5th week summarize

* For the past week SP500 lost 1.6%, Nasdaq - minus 2.6% and DJ shrink 1%. Meanwhile, VIX in the same period plunged 10%. Since 19th january 09' SPX year high (1150.45) and friday closing price (1073.87) the leading US index contracted 6.66%

* China at the brink to enter bear market territory. SSE index is exactly at 200 day exponential and simple moving averages

* Dollar index strongly broken out above 200 day exponential and simple moving averages. It is now in a bull shape where it wasnt since march 09'

* Q4 US GDP posted 5.7% surge, far above market consensus of 4.7% growth. At the background of the best rate is six years on 27th january on Capitol Hill Obama have warned, that "starting in 2011, we are prepared to freeze government spending for three years". As Paul Krugman have pointed out, by doing this US will repeat the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over. Spending was cut back, monetary policy was tightened and the economy promptly plunged back into the depths

* Lawrence Summers, director of the White House's National Economic Council, Obama's top economic adviser, said United States and some other economies are experiencing an economic recovery on paper, but a "human recession" because of job losses

* The Senate Banking Committee have revealed that hearing from former Federal Reserve Chairman Paul Volcker about the White House’s recent proposal to limit the size and risk of big U.S. banks is already expected on tuesday 2nd february

* OECD oil demand level of 2006, 2007 will never be seen again, because of more fuel efficiency and the use of alternatives, the chief economist of the EIA, Fatih Birol, said

* S&P said that UK is no longer classified as being among the most stable and low-risk banking systems globally

4th week summarize

* After posting fresh year highs at the beginning of the holiday week, for the past 4 days DJ lost 4.12%, SP500 fell some 3.8% - the worst results since march 09'. In the same period VIX doubled to 27.3

* The most hard hit sectors for the week were: materials - minus 6.3% and financials - 5.1%. The strongest was consumer staples with health care that lost 1.8% both

* So far 78% 4q results beat expectation, but WhisperNumber.com analysts say the main stocks slump factor is missing the "whisper number", a metric that is similar but considerably tougher to beat

* China's officials made sign to cut probability of asset bubble by credit lines limits

* Deutsche Bank told clients the odds high China will likely hike interest rates already in the second half of march

* Meredith Whitney said Obama proposal, officially called "the Volker rule", to limit banks size and prevent them to profit on their hedge funds (prop trading), will go through and will reduce liquidity in corporate and consumer market

* Pimco's CEO Mohamed El-Erian said the proposal is going to intensify in other counties

* Barney Frank, chairman of the House Financial Services Committee, said he would support bank rule changes, but only over a longer time frame, near three to five years.

* Economics of Contempt think Obama proposal is political stunt that is going to quietly die in committee

* CreditSights analysts reported Goldman's true prop trading exposure is even near 30-40% of total revenue.

* Goldman's CFO David Viniar said the bank don't have prop trading and everything they do is ultimately for the benefit of their clients

* Bernanke can face more opposition while approving his 2nd term than any Fed chairman in recent history - CNBC survey shows only 67% senators likely vote in Bernanke favor

* Bespoke survey shows that 42% of traders and investors as the most contributed factor to recent stocks slump have named overbought market conditions. 38% blame on Washington and only 9% on China

* Corey Rosenbloom, founder and CEO AfraidToTrade.com, pointed out that current SP500 near 3.8% slump is not so sever. Since march 09' index have posted four pullbacks on average of 6.4%