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First it was Jeffrey Gendell, now it is Michael Zimmerman, whose Prentice Capital Management lost 88% in 2008. Formerly a SAC golden boy, Zimmerman traded retail and consumer with Stevie for 5 years before launching independently in 2005. The 38 year old, who like Gendell thought that the market can never go down, had been trading stocks and bonds, and had about a third of its assets in highly illiquid securities.

• UPS Freezes Salaries and Suspends 401(k) match on biggest volume drop in decade (PR)
• Credit Suisse cutting bonuses by 55% (Bloomberg)
• Fitch is starting to sniff for a general obligation California downgrade (MarketWatch)
• $4.8
  

• 20 million jobs lost in China from downturn to date - this is actually a very big deal (FT)
• FDIC running out of cash, asks tripling of Treasury credit line to $100 billion (Reuters)
• UBS alienates all current brokers with ridiculous new hire bonuses (

Granted this topic deserves a much more extensive analysis and I hope to readdress it in the near future (but in the mean time welcome any thoughts), today Morgan Stanley is out with a note that brings up relevant good points.

In other tax evading news (just kidding) Eric Holder won the Senate vote to be U.S. Attorney General with a 75-21 total vote. While nobody has found any irregularities with Eric's 1040 forms (yet), he has had his share of notoriety for pardoning fugitive financier Marc Rich when he was deputy AG under Bill Clinton.

Bloomberg has done a good (and lengthy) analysis of the worst year ever of the world's third largest sovereign wealth fund, the $300 billion Norway Government Pension Fund.

Luis Arenzana has written an open letter to the FT in which he claims that the old man may have finally lost a screw in the "risk assessment" category.

And keeps it on further downgrade review...

We view this Bloomberg report with great suspicion.

15:00 *U.S. TREASURY ANNOUNCES QUARTERLY BORROWING NEEDS
15:00 *U.S. BORROWED $569 BLN IN OCT.-DEC. QTR VS $550 BLN FORECAST
15:00 *TREASURY CASH BALANCE WAS $367 BLN DEC. 31, $259 BLN FROM FED
15:00 *TREASURY SEES $225 BLN CASH BALANCE MARCH 31, $45 BLN JUNE 30
15:00 *U.S. TREASURY SEES BORROWING OF $165 BLN IN APRIL-JUNE QUARTER
15:00 *HIGHER U.S. BORROWING THIS QTR LARGELY DUE TO FED BILL PROGRAM
15:00 *TREASURY TO BORROW $493 BLN THIS QTR VS $368 BLN NOV. FORECAST

As we have pointed out before, one of the best artistic investments in this depression is possibly the artwork of Geoffrey Raymond.

14:00 *FED RELEASES QUARTERLY SENIOR LOAN OFFICERS SURVEY
14:00 *FED SAYS BANKS REDUCED LIMITS ON LINES OF CREDIT
14:00 *FED SAYS NEARLY 60% OF BANKS TIGHTENED CONSUMER-LOAN TERMS
14:00 *NET 80% OF BANKS TIGHTENED COMMERCIAL REAL-ESTATE LOAN TERMS
14:00 *FED SAYS NET 60% OF BANKS SAW REDUCED BUSINESS-LOAN DEMAND
14:00 *BANKS CITED DETERIORATING ECONOMY IN TIGHTENING LOAN TERMS
14:00 *FED SAYS 90% OF U.S. BANKS INCREASED BUSINESS-LOAN MARGINS
14:00 *FED SAYS 65% OF BANKS MADE IT HARDER TO GET BUSINESS LOANS

A report released earlier by Goldman thinkers Krag Gregory and John Marshall discussing volatility and options strategy, is recommending loading up the boat on S&P puts. The GS "portfolio strategy" team (we assume this is not the guys on the prop side who usually execute the opposite of whatever the sellside guys preach) expects the market to retest the 750 low in Q1, pretty much what Lehman said over the weekend.

The stress of the "biggest bankruptcy in history" and all those fee applications must really be getting to him.

Barclays/Lehman chief market strategist Barry Knapp came out with a report this weekend predicting a 10% drop for the S&P in this quarter, with a low of 750 to come soon. Why the pessimism? As Barry succinctly puts it "We were recently asked - Isn't all the bad news out? Unfortunately, we believe the answer is - No."