The federal Commodity Futures Trading Commission (CFTC)

The CFTC stayed mum when the Fed, Federal Deposit Insurance Corporation, Securities and Exchange Commission and Office of Comptroller of the Currency released their joint proposal last year. The four agencies extended the comment period on their proposal until February 13 after financial-industry groups and lawmakers cited the complexity of the rule and the lack of coordination with the CFTC in requesting an extension.

The CFTC may soften Dodd-Frank a bit, granting Wall Street banks exceptions to rules requiring dealers to sensibly believe their derivatives are suitable for clients and in the best interests of endowments and other so-called special entities.  The rules “implement requirements for swap dealers and major swap participants to deal fairly with customers, provide balanced communications, and disclose material risks, conflicts of interest and material incentives before entering into a swap,” CFTC Chairman Gary Gensler said.

Opponents say the CFTC proposal would cause “severe market disruption” by transforming the relationship between swap dealers and clients such as pensions and municipalities, according to Sifma and the International Swaps and Derivatives Association, Inc.. Under the final rule, dealers must disclose material risks and daily mid-market values of contracts to their clients. The CFTC may also complete rules designed to protect swap traders’ collateral that is used to reduce risk in trades. The rule insulates the collateral if the broker defaults, while allowing the customer funds to be pooled before a bankruptcy, according to a CFTC summary of the regulation.

Commissioner Scott O’Malia voted in favor or the rule, but said he did not want to give market participants “a misleading sense of comfort” that it would have prevented the loss of customer money at the brokerage giant.  “This rulemaking does not address MF Global,” O’Malia said. “This rulemaking would not have prevented a shortfall in the customer funds of the ranchers and farmers that transact daily in the futures market. Nor would it have expedited the transfer of positions and collateral belonging to such customers in the event of a collapse similar to that of MF Global.”

Commissioner Jill Sommers, who voted against the rule, criticized the rule for doing nothing to protect a futures commission merchant’s futures customers.  “Given recent events, we need to re-think this approach so we can provide adequate protections, in a comprehensive and coherent way, to swaps customers and to futures customers,” Sommers said. “I do not favor a piecemeal approach to customer protection.”

A rare glimpse of bi-partisanship was seen today in the House of Representatives

According to Giffords’ resignation letter, “Even as I have worked to regain my speech, thank you for your faith in my ability to be your voice.  Everyday, I am working hard.  I will recover and will return, and we will work together again, for Arizona and for all Americans,” she pledged to her former colleagues and constituents.  Giffords, who has promised that she will return to public service when she is fully recovered from her gunshot wound, faces months – even years – of rehabilitation.

One of Giffords’ final actions in her five years in Congress was to vote in favor of a bill that she had co-sponsored and which dealt with smuggling on the United States Mexico border. The measure passed unanimously. The legislation outlaws the use of ultralight aircraft to smuggle drugs.  Giffords’s congressional district includes part of Arizona’s southern border with Mexico.  The legislation, which the Senate is expected to approve quickly, would subject violators to up to 20 years’ imprisonment and a $250,000 fine.

The session was emotional at times. Democratic Minority Whip Representative Steny Hoyer (D-MD) said “The House of Representatives of America has been made proud by this extraordinary daughter of this House, who served so well during her tenure here, who felt so deeply about her constituents and cared so much for her country.  Gabby, we love you. We have missed you.”  Speaker of the House John Boehner (R-OH) was teary-eyed as he formally declared Giffords’ resignation.

Giffords’ husband, Mark Kelly – a retired Navy Captain and former astronaut – summed up his wife’s position.  “She realized she was not going to run for re-election and this point the right thing to do was for her to step down,” Kelly said.  “But I’m more optimistic than anybody else about her future.  She just needs some more time, whether it’s a year or two years or three years, I’m very confident she’s going to have a long and effective career as a public servant.”

Writing in the Tucson Citizen, Carolyn Classen said that “There is a bumper sticker ‘Gabrielle Giffords continues to inspire’ which was placed at the Tucson three impromptu memorials that sprang up after the shooting.  It was a testament of her courage and inspirational fight back to health, which is still ongoing (and the reason for her resignation).  Because the Glock 9mm bullet entered the left side of her brain, Gabby’s right leg, right arm/hand, and speech were affected by the injury, and she now is working in rehab with her aphasia –speech & language difficulties — and reduced physical mobility.  Prior to this shooting, Gabby was an avid hiker, and rode horses, a bicycle, and a motorcycle.  But I know what a healthy, friendly, strong-willed individual she was as a politician and community activist, and I know she will work tirelessly now at age 41 to recover fully from her injury.  She took a bullet in the line of duty as a U.S. Congresswoman and should be praised for her courage and resiliency, and hard work for over 10 years as a state & federal legislator.”

With Giffords’ resignation, Arizona Governor Jan Brewer is required to schedule a special election to fill the term.  The primary is likely to be in April and the general election in June.  The winner will then be up for re-election to a full two-year term in November.

Arizona law requires that the governor act within 72 hours to schedule a special election to fill a vacant U.S. House.  According to Brewer spokesman Matthew Benson, the 72 hours begins Wednesday, January 25, at 5 p.m. because that is when Giffords’ resignation takes effect.

According to scientists at NOAA, 2011 broke records for climate extremes, as much of the United States faced historic levels of heat, precipitation, flooding and severe weather.  This was driven in part by La Niña events at both ends of the year that impacted weather patterns in the United States and around the world.  NOAA’s annual analysis of U.S. and global conditions, conducted by scientists at NOAA’s National Climatic Data Center, reports that the average temperature for the contiguous 48 states was 53.8 degrees F, 1.0 degree F above the 20th century average, making it the 23rd warmest year on record.  Rain from coast to coast averaged near normal, despite record-breaking extremes in both drought and precipitation.

Kathryn Sullivan, assistant secretary of commerce for environmental observation and prediction and deputy NOAA administrator, described 2011 as an “extraordinary year.”  “It was extraordinary regarding major weather and climate disasters in particular in our country, from tornadoes to droughts to floods and extreme storms,” she said.  “America endured an unusually large number of extreme events causing damages totaling more than $55 billion dollars.”

By contrast, NASA research counters that 2011 was the 9th warmest year since records were first taken in 1880.  In fact, since that year, nine of the 10 warmest years on record have been in the decade since 2000, a rise in global temperature is evident. The only of the 10 warmest years that was not during the past decade was in 1998. Meanwhile, 2010 is still the warmest year on record overall.  The data was gathered from more than 1,000 meteorological stations across the globe.  NASA estimates that over the next few years we’ll see a year that will top 2010′s record breaking temperatures.  “It’s always dangerous to make predictions about El Niño, but it’s safe to say we’ll see one in the next three years,” James E. Hansen, director of NASA’s Goddard Institute for Space Studies, said. “It won’t take a very strong El Niño to push temperatures above 2010.”

According to NASA scientists, 2011 demonstrated a continuing strong trend linked to greenhouse gases.  NASA noted that the current warmer temperatures are primarily sustained by increased concentrations of greenhouse gases in the atmosphere, especially carbon dioxide. Carbon dioxide is created by a variety of human activities, such as coal-fired power plants to fossil-fueled vehicles to human breath.  At present, levels of carbon dioxide in the atmosphere exceed 390 parts per million (ppm), compared with 285 ppm in 1880 and 315 by 1960, according to NASA.

Writing in The Atlantic, Rebecca J. Rosen says that “In 1880, when the study’s temperature record-keeping begins, the concentration of carbon dioxide was 285 parts per million. Today it is more than 390 parts per million and rapidly rising. Many top climate scientists, including NASA’s James Hansen, have argued that a level not exceeding 350 parts per million is necessary ‘if humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted.’”

The global apartment sharing startup AirBnB

“Over the past three years, we’ve built a community marketplace for unique properties and brought it into the mainstream and into almost every country on the planet,” said Brian Chesky, co-founder and CEO of AirBnB.  “Today is a watershed moment – both for AirBnB as a company and for our community – that will enable us to touch new markets and expand our vision to make the world’s most interesting and inspiring places accessible to our users.”

At present, AirBnB has more than two million nights booked, more than double its rate of bookings just four months ago.  Its website receives more than 30 million hits per month and the number of AirBnB social connections has tripled to 54 million since the feature launched in May.  AirBnB has the capacity to rent properties by the night, owned by real people in 16,702 cities in 186 countries.

“We started realizing there is a growing trend of people who are doing this and making a living on Airbnb,” said Chesky, who founded the company in 2008 with Joe Gebbia and Nathan Blecharczyk.  “That’s what turned this into a movement and tipped it into the mainstream.”

AirBnB tries to prevent bad behavior on the part of the host or visitor by allowing people to post ratings and reviews of both hosts and travelers on their website, similar to eBay.  Users who connect to the site via Facebook can see if they and a potential guest or host have any mutual friends or a shared alma mater.  The site lets hosts ask for a deposit to cover damage or other problems.  To use the AirBnB website, visitors search for listings in the location they want to visit.  Once they have found the preferred location, they send a message to the host with any questions about the room or its location.  Next, users pay for their stay using a credit card or PayPal.  AirBnB holds the money until the day after the guests check in, assuring that the hosts are not cheated out of their cash.  The site profits by charging a transaction fee for each reservation.

When a young Toronto woman’s roommate moved out, she decided to rent out her extra bedrooms to travelers. The service has unexpectedly made her a bed-and-breakfast owner, bringing in approximately $1,800 a month, a nice cushion as she works on starting her own business.  “It pays my rent with a little left over,” she said.  “I’ve been able to upgrade my place, paint and get new furniture, which in turn means I can charge more.”

“The AirBnB movement has changed the way people experience the world,” Gebbia said.  “This investment will help us respond to increasing international demand by accelerating hiring, and the opening of offices around the world, in order to support our growing community on more local levels.”

On the Forbes website, Nicole Perlroth says that “Venture firms have been salivating to get a piece of AirBnB for months.  Union Square Ventures’ Fred Wilson famously referred to AirBnB as the one that got away. Other investors have been falling all over themselves trying to back AirBnB copycats for office space, tutoring, cars and even, experiences. The round, pricey as it may be for a three-year-old startup, is still coup for the VCs involved.  Andreessen-Horowitz initiated talks with AirBnB about a potential investment long before Jordan joined the firm last month.  (Andreessen-Horowitz’s newest partner Jeff) Jordan, a former eBay executive, says he was eager to lead the deal for AH because ‘(AirBnB) reminded me more of eBay in its early days than any other business I had seen.’”

There currently are approximately 250,000 foreclosed properties on the books of Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA), and millions more are expected.  Last year’s foreclosure processing delays created an enormous backlog of properties yet to be processed and are just now being restarted. One of the program’s initiatives is for the federal government to mitigate and manage new foreclosures.  Late-stage delinquencies still number close to two million, according to a report from Lending Processing Services (LPS).  Foreclosure starts are double foreclosure sales and “the trend toward fewer loans becoming delinquent, which dominated 2010 and the 1st quarter of 2011, appears to have halted,” according to LPS.

“I think there is a fair amount of money in the wings waiting to buy, investors doing cash raises to buy properties on a large scale,” said Laurie Goodman of Amherst Securities. “But that means they have to build out a rental organization; it means they build out a management company, because if you’re accumulating a hundred homes in Dallas that’s very different than running a multifamily building.”

This is good advice. The recession began with housing, and is one of the main things holding back the recovery.   The most recent unemployment numbers — which showed that non-farm payrolls grew by 200,000 in December, and the jobless rate declined to 8.5 percent from 8.7 percent  — join other cautious signs of an improving economy, although the housing situation is worsening.  There’s still a serious risk it might put a halt to and not just delay expansion.

“Foreclosed homes are a complex problem. We need some creative thinking and new processes to solve the problem of so many distressed homeowners.  I would love to see the market handle it on its own but what makes sense for a single home is likely to destroy confidence in the housing market in aggregate,” said Jafer Hasnain, Partner at Lifeline Assets.  “Housing distress needs a Michael Dell to think about streamlining process details, and a Steve Jobs to make it elegant and human.”

House prices fell again in October, according to the S&P/Case-Shiller index.  The pipeline of delinquencies and future foreclosures is full, which continues to dim the prospects of a quick recovery.  Efforts so far, such as the Home Affordable Modification Program (HAMP), have helped, but less than hoped.

According to the Federal Reserve, there are no simple answers, but it makes several suggestions that Congress should examine.  One is to encourage conversions from owner-occupied to rental because that market has strengthened in recent months: Rents have risen and vacancies have declined.  A faster conversion rate would hold down rents and ease the pressure of unsold homes on house prices. Fannie, Freddie and the Federal Housing Administration account for about 50 percent of the inventory of foreclosed properties.  Many of these are viable as rentals.  A government-sponsored foreclosure-to-rental program to clear away regulatory hurdles would make a big difference.

A second suggestion is to encourage refinancings.  The administration tweaked the existing HAMP program in October, easing some of the earlier restrictions on eligibility.  Even more could be done, according to the Fed.  One possibility involves the fees that lenders pay to Fannie and Freddie for assuming new risks when loans to distressed borrowers are refinanced. These charges could be cut or eliminated, even though Congress just voted to increase them to help pay for the payroll-tax extension.

Some institutional investors have shown interest in bulk REO deals, but the plan has to incorporate ways to help facilitate financing.  That has been one of the biggest barriers to deals already in the works between hedge funds and the major banks.  There is plenty of cash to buy properties, but creating a management structure for the rentals is costly, and some investors are finding the math doesn’t add up to make it worth their while.

Larger investors want to get real scale in any government program, in the range of 50, 100, 500 properties per deal, or $1 billion-plus in assets. That’s why the government is looking to test several different approaches.  Fannie Mae did a $50 million sale in June, although that was on the small side. Officials are evaluating what larger asset sales would look like.

“We expect several pilots that will involve both local investors and institutional investors. The goal here is to reduce supply by converting foreclosed homes into rental units,” says Jaret Seiberg of Guggenheim Securities. “Less supply – even less fear about a flood of foreclosed homes hitting the market – could stabilize (home) prices.”

Germany’s unemployment declined more than predicted in December as car and machinery exports boomed and one of the mildest winters on record helped construction jobs.

Except for an unexpected 6,000 increase in October, German unemployment has declined in every month since June 2009. The average jobless total in unadjusted terms for 2011 was well below the three million mark, Labor Agency head Frank-Juergen Weise said.  “German unemployment mastered the dual impact of the debt crisis and weakening economic growth in 2011 but these risks remain, accompanying us as we enter the new year, Weise said.

Both the jobless total and the jobless rate were at their lowest level since unification in 1991, noted German Economy Minister Philipp Roesler. “2011 can be described as the most successful since German unification for working people,” Roesler said.  “Demand for labor remains very high, despite the current economic risks.  Overall, the upturn in employment should continue, albeit at a slower rate.  The labor market remains one of the main pillars of our economy,” the minister said.

The national statistics office Destatis reported that the number of employed people in Germany hit a new record of 41.04 million in 2011, with more than 500,000 jobs created.  It was the first time the number of people working in Germany has risen above 41 million, Destatis said.  The nation’s population is approximately 82 million.

“Overall, labor market conditions will remain markedly healthier in Germany than in most other countries in Europe in the months ahead,” said IHS Global Insight’s Timo Klein. At present, Germany is confronting a shortage of skilled labor.  Leading economists anticipate that Germany’s economic growth will slow in 2012, in line with other major Eurozone economies, which may put a squeeze on wages and jobs.  But, unemployment at a record low for the last 20 years, is a position that most countries envy and a sign of the way Germany has rebuilt itself since the Wall was torn down.

“Germany’s manufacturing and export-driven economy finished the year strongly — piling on another 22,000 jobs in December,” said Anthony Cheung of market analysts RANsquawk.  “Behind the strong performance lie some adept moves by Germany’s exporters.  As their Eurozone markets weakened, they have been very good at moving their focus elsewhere.  German carmakers have more than compensated by dramatically growing sales to developing markets.”

This is one reason why companies are not shedding significant staff, even if the economy hits a downturn, said Berenberg Bank’s Holger Schmieding.

Germany’s labor market strength means that domestic demand will “remain a pillar of support” to the eurozone “under very challenging circumstances otherwise,” Schmieding said.  The Eurozone badly needs this help.  For example, Spain again published dire labor market data with the jobless rate rising by nearly 2,000 in December when compared with November.  Eurostat’s most recent data showed October unemployment in Spain at 22.8 percent, by far the Eurozone’s highest.

Spain represents an entirely different scenario.  During 2011, unemployment in Spain soared 7.9 percent, totaling an astonishing 322,286 individuals.  Nearly one-third of all the Eurozone’s unemployed are Spanish; approximately 50 percent of young Spaniards are out of work.  The tough austerity measures outlined by the new prime minister, Mariano Rajoy, are likely to push Spain’s jobless rate even higher.  These include €8.9 billion in spending cuts and tax increases to cut Spain’s borrowing which should total €16.5 billion in 2012.  Spain closed out 2011 with a deficit of 8 percent of its GDP, significantly higher than the six percent reported at the end of 2010.  “This is the beginning of the beginning,” said Deputy Prime Minister Saenz de Santamaria, noting that Spain is facing “an extraordinary, unexpected situation, which will force us to take extraordinary and unexpected measures.”  She stressed that the wealthiest will be increasingly taxed for at least two years, resulting in expected budgetary gains of €6 billion.

These numbers represent a new 15-year high in Spain’s unemployment rate “The figures for the number of registered unemployed for the month of December confirm the deterioration of the economic situation during the second half of the year,” according to Spain’s labor ministry.  Once the Eurozone’s job creation engine, Spain has struggled to find jobs for the millions thrown out of work since the 2008 property bubble collapse.

The bad news fueled fears that Spain, the Eurozone’s fourth-largest economy, was slipping back into recession after the economy posted zero growth in the 3rd quarter of 2011.  Prime Minister Rajoy’s new government has promised to fight unemployment and fix the country’s finances as its top priorities.  Rajoy plans to present a major labor market reform which will alter hiring laws and Spain’s collective bargaining system to encourage companies to hire workers.

Spain’s secretary of state for employment, Engracia Hidalgo, said the successive labor reforms carried out by the previous government “never made the labor market more dynamic and flexible.”  Spain  lets the jobless receive unemployment benefits for a maximum of two years.  Prime Minister Rajoy’s government extended a monthly payment of 400 euros ($520) for people whose benefits have run out.  Otherwise, the payments would have expired in February.

European leaders will this week try to deliver new fiscal rules

France was not the only Eurozone nation to feel the pain. Austria was cut to AA+ from AAA; Cyprus to BB+ from BBB; Italy to BBB+ from A; Malta to A- from A; Portugal to BB from BBB-; the Slovak Republic to A from A+; Slovenia to A+ from AA-; and Spain to A from AA-. S&P left the AAA ratings of Germany, Finland, Luxembourg and the Netherlands the same.

The European Central Bank (ECB) emerged unscathed.  The ratings agency said Eurozone monetary authorities “have been instrumental in averting a collapse of market confidence,” mostly thanks to the ECB launching new loan programs aimed at keeping the European banking system liquid while it works to resolve funding pressure brought on by the sovereign debt crisis.

The talks on Greece and budgets may serve as tougher tests of the tentative recovery in investor sentiment than S&P’s decision to cut the ratings of nine Eurozone nations, including France. If history repeats itself, fallout from the downgrades may be limited.  JPMorgan Chase research shows that 10-year yields for the nine sovereign nations that lost their AAA credit rating between 1998 and last year rose an average of two basis points the next week.

Policymakers worked doggedly to take back the initiative. German Chancellor Angela Merkel said S&P’s decision and criticism of “insufficient”  policy steps reinforced her view that leaders must try harder to resolve the two-year crisis. Germany is now alone in the Eurozone with a stable AAA credit rating. Reacting to Spain’s downgrade to A from AA-, Prime Minister Mariano Rajoy pledged spending cuts and to clean up the banking system, as well as a “clear, firm and forceful” commitment to the Euro’s future. French Finance Minister Francois Baroin said the reduction of France’s rating was “disappointing,” yet expected

The European Financial Stability Facility (EFSF), which is intended to fund rescue packages for the troubled nations of Greece, Ireland and Portugal, owes its AAA rating to guarantees from its sponsoring nations. “I was never of the opinion that the EFSF necessarily has to be AAA,” Merkel said.  Luxembourg Prime Minister Jean-Claude Junker said the EFSF’s shareholders will look at how to maintain the top rating of the fund, which plans to sell up to 1.5 billion Euros in six-month bills starting this week. In the meantime, Merkel and other European leaders want to move speedily toward setting up its permanent successor, the European Stability Mechanism, this year — one year ahead of the original plan.

Greece’s Prime Minister Lucas Papademos said that a deal will be hammered out. “Some further reflection is necessary on how to put all the elements together,” he said. “So as you know, there is a little pause in these discussions. But I’m confident that they will continue and we will reach an agreement that is mutually acceptable in time.”

Standard & Poor’s downgraded nine of the 17 Eurozone countries and said it would decide before too long whether to cut the Eurozone’s bailout fund, the EFSF, from AAA.  “A one-notch downgrade for France was completely priced in, so no negative surprise here, and quite logical after the United States got downgraded,” said David Thebault, head of quantitative sales trading at Global Equities.

Thanks to the downgrades, fears of a Greek default also increased after talks between private creditors and the government over proposed voluntary write downs on Greek government bonds appeared near collapse.  Greece appears to be close to default on its sovereign debt, eclipsing the news that France and other Eurozone members lost their triple-A credit ratings.  “At the start of this year, (we) took the view that things in the Eurozone had to get worse before they got better. With the S&P downgrade of nine Eurozone countries and worries about the progress of Greek debt restructuring talks, things just did get worse,” wrote economists at HSBC.

Additionally there are implications for Eurozone banks from the sovereign downgrades.

“The direct impact of further sovereign and bank downgrades on institutions in peripheral.  nations is perhaps neither here nor there given that they are already effectively shut out of wholesale funding markets due to pre-existing investor concerns over the ability of governments in these countries to stand behind their banks,’ said Michael Symonds, credit analyst at Daiwa Capital Markets.

Writing in the Sydney Morning Herald, Ha-Joon Chang says that “Even the most rational Europeans must now feel that Friday the 13th is an unlucky day after all.  On that day last week, the Greek debt restructuring negotiation broke down, with many bondholders refusing to join the voluntary 50 per cent ‘haircut’  – that is, debt write off – scheme, agreed to last summer. While the negotiations may resume, this has dramatically increased the chance of disorderly Greek default.  The Eurozone countries criticize S&P and other ratings agencies for unjustly downgrading their economies. France is particularly upset that it was downgraded while Britain has kept its AAA status, hinting at an Anglo-American conspiracy against France. But this does not wash, as one of the big three, Fitch Ratings, is 80 per cent owned by a French company.”

An American icon is on the verge of bankruptcy.

The venerable firm could be saved if it sells its valuable digital patents very quickly, but Kodak officials are preparing for the worst, and talking to banks about the possibility of borrowing $1 billion to keep the company in business during bankruptcy proceedings.  Their plan is to sell some 1,100 patents through a court-supervised auction.

Kodak is estimated to employ 18,800 people. Benefits and pensions are of great concern to retirees and employees.   George Conboy of Kodak tweeted, “In bankruptcy, Kodak will cut all costs possible. My opinion: health care goes.” Robert Kravetz, senior vice president and financial adviser, explained: “Most likely the health insurance will just go away. This is common in the United States, based on the rising cost of health care and the squeezing economic cycle and the profitability of large corporations.”  For those with pensions, Conboy tweeted, “Pension is slightly underfunded but our opinion is that gets fixed in bankruptcy.  No losses for Kodak retirees.”

Kodak, which has seen its stock value tumble as digital imagery fast replaced film, is selling off its patents to avoid a Chapter 11 filing.  Once the unchallenged manufacturer of photographic film, Kodak helped invent the digital camera in 1975 but could not capitalize on the technology, especially when compared with Canon or Nikon.  Foreign competitors and the popularity of cell phones with built-in cameras and sharing capabilities also harmed the company.  Kodak tried to compensate with a printing business, bringing in former HP printing chief Antonio Perez to head the company, but it was unable to pull off a turnaround.

“Chapter 11 is not the end of the world at all. It’s not uncommon for companies in financial distress to sell off assets to try to raise some money. They could be talking to major lenders and saying, ‘We want to restructure’ and talking about options such as extending debts or giving stock to lenders,” John A.E. Pottow, professor of law and a bankruptcy expert at the University of Michigan, said.  Without a viable business plan or innovative idea about how to assure investors that with a little time and money, the company will be back to its old self, Pottow believes that it’s possible it could face a future closer to that of Borders.

Rochester, NY-based Kodak lost an astonishing 88 percent of its market value last year. Five-year credit-default swaps related to Kodak’s debt climbed 2.9 percent to 70.4 percent upfront, according to data provider CMA. That means it would cost $7.04 million initially and $500,000 annually to protect $10 million of Kodak’s debt.  Single-year protection soared adding a record 8.2 percent to 66.2 percent, according to CMA, which compiles prices quoted by dealers in the privately negotiated market.  Credit-default swaps pay the buyer face value if a borrower is unable to meet its obligations, minus the value of the defaulted debt. The contracts, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, climb as investor confidence deteriorates.

Several board members resigned last month, including Laura D. Tyson, a director since 1997, Tyson said that her 2012 schedule made it “virtually impossible” to continue to serve, and she resigned to help the company reach an “optimal” board size.  “It’s not a statement about the firm’s strategy or the firm’s leadership,” Tyson said. “I was part of the board for a long time, I was part of the strategy to transform the company, then part of the strategy of choosing the company CEO, I’ve worked closely with him and with the other members of the board.”

Tyson, a professor at University of California Berkeley’s Haas School of Business, declined to comment on what Kodak will do next.  She has advised Presidents Barack Obama and Bill Clinton and sits on the boards of at least five companies, including Morgan Stanley and AT&T, Inc.

Writing in Forbes, contributor Larry Magid says that “Like a silent movie star who never quite made the transition to talkies, the once venerable Eastman Kodak company could fade from the picture. There was also a time when I purchased a lot of Kodak film and developing services.  As a kid I even bought flashbulbs from Kodak.  But the glory days of Kodak’s supply business are long gone.  When people buy a Kodak digital camera, they have little reason to return for additional supplies.  Sure Kodak sells paper and even printers and that highly profitable printer ink, but —despite some valiant efforts and a pledge to turn inkjet sales into a profitable business, — they haven’t been able to make a serious dent in that market.”

The United States added more than 200,000 jobs in December of 2011,

“It would have been even better without the drag from Europe,” said John Canally, economic strategist at LPL Financial, a stock brokerage firm. “The Europe situation created uncertainty, and uncertainty was used as a reason not to hire until now.”  The year ended even more strongly than economists had predicted.  They had forecast that employers would add a net 150,000 jobs in December, according to a survey by Factset. They also had predicted that the unemployment rate would tick up to 8.7 percent from November’s 8.6 percent; this is the lowest rate since March 2009.

In the end, November’s unemployment rate was revised up in this report, to 8.7 percent.  The better-than-expected monthly gain of 219,000 private-sector jobs means American businesses have replaced more than three million of the 4.2 million private-sector jobs that were lost the past 13 months. The private-sector jobs gained since employment bottomed in February of 2010 marks the strongest recovery since the 1990-1992 recession, when U.S. businesses added 4.2 million jobs in the same amount of time.

The new job numbers highlight the fact that the U.S. economy is on its way to recovery even as strains in Europe persist,” said David Watt, senior currency strategist at RBC Capital in Toronto. The fact that the labor market is gaining traction should be good news to the Obama administration, whose economic policies are relentlessly attacked by the political opposition.

This string of better-than-anticipated economic indicators has highlighted the stark contrast between the recovery in the world’s biggest economy and Europe, which faces bad times for months or even years.  Even with the good news, the American economy needs an even faster pace of job growth over a sustained period to make a noticeable dent in the pool of the 23.7 million people who remain out of work or underemployed in the wake of the 2007-09 recession.

December marked the 15th consecutive month that employment numbers have risen. Marcus Bullus, trading director at MB Capital, said: “That’s one hell of a number. Such an impressive fall in both the number of jobless Americans and the unemployment rate will cheer everyone bar Republican spin doctors.  The Obama administration could be forgiven for showboating over this convincing evidence that America’s economy is pulling away from Europe’s.  From a market perspective, strong US data like this will add to optimism, but nobody doubts the considerable downward pressure the Eurozone will continue to place on the global marketplace during 2012.”

Automatic Data Processing’s (ADP) numbers for December are even more impressive, saying the government added 325,000 jobs in December.  ADP’s figures do not always match the government’s, and economists warned that seasonal factors could have boosted the figures. Even so, all the major measures of the job market appear to be on the upswing.

Lasting payroll gains are needed to chip away at joblessness and support household spending, which accounts for approximately 70 percent of the world’s largest economy. The labor market figures come on the heels of recent data showing increased manufacturing and a rebound in consumer sentiment that show the U.S. is barely impacted by Europe’s debt crisis.  “You got the trifecta — more people working, wages up and the average work week up,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc., who accurately forecast the December payroll gains.  “You can’t really argue that that isn’t a sign of significant improvement in the job market.”

Yearly benchmark revisions showed the unemployment rate averaged 8.9 percent in 2011, down from 9.6 percent and 9.3 percent in the previous two years. It still ranks as the worst three-year period since 1939 to 1941.

Writing in the Wall Street Journal, Phil Izzo says the increase is “for real.” According to Izzo, “While the unemployment rate has been falling in part due to people leaving the labor force, a large portion of this month’s number appears to come from people finding jobs.

“The unemployment rate is calculated based on people who are without jobs, who are available to work and who have actively sought work in the prior four weeks. The actively looking for work’ definition is fairly broad, including people who contacted an employer, employment agency, job center or friends; sent out resumes or filled out applications; or answered or placed ads, among other things. The rate is calculated by dividing that number by the total number of people in the labor force.

“The key to the drop in the broader unemployment rate was due to a 371,000 drop in the number of people employed part time but who would prefer full-time work, that comes on top of big drops in that category over the past two months. That number could reflect people having their hours increased or part-time workers moving on to full time work,” Izzo concluded.

“Headwinds remain, but not enough to derail the recovery or set us back momentarily,” said Diane Swonk, chief economist at Mesirow Financial in Chicago, although she remains cautious about the outlook.  According to Swonk, the increase in new unemployment claims were reported in the weeks after the April jobs surveys.  Job losses in the public sector could intensify, with more teachers getting laid off as the school year ends and local governments deal with budget shortfalls.

The number of officially unemployed Americans totaled 13.75 million in April, an increase over the 205,000 reported in March, according to the Labor Department.  “At this point, coming out of a recession this deep, we should be getting unambiguously huge growth, of 300,000 to 400,000 (new jobs) a month,” said Heidi Shierholz, a labor economist at the Economic Policy Institute.  “And it’s just nowhere near that.  We’re still in a rocky place.”

April’s job growth was in multiple sectors.  For example, the retail industry added 57,100, approximately half at general merchandise stores.  Manufacturing added 29,000 more workers in April.  Since December 2009, factory payrolls have risen by 250,000, according to the Labor Department.  Business and professional services, whose wages tend to be higher than average, grew by 51,000, with consulting businesses, computer services and architectural firms experiencing growth.  Educational and health services, and the leisure industry, each also added nearly as many jobs.  Even the construction industry saw a small gain in April.  Government was the sole employment group that declined; its payrolls contracted by 24,000, primarily due to cuts at state and public agencies.

According to Austan Goolsbee, Chairman of the White House Council of Economic Advisers, “The last three months we’ve added more than a quarter million jobs, on average, every month.  That’s very heartening and the fact that it was, really, across a whole lot of industries.”

According to Heather Boushey, an economist at the Center for American Progress, a non-profit think tank in Washington, D.C., “We need to see job growth break above 300,000 a month and stay at that level for many months before the unemployment rate will begin to come back down.  Today’s report provides a number of data points that point toward caution in interpreting the data positively in anticipation of that level of jobs growth returning anytime soon.  The average hours worked for production and nonsupervisory employees was 33.6 hours per week in April, the same as in March.  This remains below the 2000s recovery peak of 33.9 hours per week, and far below the late 1990s peak of 34.6 hours per week.  At the same time, employers shed 2,300 temporary workers, which either means they are hiring permanent employees or they are no longer seeing an increase in demand.