MORNING COFFEE

German GDP Falls.  Germany's economy shrank -5% in 2009, the first contraction in six years and the worst contraction since World War II.  Economists had expected a -4.8% contraction.  For 2010 government officials plan to raise their growth forecast to +1.5% from +1.2%.

Trade Deficit Grows.  November's trade deficit rose 9.7% to $36.4 billion, larger than the $34.7 billion economist expected. Adjusting for inflation, the trade deficit grew 6.2%, prompting some economists to cut their estimates for Q4 economic growth. Exports were up +0.9% to $138.2 billion, but imports rose +2.6% to $174.6 billion.

SEC Files New Suit Against BofA.  The SEC filed new charges against Bank of America (BAC), for failing to disclose "staggering financial losses" at Merrill Lynch prior to the merger of the two firms. BofA is now facing two lawsuits from the SEC.   

Google To Leave China.  Google (GOOG) said it will stop censoring results on its Chinese site and risk being ejected from the world's most populous internet market after a 'highly sophisticated' cyber attack that was aimed at the email accounts of human-rights activists. At least 20 other large companies were also targeted by hackers Google believes are based in China.

Economic reports to be released today are: Crude Inventories 10:30 EST, Tresuary Budget 2:00 EST, Fed’s Beige Book 2:00 EST

·         Futures: Dow flat. S&P +0.1%. Nasdaq flat. Crude -1.1% to $79.89. Gold flat at $1,128.80.

·         Asia, Nikkei -1.3% to 10,735. Hang Seng -2.6% to 21,749. Shanghai -3.1% to 3,173. BSE +0.5% to 17,510.

·         Europe at midday, London -0.4%. Paris -0.1%. Frankfurt +0.2%.