Ignorant and piggish bank derivative investment executives deserve being fired not rewarded.

The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities and the special favors to financial firms that might have collapsed without the largest government bailout in U.S. history. Likewise they do not want Americans to know how the administration blackballed BOA with regard to their resistance to the FED forced Merrill merger.

Bernacki's approval is now on hold by four Senators, and Geithner is seen as an arrogant dishonest fool on capital hill. But unemployment continues to rise as the favored administration banking criminals take bonuses instead of jail sentences for selling worthless derivatives to trusting investors. Ignorance of what they were selling is no excuse and certainly nothing to be rewarded with a bonus.

Alcoa Inc., the largest U.S. aluminum producer, reported fourth-quarter loss that topped analysts’ estimates by a factor of six. The net loss of $277 million, or 28 cents a share however narrowed from the loss of $1.19 billion, or $1.49, a year earlier before major layoffs. Sales fell another 4.5 percent in 2009 to $5.43 billion. Higher energy prices and the dollar's decline hurt profits. John Stephenson, who helps manage at First Asset Investment Management said, “This quarter was disappointing, especially with the energy costs, and having to buy primary aluminum on the open market,” The miss on earnings was “significant,” he said.

Electronic Arts Inc., the world’s second-largest video-game publisher, reported preliminary third- quarter earnings and revenue that fell short of analysts’ estimates after poor holiday sales.

World Outlook
China's exports increased for the first time in over a year. European share indices shed 1.2 percent by their midday as commodity issues and banks dropped sharply on news China has raised its banks' reserve requirements, in a tighter monetary policy. Mines led the blue chip retreat as metal prices fell further following the move by China, with the sector already under pressure after disappointing fourth-quarter results overnight from U.S. Alcoa


Market Week News:

Treasury bill auctions show rising rates. Yield on the benchmark 91-day paper, the rate used as reference by banks for their short-term loans, rose to 3.914 percent from 3.887 percent in the December auction. The 182-day bill rose to 4.129 percent from 4.095 percent and the 364-day paper increased to 4.582 percent from 4.562 percent. Excess liquidity in the financial system capped the rise despite forecast of increasing inflation and a wider budget deficit. Total tenders for the 8.5 billion offering, which was awarded in full, reached 23.39 billion.

Confidence among small businesses declined in December to the lowest level in five months as the outlook for sales remained dim, according to the National Federation of Independent Business optimism index. It declined to 88 in December from 88.3 in November.

Tuesday, Jan. 12:
U.S. Trade deficit

Wednesday, Jan. 13:
FED's Beige book outlook

Thursday, Jan. 14:
Continuing claims
Unemployment initial claims
December Retail Sales

Friday, Jan. 15:
Consumer Price Index
NY Manufacturing Index
Industrial Production
Consumer Sentiment


Market forces January 12, 2010

The US market continues relatively flat for six weeks while Asian markets have declined since August.
Trim Tabs Research, a firm that keeps track of liquidity flows into and out of the market implies the government has been investing in American stocks and artificially caused the recent rally to create the illusion of a recovery. Biderman said, “We cannot identify the source of new money that pushed stock prices up so far so fast." He says the money didn’t come from companies, retail investors, foreign investors, hedge funds, or pension funds. It is similar to when Alan Greenspan flooded the market in 1986 to stop the October stock panic. The more government props up unhealthy institutions with clearly ignorant and piggish bank derivative investment executives the greater the moral hazard grows.

Asian markets were mixed over night; Shanghai up 1.9%, Hong Kong down -0.4%, India down -0.6%, and Japan up 0.8%.

European markets are down sharply with the average in a range from -1% to -1.5% this morning about half way through their day.

US pre-market futures down about 0.6% today at 8:00 AM EST.