Probable amount of toxic assets revised to some 2000 bn USD

·         Too early to make any bet: DJ -1.0%, S&P500 -1.0%, NASDAQ -0.5%, NIKKEI -0.4% and EUROSTOXX +0.6% and down by 0.6% right now.

·         JAPAN: the Japanese economy fell off a cliff by nearly 13% in Q4 on an annual basis, due to plummeting investments and exports. This figure is even worse than anticipated. The Nikkei barely reacted to the news. This index lost some 13% YTD and is now its lowest point in 26 years.

·         The confidence index by the University of Michigan dropped much more than expected at 56.2 against 60 forecast and 61.2 previously.

·         BANKING SECTOR: British banks (LLOYDS, RBS) still under heavy pressure as HBOS is about to announce a major loss of some 14 bn USD. The IMF has revised the probable amount of toxic assets within the financial sector worldwide at some 2000 bn USD.

·         VIX is up slightly at 43. Gold is having a break in its rising phase at 941 USD per oz while oil is weak at 43.8 USD. The USD is weakening against the EUR at 1.276. 10-2 years spread is virtually unchanged at 1.43. The 5y CMS stands at 2.836 and the 3y at 2.376.

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