Rescue of Banks Hints at Nationalization – EDMUND L. ANDREWS – … Instead of investing tens of billions of taxpayer dollars in exchange for preferred shares in the banks, which has been the Treasury Department’s approach so far with its capital infusions, the government essentially liberated the banks from some of their most threatening assets.  The trouble with the new approach, analysts say, is that it is likely to conceal the amount of risk that taxpayers are taking on.  … – New York Times 

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Shipping rates hit zero as trade sinks – By Ambrose Evans-Pritchard – Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October. – Telegraph.co.uk   – thanks M

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on the stupidity of US Treasury Credit Default Swaps – Insuring the Uninsurable – … More important, if the price of the CDS goes up, what does the counterparty put up as collateral?  Typically, you can put up T-bills as collateral.  But T-bills are what’s being insured here. … – To me, this is a terrific paradox.  You want insurance, but there is no way to insure this kind of catastrophe because if the catastrophe happens, the seller of the policy goes down with the rest of the world … Don Fishback’s Market Update

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Lessons From the S&L Bailout – Michael Sisk – It’s inevitable that today’s financial crisis gets compared to the nation’s savings and loan bailout, which cost taxpayers about $250 billion in today’s dollars. Painful as that earlier episode was, those who lived through it say the government’s approach was much more grounded than the shifting sands of the troubled asset relief program (TARP), which has moved from buying troubled assets, to injecting equity, to now some combination of both. – U.S. Banker

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Chart of the Day – For some perspective into the all-important banking sector, today’s chart presents the current trend of the KBW Bank Index. 
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The Oracle of Doom – Robert Langreth – How is Wall Street like the Titanic? The author of The Black Swan has a theory. – Forbes
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major article – Fannie Mae’s Last Stand  -  Bethany McLean -  How its deeply dysfunctional relationships with Congress, the White House, and Wall Street helped propel one of the world’s most successful companies off a cliff. – Vanity Fair

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Stocks: Get Ready for TARP ETFs – Tara Kalwarski  – After Nasdaq’s recent launch of its Government Relief Index, TARP investing products are said to be right around the corner – BusinessWeek 

A New Menace to the Economy: ‘Zombie’ Debtors – Peter Coy – Call them “zombie” companies. Many more has-been companies will be feeding off taxpayers, investors, and workers—sapping the lifeblood of healthier rivals – BusinessWeek 

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From BANKSTOCKS.COM: The serial dilutors in Charlotte finally hit the wall – In Charlotte, the process of serial acquisition (and dilution) finally plays itself. The result isn’t pretty. Vernon Hill explains.

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Grades Housing and Economy in 7 Areas – U.S. Building Market Intelligence, January 2009 – John Burns Real Estate Intelligence

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Chase Steps Up Mod Efforts, Again – By KELLY CURRAN – JP Morgan Chase & Co. announced Friday it has extended its mortgage modification program to include the approximately $1.1 trillion in investor-owned loans it services, “significantly expanding the reach and effectiveness” of its previously enacted efforts, according to the press release. – housingwire