Glass half full reads the story that the IMF wants to increase its resources to $1T from the current $385b in an attempt to help ease the European debt crisis and glass half empty reads the IMF belief that there is a $2T funding gap over the next two years as extremely worrisome. On top of the $385b the IMF has, the EU has pledged an additional $185b (UK is holding out right now) and the IMF hopes that China, Brazil, Russia, India, Japan and those rich oil guys in the Mideast will stump up more cash to help. Portugal, the area everyone is now staring at again after Greece completes its default negotiations, sold the maximum of short term bills they hoped to at yields about 50 bps below those sold in Nov. Portuguese yields 5 yrs and further out are all at multi yr highs. Encouragingly, Spanish and Italian yields are lower again. Fitch said they will likely follow S&P with downgrades of some European countries by months end. UK’s unemployment rate rose to 8.4%, the highest since 1996 although the amount of people filing jobless claims rose less than expected in Dec.
In the US, the MBA said refi apps rose 26.4% to the most since Nov ’10 as the avg 30 yr mortgage rate falls to a new low of 4.06%. Purchase apps rose 10.3%. With respect to US corporate Q4 earnings reports, a very mixed bag continues to be the theme. II: Bulls 50 v 51.1 Bears 29.8, unch.