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Trichet Goes Gansta' on Inflation: 'We Will Do What is Necessary'

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Jobless Numbers Worse Than Expected — Snow Blamed [Reuters via CNBC] "New U.S. claims for unemployment benefits rose more than expected last week as harsh weather conditions in some parts of the country kept workers at home and caused a backlog in the processing of claims, a government report showed on Thursday. Initial claims for state unemployment benefits jumped 51,000 to a seasonally adjusted 454,000, the highest since late October, the Labor Department said. That was the largest weekly increase since September 2005. Economists polled by Reuters had expected claims to be little changed at 405,000."

NY Metro Area Slammed by Another Monster Storm [NY Post] The Big Apple was brought to a virtual halt early this morning by another monster storm — this one not only shutting area airports, but also closing city public schools and non-emergency government offices, as well as forcing the suspension of all buses citywide.

Trichet Goes Gansta' on Inflation: 'We Will Do What is Necessary' [Bloomberg] "European Central Bank President Jean-Claude Trichet reiterated policy makers will do what is needed to keep inflation in check and stressed that the ECB’s credibility on price stability remains intact. 'We will do what is necessary,' Trichet told Francine Lacqua in an interview with Bloomberg Television at the World

Economic Forum in Davos, Switzerland, yesterday. 'It is not by chance that we have delivered price stability. Our credibility is based on that doctrine.'

Yen Drops on Japanese Sovereign Rating Cuts [Financial Times] "The yen is slumping and US equity futures have pulled back from session highs after S&P downgraded Japan’s credit rating. The rating agency’s move has revived sovereign debt fears that had abated of late after several successful bond auctions in the eurozone. However, European bourses have recovered early losses immediately following the news as traders remain generally enamoured of the ongoing global earnings season. A better showing for the Shanghai market, which has been under pressure of late, is also helping the mood."

"State Defaults in U.S. Unlikely 50% of Investors Say in Poll" [Bloomberg] According to a new the probability of a major default is pick em' game: "Investors are divided over whether a big U.S. city or state will default on its bonds this year, though most say the federal government would step in with a bailout and a financial crisis would be averted."