rather than pick out individual stocks to trade, it can often be worthwhile to trade the indices themselves, especially in times of high volatility.

for those so inclined, i attach below charts for FTSE and FTSE 250, though one might equally be tempted to trade Dow or S&P, which is significantly broader in its coverage, or even NASDAQ

for ease of reading, i have attached 1 year and 3 month charts in each instance

i do hope osborne does not throw yet more billions in to that dratted eu fund which itself has been downgraded a notch by s&p!

Will CDS Tackle the European Financial System?
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The European sovereign debt crisis has been festering for nearly three years, and some observers wonder whether the credit default swaps (CDS) that have been written on the government of Greece, Ireland, Italy, Portugal and Spain represent another source of risk for the world's financial institutions.

Stock futures rise after China data, earnings eyed
Stock Futures Higher After China Data, Earnings on Tap
Stock index futures signal strong gains......

A credit default swap is a financial instrument in which the buyer of the instrument makes a series of payments, called "the spread," to the seller for a specified period of time, which is known as the maturity of the instrument. In return, the seller will make compensation to the buyer in specified amount, called the notional amount, if there is a "credit event" (i.e., a default).

Greece, Ireland, Italy, Portugal and Spain have been at the forefront of the European sovereign debt crisis that has been festering for nearly three years.

Wells Fargo economists say the notional value of the CDS contracts that have been written on government bonds of those five countries totals an eye-popping €500 billion though net CDS exposure is much more manageable at €40 billion.

However, CDS exposure, whether measured on a net or even on a gross basis, is small compared to the outstanding government debt of five countries that totals €3.3 trillion.

"In our view, observers should not focus on CDS in isolation. Rather, their attention should be riveted to the solvency of those European governments. After all, a "credit event," which would trigger the CDS contracts, would not occur unless a European government defaulted," economist Jay Bryson wrote in a note to clients.

Observers should be especially concerned about the potential risk to the European financial system posed by the €2 trillion worth of outstanding Italian government debt. A restructuring of Italian government debt, should it occur, would cause European banks to take capital charges that would total hundreds of billions of euros.

In September 2008, American International Group Inc (AIG) was brought down by the CDS it had written against collateralized debt obligations (CDOs) that were backed by sub-prime mortgages. However, ultimately it was the inability of subprime borrowers to service their mortgages, not the CDS contracts per se, that doomed AIG.

In that regard, there is some uncertainty regarding the applicability of the CDS contracts to a debt restructuring. In the case of Greek government debt, the International Swaps and Derivatives Association (ISDA) has announced that the restructuring proposed in October may not qualify as a "credit event" if it is "voluntary." In the event of a "voluntary" restructuring, CDS contracts would not be triggered. However, negotiations about the restructuring of Greek government debt are ongoing, and no final determination has yet been made regarding a "credit event."

"The bottom line is that we do not lie awake at night worrying about the implications for the European financial system of CDS written on European sovereign debt. The nightmare of potential debt restructuring, especially for Italy, is bad enough to prevent a restful night's sleep," added Bryson

UK unemployment increases to 2.685m

UK unemployment rose by 118,000 in the three months to November to 2.685 million, official figures show.

The unemployment rate also rose to 8.4% from 8.3%, the highest rate since January 1996.

The number of people claiming Jobseeker's Allowance in December rose by 1,200 to 1.6 million.

That was lower than expected and came from a lower base than had been thought. November's claimant count was revised down to a rise of 200.

The number of young people without a job rose to 1.043 million in the three months to November, taking the unemployment rate in the 16-24 year-old age group to 22.3%.

The number of people in employment rose slightly in the three months to November to 29.119 million.

This Government couldn't care less about unemployment figures as they "hope" that if their declared next General election date is in 2015. Then the numbers will be coming down.. so it's just the usual political positioning in these preseeding years.

ZEW/Credit Suisse Economic Expectations -50.1 previous -72

PPI m/m -0.1% v consensus 0.1% previous 0.3%

Core PPI m/m 0.3% v consensus 0.1% previous 0.1%

TIC (Net Foreign Purchases of Long-Term Securities;) 59.8B v consensus 27.3B previous 4.8B.

greece going default, recession.. market is not pricing that yet and is tired too so shorted ftse 5700

Are we in a recession yet?

been in recession for years in reality, never out of it - because basically effectively everyone has been living on borrowed monies for ages which masked the reality, analyst have known this for years as have governments - now the credit lines are closing reality is finally hitting home - no avoiding it - i was wondering how long it would take for that to happen longer than i expected but hey ho

even china with its trillions stashed away will be affected in time

have a good evening all

shorting ftse at 5700 is quite brave as if there is a break above 5709 you may get quickly singed

ECB current account -1.8B v consensus 0.5B previous -7.5B

I guess the out flow from safe havens (SSE,NG,SVT) etc is flowing into the banks etc ?

FTSE currently holding above the much talked about 5,709.

.

Greece, creditors make little progress as clock ticks

News Patience needed on Greek reforms - EU task force head
9:16am GMT
Number of Germans opposed to Greek aid falls - poll
10:47am GMTRelated TopicsBusiness »
LONDON/ATHENS | Thu Jan 19, 2012 11:47am GMT

LONDON/ATHENS (Reuters) - Greece and its bondholders have made little progress since resuming stalled talks on a debt swap, three sources close to the talks told Reuters on Thursday, with time to strike a deal and avoid a messy default running out rapidly.

Nearly a week after talks hit an impasse, the two sides remain bogged down over the coupon, or interest payment, that Greece must offer on its new bonds under the swap.

A senior Greek official also played down speculation that terms of a deal had been nearly pinned down, saying: "Nothing has been concluded yet."

Negotiations between Prime Minister Lucas Papademos and Charles Dallara, head of the International Institute of Finance representing private bond holders, on the gamut of issues are due to resume in Athens on Thursday evening.

The stakes could not be higher. The two sides must thrash out a deal within days to pave the way for Greece to receive a new infusion of aid and avoid bankruptcy when 14.5 billion euros (11.3 billion pounds) of bond redemptions fall due in March.

Even if a deal is struck rapidly, the paperwork will take weeks and Greece's official lenders -- the European Union and the International Monetary Fund -- say the work must be cleared before funds are doled out from a 130 billion euro rescue plan they drew up in October.

Turning up the pressure ahead of Thursday's talks, Finance Minister Evangelos Venizelos told lawmakers that a large chunk of the bond swap must be agreed by noon on Friday and formalised before Monday's meeting of euro zone finance ministers.

Kept afloat by bailout loans, Greece faces the threat of having to leave the euro zone and slumping into further economic and social misery if it fails to come to grips with its debt, including securing a deal with the private bond holders.

"Now is the crucial moment in the final battle for the debt swap and the crucial moment in the final and definitive battle for the new bailout," Venizelos told parliament. "Now, now! Now is the time to negotiate for the sake of the country."

NO MIRACLES

The swap is aimed at cutting 100 billion euros off Greece's over 350 billion euro debt load by getting the private holders of Greek bonds to accept a 50 percent writedown on their notional value.

But terms of the swap -- including the interest rate and maturity date of new bonds Greece would sell to the private creditors in place of old debt -- have been up for negotiation.

The talks ran into trouble last week over Greek demands for an interest rate below the 4 percent that banks were willing to stomach and a plan to enforce losses on investors.

A lower interest rate would push the actual loss investors take to well above the 50 percent level initially envisaged.

A 3.5 percent coupon demanded by Greece and its lenders, for example, would imply a roughly 70 percent net present value loss for investors, according to the Reuters Breakingviews calculator.

Greece is stumbling through its worst post-World War Two crisis, with unemployment at record highs and near-daily protests, strikes and work stoppages against austerity measures that have deepened an already brutal recession.

Nearly one out of two youth is unemployed and anger against wave after wave of tax hikes and pay cuts is running high.

Its latest bailout -- drawn up on condition Greece pushes through painful cuts and structural reforms -- are expected to reduce Greece's debt to a more manageable 120 percent of gross domestic product in 2020 from about 160 percent now.

But speculation has grown that Greece may need further funds than those promised by partners, with a growing sense among some that the country's current state of affairs is untenable.

Horst Reichenbach, head of the European Commission's task force to help rebuild the Greek economy, appealed to Europe for patience with the Mediterranean country, saying reforms were moving slowly but no miracles should be expected.

In Washington, an IMF spokeswoman said staff at the Fund had sought executive board approval for talks with Greece that might lead to a deal requiring "exceptional access" to IMF loans.

Greece already has exceptional access to IMF funding that allows it to draw more than 600 percent of its IMF quota and any further negotiations require fresh board approval.

(Additional reporting by Lefteris Papadimas and George Georgiopoulos,; writing by Deepa Babington. Editing by Jeremy Gaunt.)

Federal Reserve Bank of Philadelphia Manufacturing Index 7.3 consensus 10.7 previous 10.3

Previous was revised down from 10.3 to 6.8, so slightly better this month but not so good as was thought last month.
2517

Retail Sales m/m 0.6 v consensus 0.6 previous -0.4

Witching!