From Blogging Stocks…..

The German auction of 10-year bonds failed to receive the 6 billion euros the government wanted to raise. Countries across Europe including the UK, Italy, Spain, Austria, Belgium, and the Netherlands, had either to struggle to sell their bonds or cancel their debt offerings because of lack of demand. This is particularly foreboding because this year governments around the world are looking to raise $3,000 billion, three times more than in 2008.

From the LA Times…

And Los Angeles County officials said they would cover welfare payments to more than 500,000 local recipients — for now.

But California is projected to be $346 million short of the funds it needs to pay all its bills in February. By March, the state would be so far in the red that even continuing to suspend payments would not cover the shortfall. California would be insolvent, making the issuance of IOUs likely.

From later on in the article….

The state has also halted payments of bond money for more than 5,300 public-works projects.

On Friday, the state Department of Finance temporarily exempted 276 of the projects from the freeze, reasoning that because they are nearly complete, it could cost the state more to shut them down than to finish them.

From Yahoo News…

Traders unable to get rid of crude are selling at a huge discount as storage facilities fill up with unwanted oil and gas, said analyst Stephen Schork.

Those lucky enough to find unused storage facilities are holding their oil in hopes of cashing in on the higher March prices. But those prices could evaporate quickly, Schork said.

“Who the heck wants to buy right now?” Schork said. “If you’ve got barrels, you’re going to sit and wait and wait and wait.”

The uptick in February oil prices suggests there are still buyers out there who can either move crude or have found a rare storage facility. Still, Schork doesn’t expect industrial demand to perk up before the fourth quarter of 2009, and crude prices in March could suffer a worse fate than February, dropping below $30 a barrel, he said.

All those speculators who bought oil on the idea that it was going to go up forever are now getting wiped out. At first they were storing the oil hoping that it would go back up. But now they are running out of places to store the oil and and prices are still low.

From The Guardian…..

Wu is one of 160,000 collectors in Beijing who make a living from the detritus of urban life – plastic sheeting, office printouts, bottles, radiators and scraps of cardboard. Recycling has become a global industry and China is the largest importer of the world’s waste materials, taking in as much as a third of Britain’s recyclables for example. Then came the slump, decimating the Chinese recycling industry and leaving Britain, the US and others grappling with growing volumes of recycled waste and nowhere to send it.

“It’s a canary in the coalmine: it’s the front and back end of industry,” said Adam Minter, who runs the Shanghai Scrap blog and specialises in the metal trade. “Until about eight weeks ago, for example, the entire [US] west coast paper market was sent to China and most of it was sent south. It was processed and made into packaging for products that then shipped back to the US … But when US consumer demand dropped off, that broke the cycle.”

Never realized before that the US sent so much of its recyclables overseas to be processed.

From the Deal Journal (A WJS blog)….

Many of the problems originated at Merrill Lynch, which had a loss of $15 billion in the quarter, or three times worse than the last quarter. “To put [the] $15 bn after-tax [loss] in perspective, 60% of the common equity base of the company was lost in one quarter,” Goldman Sachs research analysts noted wryly in a research report this morning.

Felix Salmon has some questions.

Since Bank of America is bailing out/buying Merrill Lynch, you should also read “WSJ: Bank of America to Receive $20 Billion Injection, Support for $118 Billion of Loans” from Naked Capitalism to get a better idea of the extent of this mess.

From CNBC……

Electronics retailer Circuit City Stores reached an agreement with liquidators on Friday to sell the merchandise in its 567 U.S. stores after failing to find a buyer or a refinancing deal.

The company – which had been the nation’s second-biggest consumer electronics retailer, employing about 35,000 employees – appointed Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group as liquidators.