Good morning.

Look for the market to open on the down side again this morning. The futures are down fractionally the Nikkei was down over night but the Hang Seng was up.

The new GDP numbers will be out today and the expectation is to see the GDP shrank by about 5% in the 4th quarter.

The market gave back all of it’s previous gains yesterday for several reasons:

1. profit taking by the swing traders.
2. continued bad employment and profit numbers
3. The “Bad Bank” option, so well thought of on the Street, seems to be running into some snags. The new administration is actually in long talks with certain high level Wall Street executives. Work of the progress, or lack of progress is leaking out. So, the high hopes of a workable solution to the toxic security solution on Wednesday got dashed on Thursday.

The problem boils down to this. When similar securities were sold this past fall, they went for about 22 cents on the dollar. The economy has deteriorated since then, so on a mark to market basis you could say these securities are worth about 20 cents on the dollar.

If the Gov’t sets up the “Bad Bank and buys the toxic assets at that price, your banks still go broke cause of the huge write downs over what they bought the securities for.

If on the other hand, the gov’t buys the securities at 50 or 60 cents on the dollar (probably much closer to the long term value os these things), it helps the banks to survive but the gov’t will need to come up with about 2 trillion to do this.

Maybe the Messiah can just waive his magic wand and make it all OK.