• ECB’s Gonzalez-Paramo sees risks of solvency problems in Europe/elsewhere due to fiscal spending.
• Canadian retail sales for December -5.4% m/m. Worse than expected.
• BOC’s Jenkins says 2009 will be difficult year for Canada. BOC sees growth dropping real 1.2% in 2009, rebouding 3.8% in 2010.
• ECB’s Nowotny sees Eastern Europe’s bank problems as manageable, but must change business models.
• Spain’s Solbes says bank nationalisation not considered in Spain.
• Canadian P.M Harper “hugely worried” about financial systems of US and other countries.
• EU’s Almunia says ECB comments make him think rate cut would not be a surprise at next meet.
• Fed’s Lockhart says rising defaults on commercial real estate is main domestic risk which “keeps him up at night.”
• White House’s Orszag says U.S. budget on unsustainable path.
• Obama says U.S. risks sinking into another crisis if debt not addressed. Pledges to half U.S. deficit in 4 years.
• AIG, U.S. government talking about additional funds, trading debt for equity, among other options.
• Risk appetite, which was so evident at the start of play, just slowly ebbed away throughout the session to be replaced by risk aversion. The move accelerated into the close in line with accelerating losses for US stocks. Whereever you look there are concerns. You only have to look at some of the headlines above.