Need To Know News

Outstanding US commercial paper rose $10bln in the week ended Jan. 30, vs. a $1.6bln fall the previous week. Asset-backed CP fell $1.1bln after a $8.2bln rise the previous week.

Outstanding US CP totals $1.857trln, according to the Fed. ABCP stands at $812.1bln.

The Conference Board Helped Wanted Index grew 1 point to 22 after a reading of 33 last year. In the last 3 months help wanted ads declined in 8 of 9 US regions with the steepest declines in the Pacific and South Atlantic.

Fewer job prospects have lead to nervous consumer attitudes and spending patterns, and reduced business spending has made employers less willing to offer higher paid positions, according to Conference Board labor economist Ken Goldstein.

Goldstein says there are “pockets of the nation in recession”– New York, Michigan, Indiana, New Jersey — but did not forecast a national recession unless labor market weakness spreads further, into the broader economy. Goldstein believes the data through December do not suggest a recession.

The Chicago Purchasing Managers Index came in at 51.5 in January, slightly lower than the 52 expected. It followed a downwardly revised 56.4 level in December.

The New Orders index was 44.7, the lowest level since April 2003 and vs. a 56.7 reading last month.

The Employment index was 47 after registering 49.3 in December, and the Prices Paid index was 81.7, up from 67.4 last month.

The Houston Pilots Association has closed the Houston Shipping Channel, a major supply link for the petroleum industry, due to heavy fog. It was closed at 6:45am this morning.

Shaken at the Core: MBIA Rattled By $18.16/Share Loss, Warburg Steps in With $500mln WSJ

Isn’t Anything Enough? FOMC Delivers 2nd Aggressive Cut, Markets Already Expect Another 25bps in March WSJ, FT, NYT

Fed Gradualism is Dead: 125bps in 8 Days Signals New, Incremental Approach FT

Sweeping Bail-Out Isn’t Possible for Monoliners –Merrill’s Thain FT

Doomsday-Forecaster Ackman Tries to Make Own Bets Come True NYT

Senate Committee Tees Up Stimulus Showdown In Passing Its Own Package WP, FT

New Buying Class — The Mainstream — Drives Gold To Another High on Inflation, Recession Fears WSJ

S&P Puts Hurt on 8k More Mortgage Investments, Predicts $265bln in Further Subprime Write-Downs WSJ

Banks’ Failure to Write Down Is Blocking Buyouts; Institutional Loan Market Still “Frozen” WP

First the US, Then Europe … Now Japanese Banks are Feeling Subprime Heat, Too WSJ

Dems May Block Re-Nomination of “Lightning Rod” Kroszner; Dodd on the Offensive WSJ

Edwards, Giuliani Bow Out, Narrowing Horse Race to 4 WSJ, FT

Personal income rose 0.5% in December, slightly more than analysts expected. Personal spending rose 0.2%, also slightly ahead of expectations. However, once inflation was accounted for, personal spending was unchanged in December following a 0.4% increase in November. Real expenditures for durable and nondurable goods fell during the month and expenditures on services rose a modest 0.1%. Disposable personal income, after inflation adjustment, rose 0.2% after two months of declines.

Headline PCE inflation increased 0.2% in December, substantially below the 0.6% rise seen in November. Prices for durable goods declined, offsetting increases for nondurable goods and services. For the third month in a row the core PCE price index (excluding food and energy prices) rose 0.2%. Compared with last December, the core PCE index is up 2.2%, matching last month’s increase and above the Fed’s comfort zone. Overall the PCE price index rose 3.5% since last December.

For the year 2007 total personal disposable income rose 5.8% compared with a 5.5% increase in personal consumption expenditures. Personal savings rose for the first time since 2004. After adjustment for inflation real disposable income rose 3.1% in 2007, matching its gain in 2006. For the year personal spending rose 2.9%, its smallest increase since 2003.

The Employment Cost Index’s Total Civilain Compensation for Q4 2007 increased 0.8%, in line with expectations and indentical to Q3’s 0.8% increase.

Total Civilian Compensation Y-o-Y grew 3.3%, which was consistent with the 3.3% reported in Q4 2006. Civilian Wages increased 0.8% Q-o-Q and 3.4% Y-o-Y. Benefit costs for Civilians increased 0.9% Q-o-Q, a slight acceleration from Q3’s 0.8%. However, the Y-o-Y change in Benefit costs slowed to 3.1% from 3.6% in Q3.