3.2% GDP probably sounds a lot lot better than anything recessionary, but that was a tad under economic projections. The good news is that the inflationary component remained weak enough that it is harder to argue against the FOMC's no-to-low rate policy. The markets had a hard time getting into positive territory, and showed it was impossible to remain there.

Here were today's unofficial closing bell levels:

Dow 11,008.61 -158.71 (-1.42%)
Nasdaq 2,461.19 -50.73 (-2.02%)
S&P 500 1,186.68 -20.10 (-1.67%)

Merna Re, the largest catastrophe bond of all time, is set to mature in June, and State Farm is already putting together its replacement, the creatively named Merna Re II. The successor, planned for issuance in April, is said to be for $400 million in risk capital, though investor demand could push it as high as $700 million. This still pales in comparison to the $1.2 billion that the original brought in the door.

If State Farm is able to stimulate demand for Merna Re II, which would protect the company from non-California earthquake risk in the U.S., it will be third cat bond to come to market in 2010, which is expected to be a strong year for this form of risk transfer. The cat bond market fell silent after the near-collapse of American International Group (AIG) in September 2008 but was still the third busiest in terms of capital issued in the history of the cat bond market. Heading into 2009, prospects for the cat bond space seemed uncertain, but a robust fourth quarter eventually resulted in a year-over-year increase, driven mostly by repeat issuers.

Not even two months into 2010, the number of banks closed this year has already reached 20, not far behind the full-year result of 25 in 2008 and ahead of the three in 2007. On Friday, four banks were shut down by regulators, carrying forward the momentum from 2009's 140 bank failures. In only one week, the number of bank failures this year spiked 25%.

La Jolla Bank FSB in California was taken over by the Federal Deposit Insurance Corp. It had 10 branches, $3.6 billion in assets and $2.8 billion in deposits. Its deposits and assets were taken over by OneWest Bank in Pasadena in a deal that is expected to cost the insurance fund $882.3 million. OneWest and the FDIC will share the losses on failed bank loans and other assets of approximately $3.3 billion.

There's been some comparison in the popular press between Greece's serious fiscal condition, and the State of California's. Well, while both are running budget deficits, the similarities stop there.

Greece's fiscal situation is far more serious. Greece's budget deficit as a percent of GDP is roughly 12.7%. California's is about 7%, based on the state's 2008 GDP.

We're all pretty happy to put 2009 behind us, especially those who submitted the 1.4 million bankruptcy petitions last year, making it the seventh-worst on record.

Data gathered by the Associated Press from the 90 bankruptcy districts in the U.S. shows that filings surged 32% from 2008, with 116,000 bankruptcies in December alone. The 22% jump last month, though substantial, was at least below the annual average. That said, the holiday season may have chewed up time that people would use to file, so the apparent reprieve (if you can call a 22% increase in bankruptcies a reprieve) may not be real.

California update: Gov. Arnold Schwarzenegger (R-Calif.) is expected to ask President Obama to ease federal mandates and minimums on social programs to save the state up to $8 billion.

The action is needed because California, which has already cut programs to eliminate previous budget deficits, faces up to a $21 billion budget deficit for this fiscal year, Bloomberg News reported Thursday.

If you still doubt that the next bubble will be green, check out the latest from California. Green and clean technology gigs surged 36% from 1995 to 2008, beating the state's overall 13% job-growth rate for the same period, according to Silicon Valley-based research firm Collaborative Economics. Since California's on the leading edge of this sector, many see it as a sign of things to come for the rest of the country.

As of January 2008, there were only 159,000 green jobs in California, less than 1% of the state's total, following year-over-year growth of 5%. But, during that same period, total jobs in the state dropped 1%, suggesting that jobs in sustainability just might be more sustainable. Though these may seem like small numbers, keep in mind that the green sector job market is twice the size of the state's biotech presence and two-thirds the size of the software industry.

Google, Inc. (GOOG) is one of the tech leaders when it comes to operating one of the largest technology companies on the planet while at the same time being one of the greenest companies, ecologically speaking.

So, it comes as no surprise that the company and its home state, California, are teaming up to try and raise awareness of climate change using Google Earth as the teaching medium.

Insurance companies have $12 billion in indirect investments related to Iran, according to California Insurance Commissioner Steve Poizner -- and he wants them to stop. He's pushing insurers in his state to divest, and the perspective is gaining popularity: his counterpart in Florida thinks the policy should go national.

Kevin McCarty, commissioner in Florida, said to National Underwriter, "I have consulted with other state insurance commissioners to evaluate the practicality of developing a national initiative similar to the undertaking by the California Department of Insurance." He's already contacted the National Association of Insurance Commissioners' Securities Valuation Office to figure out "the feasibility of leveraging national resources to review the financial statements of national insurers to determine their exposure to companies with operations in Iran."

Existing homes are starting to move again. Last month, home resales hit their highest level in more than two years, thrashing expectations. The 9.4% increase in home resales -- which entails a seasonally adjusted rate of 5.57 million -- is attributed largely to the deadline for the first-time home buyer tax credit.

According to the National Association of Realtors, the annualized, seasonally adjusted rate is up from the 5.1 million in August and far ahead of the 5.35 million expected for September (based on economists surveyed by Thomson Reuters).

The clean technology wave just got a little bigger. This tends to be a side-effect of interest from billionaire investor George Soros. And, as usual, it's more than just money; it's more than just a return. Soros, yet again, is trying to save the world. Interestingly, the bold move was announced at a meeting on climate change sponsored by Project Syndicate – an international association consisting of 430 newspapers from 150 countries (and thus with clear ties to the past, rather than future).

The investor and founder of Soros Fund Management LLC is planning to put $1 billion into clean-tech opportunities using what he calls "rather stringent criteria," which involves being "profitable but should also actually make a contribution to solving the problem [i.e., of clean technology adoption and proliferation]." Soros didn't provide any other details on the nature or scope of his investments.

Lincoln, Neb., is the best place in the country for job-hunters. A new survey by headhunting firm Manpower (NYSE: MAN) reports that 21% of employers there plan to add employees in the next quarter, with only 4% looking to cut. That 17% spread (which Manpower calls the "net employment outlook") is tops in the United States.

Flint, Mich., on the other hand, is at the other end of the spectrum: 26% of employers are planning to chop jobs, while only 9% are forecasting new positions.

Last Friday the market reacted favorably (or less negatively) to the latest report from the Labor Department's unemployment figures of 9.7 percent in August, as employers cut 216,000 jobs last month. The percentage is up but the raw numbers are trending down allowing for a sigh of relief on Wall Street with the major indices all up over 1%.

Many would argue that when it comes to the truth, the government is prone to favor aesthetic figures instead of the straight data. I tend to agree with this view as the numbers appear sculpted to be the least offensive.

Deutsche Bank (NYSE: DB) expects almost half of all U.S. homeowners to be underwater -- figuratively, of course -- by 2011.

Declines in home prices and the fact that some of those difficult mortgages just aren't going away put 26% of homeowners in this situation by the end of last March, and it seems the situation is only going to get worse. Unlike the early stages of the credit crisis, which were driven by subprime mortgages, the next iteration will have a greater effect on prime mortgage borrowers, which comprise two-thirds of the loans outstanding.

This was a complex call, but I'm Reiterating my Buy rating for Safeway Inc. (NYSE: SWY) first recommended on February 20, 2009 at a price of $20.90.

Safeway is likely to continue to benefit from rising food demand for cheaper food, as the pronounced recession in California -- one of the states hardest hit by the housing downturn -- compels citizens to belt-tighten and seek less expensive food options. The FY2009/FY2010 EPS estimates for SWY are $2.11 to $2.29.