Scary Infaltion data

The U.S. consumer price index increased 0.8 percent, the most since September 2005, after a 0.3 percent gain in October, the Labor Department said today in Washington. Prices excluding food and energy, known as the core rate, climbed 0.3 percent, also more than anticipated.

German inflation accelerated in November to the fastest pace in 12 years, led by surging oil and food costs. Consumer prices, measured using a harmonized European Union method, rose 3.3 percent from a year ago after increasing 2.7 percent in October.

A survey from the Bank of England showed that Britons expect prices to rise next year at the fastest rate since comparable records began eight years ago. consumers expect prices to rise by 3pc over the next 12 months- the highest rate since the report started in 1999.

Citigroup said on Thursday that it plans to take $49 billion of structured investment vehicles onto its balance sheet, after ratings agencies' threats to downgrade the SIVs debt. Shares of Citigroup Inc dropped 2 percent to $30.40 before the bell on Friday after Moody's Investors Service cut its ratings on the largest U.S. bank by a notch.

Money markets failed to respond for a second day to the biggest effort by central banks in six years to restore confidence in the world financial system. The euro interbank offered rate banks charge each other for three-month loans stayed near a seven-year high, falling 1 basis point to 4.94 percent.

Earlier on Thursday, Greenspan said he raised his view of chances of a U.S. recession to 50 percent from 30 percent, according to CNBC television.

A shareholder sued UBS, contending the Swiss bank misled investors about write-downs related to securities linked to U.S. subprime mortgages.

Current turbulence on financial markets is a "serious" test for the global financial system and will have an impact on growth in the euro zone and in Germany, said Bundesbank vice president Franz-Christoph Zeitler in a speech.

The International Monetary Fund has called for a rapid assessment of the amount of losses involved by global banks in the US housing crisis to help end the credit squeeze.

Assured Guaranty Ltd. agreed to insure $29 billion of Ambac Financial Group Inc.'s bond insurance policies, the financial guaranty company said Thursday.

Bond insurer Security Capital Assurance Ltd. said Thursday it is reviewing multiple options to improve its capital position, after Fitch Ratings warned it had six weeks to raise money or face a catastrophic downgrade.

The amount of U.S. asset-backed commercial paper outstanding fell to the lowest since October 2005 as borrowing costs rose to the highest in three months and structured investment vehicles reorganized and shrank. Debt maturing in 270 days or less and backed by mortgages, credit-card loans and other holdings declined $10.3 billion, or 1.3 percent, to a seasonally adjusted $791 billion for the week ended Dec. 12.

U.S. Internet holiday sales are growing at the slowest pace on record as shoppers put off purchases ahead of year-end bargains. Sales from Nov. 1 through December 11 increased 19 percent to $20.5 billion, Reston, Virginia-based ComScore Inc. said yesterday. The slowdown contrasts with government data that showed retail sales in November rose at twice the rate anticipated by economists.

Morgan Stanley, Deutsche Bank AG, and other investment banks are on track to sell a record amount of bonds tied to real estate in Japan, where rising property prices have created a safe haven from the subprime concerns afflicting other markets.

Negotiators at United Nations climate talks agreed to U.S. demands, dropping specific targets on greenhouse-gas emissions from a draft document in order to salvage an agreement that will guide discussions on a global-warming treaty over the next two years.

Goldman Sachs bet that securities backed by risky home loans would fall in value brought nearly $4 billion of profits in the year ended November 30, the Wall Street Journal reported on its Web site on Thursday, citing people familiar with its finances. The company is expected to report a "record" net annual income of more than $11 billion, the Journal said.

Shares of Black & Decker slid more than 10 percent to $72 before the bell on Friday after the tool maker warned about its fourth-quarter and full-year profit outlook.

U.S. senators reached a deal to vote on a measure that would make Federal Housing Administration loans available to subprime borrowers facing foreclosure after a Republican senator dropped his objections.

Asian indexes were a mixed bag Friday. The Nikkei fell 0.14%. The Hang Seng fell 0.65%. The Shanghai Composite rose 1.01%. Bank stocks were lower in Europe as traders failed to perceive a noteworthy change in credit-market liquidity. European markets were flat as of 6:00 a.m. EST. The FTSE was down 0.02%. The CAC fell 0.3%. The Dax gained 0.01%.