Bloomberg:

• Sovereign Bond Risk Drops the Most on Record Amid Debt-Buyback Speculation. Credit-default swaps on Europe’s deficit-ridden nations are rallying the most on record on speculation policy makers will let governments buy back their bonds at a discount to avoid restructuring their debts. The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 countries fell 15.75 basis points this week to 177.25, following a 26.5 basis point drop in the previous period, according to CMA. That’s the biggest two-week decline since the index was created in October 2009, surpassing the 35.25 basis point drop a month after regulators announced a $1 trillion package to bail out the region’s indebted nations. European leaders are debating proposals including boosting the rescue fund as investors speculate more nations will need bailouts. Allowing “struggling countries” to buy back their bonds using funds from the 440 billion-euro ($597 billion) European Financial Stability Facility to reduce their debts is also being considered, according to UniCredit SpA.
• Financial Crisis Panel to Deliver Three Conclusions. The federal commission that investigated the origins of the financial crisis is set to issue three competing conclusions next week. The Financial Crisis Inquiry Commission’s main report, to be released Jan. 27, is backed only by the panel’s six Democratic appointees. The four Republicans have written two separate dissents, according to a blog post by one of them.
• Corn Jumps to 30-Month High on U.S. Export Demand, Increased Ethanol Use. Corn rose to a 30-month high as U.S. exports surged and the government approved higher targets for using the grain to make ethanol. Soybeans declined. The U.S. Department of Agriculture reported export sales in the week ended Jan. 13 were more than double a week earlier as prices rose. Before today, corn was up 78 percent from a year earlier as U.S. production fell 4.9 percent. The Environmental Protection Agency said today that refiners can add as much as 15 percent of corn-based ethanol in gasoline, up from 10 percent.
• Cotton Surges Near Record as China Growth Fuels Demand Amid Tight Supplies. Cotton jumped to the highest price since reaching a record last month on signs that global output will fail to keep pace with rising demand in China, the world’s biggest buyer. China’s General Administration of Customs said today that the country’s imports jumped by 86 percent in 2010 from a year earlier. Global inventories for the year that began Aug. 1 will be the tightest since the 1995-1996 season, Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia, wrote in a report. The most-active contract has advanced 11 percent this week, the most since the week ended on Dec. 3. Before today, prices more than doubled in the past year.
• UN's Ban to Combat Republican Critics as Funding Questioned. United Nations Secretary-General Ban Ki-moon said he will try to blunt a threat by Republican leaders in the U.S. House of Representatives to withhold financial support for the world body by meeting with them to defend his record. Republican Representative Ileana Ros-Lehtinen of Florida, new head of the House Foreign Affairs Committee, last July called the UN a “stew of corruption, mismanagement and negligence.” Ros-Lehtinen is holding a hearing featuring UN critics on Jan. 25. She plans legislation to increase congressional scrutiny and to make the U.S. financial commitment voluntary, rather than an annual amount stipulated by a formula based on national economic output.
• Goldman to Sell $2.5 Billion of 30-Year Bonds, First Offer in Three Years. Goldman Sachs Group Inc. is marketing $2.5 billion of 30-year debt in its first sale of the bonds in more than three years, as investors accept the lowest premiums since April for bank bonds with similar credit grades.
• Muni-Bond Fund Investors Withdraw a Record $4 Billion on Default Concerns. Investors withdrew about $4 billion from U.S. municipal-bond mutual funds in the week ended Jan. 19, the 10th straight week of outflows and the most since Lipper US Fund Flows started compiling the data in 1992. Outflows have totaled $20.6 billion since the week ended Nov. 17, according to data compiled by Lipper, a Denver-based research company. Forecasts calling for municipal-bond defaults are scaring individual investors, said Justin Hoogendoorn, a managing director at BMO Capital Markets in Chicago.
• Union Membership in Companies Slumps to Record Low 6.9% in 2010. Union membership in U.S. companies slumped to a record low last year as the recession eroded employment in industries where organized labor represents the workforce, the Labor Department reported. Labor unions represented 6.9 percent of employees in companies last year, down from 7.2 percent in 2009, according to data released today. Total union membership, including public employees, fell to 11.9 percent of the workforce from 12.3 percent in 2009, the agency reported. Unions represented 36.2 percent of workers in public-sector jobs. Union representation has declined since 1983, the first year the agency collected the data, when 20.1 percent of the U.S. workforce and 16.8 percent of company workers were organized.

Wall Street Journal:

• U.S. Nears Deal for Russian Copters. The U.S. military plans to award an exclusive contract to Russia's state arms exporter Rosoboronexport to supply helicopters for Afghanistan's military, speeding a deal that was outlined as part of a "reset" of U.S.-Russia relations.
• China's ICBC Bids for U.S. Entry. Industrial & Commercial Bank of China Ltd. on Friday signed an agreement here to acquire a majority stake in Bank of East Asia Ltd.'s U.S. subsidiary, becoming the first state-owned Chinese bank to make an acquisition of a U.S. deposit-taking institution.
• Hospira to Stop Making Lethal-Injection Drug. The sole U.S. maker of a key execution drug has decided to permanently halt production of the drug, which could lead many states to face delay in carrying out the death penalty.

Bloomberg Businessweek:

• Eat-What-You-Kill Brokers Starved After Bank Bailout. Bond-trading boutiques are being squeezed out of the market as Wall Street’s biggest banks recover from the financial crisis that caused almost $2 trillion in losses worldwide.

CNBC:

• Gartman: Rally in Euro To Be Short Lived.
• Beware the Shadow Office Space.
  

MarketWatch:

• Jones(JNY) Weighs on Apparel Stocks. Apparel stocks traded lower Friday after Jones Group Inc. gave a disappointing fourth-quarter forecast, citing promotional and cost pressures. Shares of Jones fell 11% after the maker of Nine West shoes and Jones New York apparel said late Thursday that it expects fourth-quarter profit of 3 cents a share. On average, analysts surveyed by Thomson Reuters were looking for a profit of 11 cents a share. “We fear that the worst could be yet to come,” said Credit Suisse analyst Omar Saad. “Despite management’s assurance that inventory positions are healthier, we think mid- to high-single-digit cost inflation (or worse) could drive another leg of margin degradation.”

Business Insider:

• Top GOP Senator Endorses A "Game-Changer" in the Debt Ceiling Debate. So it seems the GOP is eager to see the debt ceiling held steady, while also acknowledging the fact that a default would be a disaster. Now some GOP Senators are pushing a new idea, which is a law that would allow the Treasury to prioritize interest payments on the debt, while still not borrowing any more beyond the limit, with the obvious constraining effect on spending. According to The Hill, top GOP Senator Jim Demint enthusiastically endorsed this WSJ op-ed by Senator Pat Toomey.
• David Einhorn's Latest Letter Is A Magnificent Slam Piece on Ben Bernanke.
• This is What Happens to Your Stock When Your CEO Becomes a Top Advisor to the President. Yes, the strong earnings helped, but really, when you have to figure than when your company's CEO gets the top spot to be the President's "job-creation" advisors, you're going to see a lot of policies perfectly suited to what helps your company.
• The Best Goldman Jokes of All Time.
• These Two Countries Will Be Hit The Hardest in an Emerging Market Slowdown.
• The Mayor of Shanghai Warns His City May Not Have a Future.
  
  Unless the real estate bubble is resolved, Shanghai may not have a future says its mayor.
  

Zero Hedge:

• A Brief Tally of Immelt's Catastrophic Job Creation Skills. Dow Jones (link) has created a brief compilation of Immelt's simply tragic job creation track record: [Immelt] runs a big company, but Immelt has shown more skill at cutting jobs, frankly, than creating. GE finished 2009 with 18,000 fewer US workers than it had at the end of 2008, and US headcount is down 31,000 since Immelt's first full year in 2002. During his tenure, GE workers based in the US as a percentage of total employees has fallen to 44% from 52%.
• SHIBOR: We Have a BIG Liquidity Problem(graph). When two weeks ago we first pointed out the surging Chinese weekly SHIBOR (following up on comparable observations from last summer) it prompted a variety of bemused responses, the bulk of which were of the now traditional "this is irrelevant" variety. Too bad. Today, the 7 day SHIBOR (and repo rate) has just surged to new multi-year highs and has literally exploded from 2.5% to 7.3% in a few short days.
• China's Runaway Chariot. China's authorities may have lost the ability to control the increasingly complex and opaque Chinese economy. China's economy appears to have reached a critical threshold of complexity and obscurity that renders it uncontrollable. Recent reports of surging bank loans, real estate speculation, industrial growth and inflation triggered a sharp decline in the Shanghai stock index yesterday.
  

iMarketNews.com:

• Fitch: EMU Sovereign Ratings Seen Remaining Under Pressure. Euro zone sovereign ratings will continue to face pressures until their fiscal policies and economic recoveries become sustainable, Fitch Ratings said Friday. At a conference here on the European Credit Outlook, David Riley, Fitch's Head of Global Sovereign Ratings, said "2011 will be a crucial year as governments pursue fiscal austerity and, at the European level, the new policy framework and rules of the game are defined for governments and investors." "The crisis is systemic in that it reflects concerns about the Euro and Euro area governance, as well as peripheral country vulnerabilities, and it will require a European wide as well as national level policy response," Riley added. "We see the downgrade triggers for Spain in 2011 as being larger than expected bank recapitalisation costs costs, a slippage against fiscal targets also a weaker than forecast recovery," he said. "The downgrade triggers for Portugal would be a failure to meet its fiscal targets, an absence of a sustained re-balancing or loss of market access," he added. Even the big European triple A's could be at risk in the event of a double-dip recession or a rapid rise in interest rates. "A double-dip recession in the UK, Germany or France or rapidly rising interest rates would negatively affect the agency's outlook for these countries." "We do expect to see a couple more periods of extreme market volatility, similar to that seen before Ireland agreed to the EU/IMF package." Fitch also called on Spain to issue a credible plan for the restructuring of its troubled caja sector: "Most small banks and cajas will still have very limited access to wholesale funding and remain reliant on the ECB unless there is a deeper restructuring of the caja sector".

Examiner:

• GE Got $24.9 Million in Stimulus, But Axed Thousands of Jobs(10/13/2010).
  
  Not only did GE's receipt of stimulus funds not save the local jobs, from the end of 2008 to the end of 2009 GE eliminated 18,000 jobs.
  

The Detroit News:

• EPA to Approve Use of E15 in 2001-06 Model Vehicles. The Environmental Protection Agency will announce today that it is approving a higher blend of ethanol known as E15 for use in tens of millions of older vehicles. The EPA has decided to approve the use of the fuel for 2001 to 2006 model years, a person briefed on the matter said late Thursday.

World Steel Assoc.:

• World Crude Steel Output Increases by 15% in 2010.

Reuters:

• Falcone's Flagship Hedge Fund Sees More Red. Philip Falcone's flagship hedge fund started 2011 right where it ended 2010 -- in the red. Additionally, Falcone, who rocketed to fame on a bet against the housing market, stopped reporting his Harbinger Capital Partners funds' returns to HSBC's Private Bank late last year. HSBC tracks hundreds of hedge funds' monthly returns and its periodic reports are closely monitored for trends in the secretive $1.9 trillion hedge fund industry. According to several of Falcone's investors, the Harbinger Capital Partners fund ended 2010 down about 12 percent and is off roughly 1.2 percent through the middle of January.
• For-Profit Schools Sue to Stop New Rules. A group of for-profit schools on Friday filed a lawsuit against the federal government on Friday to stop implementation of three costly new rules.
• U.S. Economy Growth Gauge Hits 36-Week High - ECRI.
  

Manila Bulletin:

• Slowdown in Asian Exports Seen to Damp Commodity Shipping. Asian exports that helped power the world recovery last year are poised to grow more slowly as the region’s manufacturing rebound eases and US unemployment restrains consumption after a post-recession spending spree. Container traffic growth in Shanghai, Singapore and Hong Kong, the world’s busiest ports, has cooled since the first half of 2010. Singapore exports in 2011 may rise at a third of last year’s pace of as much as 24 percent, according to DBS Group Holdings Ltd. The island’s government joins Taiwan and South Korea in predicting smaller gains in overseas sales. “2011 is not looking as exuberant as 2010,” said Vishnu Varathan, an economist at Capital Economics (Asia) Pte in Singapore. “The easy part of the trade upswing is over now and demand is getting tighter,” making the outlook for shipping “less bubbly,” he said.