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.

The Dollar continued to gain strength today as the Fed announced that it would raise the discount rate (not to be confused with the Federal Funds Rate) from 0.5 percent to 0.75 percent.

Sources:

Business Week

MarketWatch

Federal Reserve Site (official release)

BB&T’s Opinion

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

Oliver Stone’s new film Wall Street: Money Never Sleeps will be based off of characters from the original 1987 film; It is scheduled for release in Spring 2010 and will feature actors Shia LaBeouf and Michael Douglas.

Wall Street's Sequel will be set in 2008 during the financial crisis.

WASHINGTON (CNNMoney.com) — The fate of President Obama’s latest proposal to rein in banks was thrown into doubt on Tuesday after it got a chilly reception from key lawmakers.

Paul Volcker, former chairman of the Federal Reserve

Receipts and Outlays (click to enlarge)

Source: Wall Street Journal

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

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