Morning Call

Here are a few important stories hitting Wall Street this morning. First let’s look at some more dismal news from the banking sector.

Citigroup (C) reported a quarterly loss of $8.3 billion. The bank is going to split into two–one will have the good assets, the other will have the bad assets. The stock closed below $4 a share yesterday. Compare that to Citi’s operating loss for the fourth of quarter of $2.44 a share. Yikes!

Bank of America (BAC) reported a loss of 48 cents a share. The Street was expecting a 24 cent profit. On top of that, BAC said that Merrill Lynch, which the company just bought, lost an amazing $15 billion for the fourth quarter and that’s not reflected in BAC’s earnings report. Bank of America just got $20 billion more in TARP money.

The CPI for December was -0.7% while the core rate was flat. Last year was the lowest inflation rate in 50 years. The negative core CPI of the past three months is clear evidence of the deflationary cycle that we’re in.

Thirty-year mortgage rates are now below 5%.

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