 10,038.38. The S&P 500 Index declined 2.39 points to 1,068.13, while the Nasdaq Composite Index lost 3 points to 2,147.87.

Tuesday, February 09, 2010


2/9/10 Greece

Same-store U.K. retail sales fell 0.7% in January from the same month last year, while total annual sales growth of 1.2% was the weakest January performance in 15 years, the British Retail Consortium reported Tuesday.

According to Retrevo, which tracks consumer electronics trends, a new study it conducted “indicates a failure to convince any new buyers to consider the iPad. Not only did Apple fail to convince new buyers, it may have lost many potential buyers who now say they don’t think they need an Apple tablet computer.”

ECB's Trichet sparks rumors of an imminent Greece bailout by abruptly leaving a summit in Sydney today, a day earlier than planned. An ECB spokesman says the travel change was purely due to logistics "because there was some concern that he would not catch a connecting flight and therefore miss the EU summit" this Thursday.

Iran says it has begun enriching uranium to a higher level, defying international efforts to curb its nuclear activity. Iranian state media reports the process started at Iran's Natanz facility Tuesday in the presence of International Atomic Energy Agency.

China widened its lead over the U.S. as the world's biggest auto market in January, with passenger car sales more than doubling to 1.32 million vehicles, an industry group reported today.

Iran anniversary 'punch' will stun West: Khamenei "The Iranian nation, with its unity and God's grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned," Khamenei, who is also Iran's commander-in-chief, told a gathering of air force personnel.

The euro may fall toward a 15-month low against the dollar after forming a so-called dead cross, said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. Ltd. in Tokyo.

The European currency’s 50-day moving average, currently at $1.4324, dropped below its 200-day moving average of $1.4351 today, creating a dead-cross pattern. The euro slid 11.9 percent in less than two months after the last such cross occurred, dropping from $1.3998 on Sept. 10, 2008, to $1.2330 on Oct. 28, 2008.

“The dead cross is significant for the euro as it’s a rare development, signaling a long-term bearish trend,” said Soma in a Bloomberg News interview. “The target would likely be the October 2008 low.”

Last summer, our guest Gary Shilling of A. Gary Shilling & Co. predicted that stocks would fall 30%. That hasn't happened yet, but the extraordinary bull run that made idiots out of many of Wall Street's greatest gurus last year has now finally reversed, and Gary is sticking by his bearish guns.

At Dow 10,000, Gary says, stocks are still priced to reflect a strong economic recovery throughout 2010 and 2011. And that's not going to happen. Consumers still account for more than 70% of the spending in the U.S. economy, and consumers are retrenching. The value of their assets has plummeted, so they're finally saving again. They're unemployed. They're tapped out. Put all that together, and consumer spending will continue to be weak, and the overall economy will only grow 2% a year.

When the market finally realizes that its dream of a v-shaped recovery is too optimistic, stocks will go lower--perhaps much lower. In fact, Gary thinks there's a 40%-50% chance they'll crash right through the bear-market lows set last spring.

So what's an investor to do?
Buy Treasury bonds, Gary says. Contrary to the concerns of they hyper-inflation crowd, the world is awash in excess capacity. We have too much production capacity, too many houses, too much labor. Overcapacity leads to deflation, not inflation. So today's 4.5% long-term Treasury yield will go to 3%, making bondholders 25% in the process.

The total number of open jobs in the United States ticked higher in December to a seasonally adjusted 2.50 million, the Labor Department reported Tuesday. Net employment fell by 165,000 in December from November, with hiring falling 1.3% to 4.07 million and separations from jobs declining 0.8% to 4.24 million. The number of workers who quit their jobs voluntarily dropped 0.8% to 1.76 million in December, while layoffs increased 3.4% to 2.08 million. Compared with a year earlier, job openings fell 22.5%, separations declined 14.5%, and hiring fell 9.6%. With unemployment at 15.3 million in December there were 6.1 job openings for every person looking for a job.

U.S. wholesale inventories unexpectedly fell 0.8 percent in December, while sales rose 0.8 percent, pushing the inventory-to-sales ratio down to it lowest level in a 1-1/2 years. The inventories-to-sales ratio, which measures how long it would take to sell stocks at the current sales pace, plummeted to 1.12 months' worth, the leanest since June 2008, the Commerce Department said on Tuesday.

According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”According to Schroders research, the UK policymakers need to be careful in how much attention they pay to bond investor concerns elsewhere. The UK needs to raise around £220 billion ($343 billion) this year and over £550 billion over the next three years, adding that “the task of the Debt Management Office is daunting.”

Crude oil inventories rose 7.195 million barrels in the week ended Feb. 5, the American Petroleum Institute reported late Tuesday. Analysts polled by Platts estimated a 2-million-barrel increase. Gasoline stocks rose 1.552 million barrels, slightly topping a 1-million-barrel gain anticipated by analysts. Distillate stocks fell 1.53 million barrels versus forecasts of a drop of 1.75 million barrels. The refinery utilization rate was 77%, down slightly from 78% in the prior week. Crude oil for March delivery slipped to $73.73 a barrel in electronic trade from its floor settlement of $73.75 a barrel. Oil had ended the floor session 2.5% higher on expectations for a German bailout of Greece.

Up the most since Jan. 4, the Dow Jones Industrial Average rose 150.25 points, or 1.5%, to 10,058.64. The S&P 500 Index climbed 13.78 points, or 1.3%, to 1,070.52. The Nasdaq Composite Index gained 24.82 points, or 1.2%, to 2,150.87.

Monday, February 08, 2010


2/8/10 Weather

Reports say that the snowstorm was the worst to hit Washington since 1922, when the snow collapsed the roof of the Knickerbocker movie theater, killing 98 people.
AccuWeather is reporting that this week, "a new major winter storm ... will threaten the Southern Plains [and] could spread snow to the Great Lakes and Northeast. Most of the eastern two-thirds of the nation will have to endure brutal cold following the storm."

Washington, D.C., airports remained closed early Monday as crews removed a record amount of snow from over the weekend that paralyzed the nation's capital. According to Accuweather, the Blizzard of 2010 dumped some 32.4 inches of snow at Washington-Dulles Airport and 17.8 inches at Reagan National. The snowfall broke many records, and brought the winter's total snowfall in Washington, D.C., to 44.9 inches.

Mike Burk: "The market is extremely oversold, but the January highs were confirmed by most indicators and there has been nothing to suggest the recent decline has been anything but a routine pull back in a bull market.

I expect the major averages to be higher on Friday February 12 than they were on Friday February 5."

John Hussman: "Suffice it to say that I am hopeful for a stabilization of the job market, but that I suspect that last month's dip in the unemployment rate was an anomaly. Given what remains a difficult credit outlook, I suspect that we have observed a lull rather than a reversal, and that we'll most likely see an 11-12% unemployment peak before a sustained downturn is observed."

Calafia Beach: "It is very likely that the budget is seriously over-estimating federal revenues. It is very likely that the budget is seriously underestimating federal spending.

And from these conclusions, it follows that Obama's budget very likely underestimates the federal budget deficit by an order of magnitude."

The Dow Jones Industrial Average fell 103.84 points, or 1%, to 9,908.39. The S&P 500 ) lost 9.45 points, or 0.9%, to 1,056.74. The Nasdaq Composite sank 15.07 points, or 0.7%, to 2,126.05.

ZeroHedge: "Even as China is days away from yet another hike in reserve requirements to control "excess liquidity", the nation is preparing for cold war with the US. An independent survey of Chinese-language media for The Sunday Times has found army and navy officers predicting a military showdown and political leaders calling for China to sell more arms to America’s foes. The trigger for their fury was Obama’s decision to sell $6.4 billion (£4 billion) worth of weapons to Taiwan, the thriving democratic island that has ruled itself since 1949. “We should retaliate with an eye for an eye and sell arms to Iran, North Korea, Syria, Cuba and Venezuela,” declared Liu Menxiong, a member of the Chinese people’s political consultative conference. War pulled America out of the First Great Depression. It is only fitting that war will be the result of the Second one. The only problem is this one won't be won by America."

Jim Ritterbusch, president of the energy-advisory firm Ritterbusch & Associates, wrote in a note to clients on Monday that the forecasted cold spell could bring gas stockpiles down to near last year's levels by the end of the heating season.

The cold weather and its potential impact on storage levels "has been a bullish dynamic" for the market, Ritterbusch wrote.

Gold ends up 1.3% at $1,066.20 an ounce.

More than half of U.S. voters who describe themselves as independents disapprove of President Barack Obama’s job performance for the first time since he took office in January 2009, according to a poll released today.

The Marist Poll found that 57 percent of independent voters don’t approve of Obama’s job performance, up from 44 percent in a Dec. 8 survey. Twenty-nine percent of independents approve, down from 41 percent, and 14 percent said they were unsure.

“If attracting independents and bipartisanship are the aim, then the president clearly has a lot of ground to cover in year two,” said Lee M. Miringoff, the director of Poughkeepsie, New York-based Marist College’s Marist Institute of Public Opinion, in a statement.

$488 million in shares was sold in the past week in 192 documents transactions, while just $8 million was bought in 38 deals. Notable dispositions included Bill Gates selling $85 million worth of MSFT, Roger Pensky dumping over $100 million, and Juniper Chairman Scott Kriens selling $12.5 million worth of JNPR stock. Also, after announcing a major trimming in his GOOG portfolio, Sergey Brin sold some "pocketchange" worth of Google stock worth $7.6 million. Source: FinViz