James Chanos, founder of Kynikos Associates Ltd.

Hedge fund manager James Chanos sees a collapse in the Chinese real estate market within the next two years.

Bloomberg Article

Fannie Mae suffered losses due to “unemployment and continued defaults from many borrowers who owe more on their mortgages than their homes are worth.”

Source: WSJ

The government has agreed to absorb unlimited losses for the next three years and up to $400 billion after that for Fannie Mae and Freddie Mac.

The Consumer Price Index rose 0.2 percent in January, while Core Inflation unexpectedly fell for the first time since 1982.

WSJ
Gaurdian

CPI rose 0.2% in January from the previous month on the back of higher energy prices -WSJ

According to Seeking Alpha’s “inflation trader,” the Fed’s decision to raise the discount rate will have little effect on inflation.

Here is the effect of hyperinflation…

The outcome of ineffective monetary policy

Read the full article.

EU Leaders have pledged to provide financial support to Greece at a summit on Thursday.

(L-R) European Central Bank (ECB) President Jean-Claude Trichet , European Commission President Jose Manuel Barroso, Germany's Chancellor Angela Merkel, Greece's Prime Minister George Papandreou, France's President Nicolas Sarkozy and European Council President Herman Van Rompuy

This morning, Federal Reserve Chairman Ben Bernanke released a statement outlining the fed’s plan to tighten credit by selling off treasuries and other fixed income securities.

Bernanke plans to start "testing" these programs in the spring of 2010

Kenneth Lewis, the former Bank of America CEO has been sued by New York Attorney General Andrew Cuomo for Securities Fraud.

Full Article

Former Bank of America CEO Kenneth Lewis

Receipts and Outlays (click to enlarge)

Source: Wall Street Journal

This data sheet should be a great resource for those taking the finance junior core or for those who want to refresh their understanding of financial ratios.

Click the logo to access the data sheet

Earlier this morning, the U.S. Commerce Department reported that the U.S Gross Domestic Product grew at a rate of 5.7% in the fall of 2009.

Opinion article on the GDP results from The Economist

Writers from The Economist remain skeptical of the newly released GDP numbers

Allan Meltzer, a professor at the Tepper School of Business describes in this WSJ article why he believes the Fed will not be able to stave off both inflation and unemployment.

The Federal Reserve Board Building

A report by the U.S. Census Bureau released this morning showed an unexpected drop in demand for new homes last month.

The Full Report: http://www.census.gov/const/newressales.pdf

“Congressional experts pegged the 2010 U.S. budget deficit at $1.35 trillion, a slight improvement from the $1.38 trillion estimate in August, but the overall picture of the government’s finances remains bleak, according to the annual report released Tuesday.”

Source: http://online.wsj.com/article/SB10001424052748703906204575026942464525862.html?mod=WSJ_hpp_LEADNewsCollection

For those looking for more detail (and who have lots of time on their hands,) you can find the Congressional Budget Office’s 179 page report at:

http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf

For those interested in proprietary trading or private equity, the following article regarding the newly proposed “Volcker Rule” should be of interest. If enacted, it will limit proprietary trading and other forms of risk-taking by bank holding companies.

Here’s the link to the Washington Post article:

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012104935.html