Retailers, Walmart and Macy’s reported better than expected sales today while Macy’s also revised up their 4Q and full year forecast. These may be few bright spots in retail for now. Initial jobless claims rose to a 26 year high to 626,000 last week and I am sure this will result in further consumer belt tightening.

Bank of England cuts its benchmark interest rates by half a point to 1% while ECB kept the rates constant at 2%.

White House is close to finalizing the bank relief plan which would include the bad bank concept. Another possible inclusion is a change in the mark to market accounting rule that should help the banks stem the write downs on their balance sheets. However, none of these solves the real problem, and that is, the incredible number of foreclosures and the housing value erosion. This problem can only be fixed when the economy starts growing again and the companies start creating new jobs.

Jeff Immelt of GE has warned against pay caps and buy American provisions. He echoed the comments I made yesterday about pay caps discouraging best people to come and run these companies.