The Labor Department Friday morning injected data that some see as a ray of hope. U.S. core consumer prices dropped 0.1% in January. This figure takes food and energy out of the equation, so a full-on bear run may be quelled by the fact that adding food and energy into the equation results in a 0.2% gain.

The core CPI was dragged lower by costs for new vehicles, shelter and airline fares. Last January, core inflation increased 1.6%. But this drop may be just what the market needed after Dell's (DELL) lackluster results and the Federal Reserve's surprise rate hike late Thursday. The lack of inflationary pressures shown as seen by the decline in core CPI could quell some concerns about a possible broader Fed rate hike.

The Bermuda Stock Exchange is looking for a comeback this year. For 2009, the shares traded on the BSX were off close to 40%, reflecting the brutality of the financial crisis on the island known primarily for its insurance business (oh, and people go on vacation there, too ... and not just insurance people). In 2010, the BSX sees catastrophe bonds and other insurance-linked securities as fundamental to a strong year. A BSX statement reads, "The BSX's listing business has remained buoyant and the BSX has made continued progress in entering and supporting the insurance linked security space." With the 2009 Insurance Amendment Act approved last October, Bermuda hopes to lure cat bond listings away from the Cayman Islands Stock Exchange.

Is another round of continent-hopping banks (and bank services) up ahead? Perhaps, if the analysis of Josef Ackermann, CEO of Germany-based Deutsche Bank (DB) is accurate.

Ackermann said Germany has a "comparative advantage" over other financial hubs because it is not expected to tax bonuses as Britain and France have done, Bloomberg News reported Sunday.

Upcoming financial service reforms led by U.S. Rep. Barney Frank, D-Massachusetts and chairman of the House Financial Services Committee, are likely to address, among other concerns, one longstanding flaw in the U.S. financial system -- the 'too big to fail' condition.

Further, while it is appropriate to empower federal monetary officials, such as the U.S. Federal Reserve, and other federal regulators, to set limits on firms -- Citigroup, Inc. (C) or the Bank of America Corporation (BAC), for example -- which are so big or whose situation is so uncertain/unstable that their collapse would jeopardize the U.S. financial system, lawmakers should also write into the legislation the power to modify the business model of other firms: namely, those 'too interconnected to fail.'

According to RealtyTrac, the number of homeowners facing foreclosure dropped during October, thanks in part to foreclosure prevention programs that helped borrowers. RealtyTrac stated that more than 332,000 households (one in every 385 homes) were recipients of either a notice of default or a trustee's sale. This number is 3% lower than September, making October the third-straight month with a drop in the number of homeowners facing foreclosure. As for homes actually repossessed, the number dropped to 77,000 in October from 88,000 in September.

RealtyTrac noted that one reason for the lower number of foreclosures is new state programs that require a bank to try and work with the homeowner before seizing property. In addition, some lenders are staving off foreclosures by evaluating which of their close-to-default borrowers may qualify for the new federal loan modification program.

We've watched stock market numbers bounce around for two years. Unemployment stats have served as unpleasant reminders that, for some, leading indicators haven't translated to reality. We look for so many ways to understand the brutal economic environment with which we've had to contend, and all the choices can make your head spin. So, let's make it simple. Here are eight ways to tack a label onto the financial world in which we live.

1. Lost market value
Total stock market losses from October 2007's top to March 2009's bottom: $11.2 trillion
Total gains in the stock market since the bottom: $4.6 trillion
Lost ground: $6.6 trillion

2. Bad days
Percentage of the 10 worst days in history for the Dow Jones Industrial Average that happened in 2008, by point drops: 60%
Percentage of the 10 worst days in history for the DJIA that happened in 2008, by percentage drops: 30%

3. Mutual funds
Value of mutual fund assets at the end of 2007: $6.5 trillion
... and a year later: $3.7 million
Lost value: $2.8 trillion

But, it got a little better at the end of August 2009: $4.5 trillion (value of assets)

Late Tuesday -- on the one-year anniversary of its bankruptcy filing -- Lehman Brothers accused Barclays Capital (NYSE: BCS) of taking $8.2 billion more than it should have when it purchased some of its key assets a year ago. Less than a week after Lehman filed for bankruptcy, the court approved of the sale to Barclays. Now Lehman is asking a judge to force Barclays to return some of the money taken as part of the deal, including $5 billion it says was given as extra collateral, which was not disclosed to the court.

Interesting timing and an interesting claim, don't you think? The timing is interesting because it is a year after the bankruptcy filing, which sounds like more than just a coincidence. But what is truly interesting is the fact that Lehman is trying to get quite a bit of money back by making a claim that was not disclosed to the court.

With all the focus on unemployment, the usual recession victims have been overlooked a bit. The over-65 crowd, living on fixed incomes, has seen portfolios decimated and those consistent dividends from blue chippers evaporate. At the same time, medical costs are headed in the other direction. Expenses up and income down, seniors have found only one solution: credit cards.

Low- and middle-income consumers who've reached or passed age 65 had $10,235 in credit card debt, on average, last year, up a disturbing 26% from 2005. Meanwhile, credit card debt climbed only 3% across all age groups – to $9,827. From the fourth quarter of last year to the first this year, total revolving debt fell a modest 2.3% to $939.6 billion.

After yesterday's closing bell, Capital One Financial (NYSE: COF) reported a second-quarter loss of 65 cents per share. The quarterly loss included $461.7 million COF repaid to TARP and a $38 million dividend payment. Excluding these payments, COF saw a quarterly profit of 53 cents per share. The Street expected COF to lose 73 cents per share, so the company managed to top expectations. Nevertheless, the company noted that its results were pulled lower by credit card losses along with the repayment of the government funds.

COF managed to make money excluding items, but a loss is still a loss. While the company noted that people have been a bit more defensive in their spending, I'm guessing that this may change. Remember that unemployment is at record highs, which may lead to more people to depend on credit cards (if they have them) to pay for necessities.

AMR Corporation (NYSE: AMR) got spanked in the second quarter, as frequent fliers kept their feet on the ground. The American Airlines parent posted a $390 million loss in a quarter that historically has been kind to travel companies. AMR rationalizes the results with the thought that the loss would have been only $319 million ($1.14 per share) if charges related to selling and grounding planes were excluded. This would have put the airline ahead of analyst expectations of a $1.28 per share loss. AMR's Q2 revenue fell 21% to $4.89 billion.

And, it's far better than the airline's performance in the second quarter of 2008.

According to the National Retail Federation (NRF), the back-to-school shopping period isn't expected to be strong enough to help retailers. During the past five years, this shopping period has increased; but the NRF has forecast a drop of 7.5% to $47.5 billion this year.

This isn't just a slight drop, a 7.5% drop in sales is rather staggering. In fact, roughly half of the shoppers questioned plan on spending less this year when searching for goodies to take back to school. Ken Perkins of Retail Metrics notes that this isn't just a problem for retailers during the upcoming shopping season, weak back-to-school sales is "likely a harbinger of another difficult holiday shopping season."

First of all, let's look at what hedging really is. Take, for example, a farmer who grows corn. He knows that his cost for growing corn is, say, $3.00 per bushel. But he doesn't know what price the price of bushel of corn will be come harvest time. He looks at the September futures contract for corn and sees that the price is $3.30 per bushel.

To guarantee that he will get $3.30 at harvest time, he sells September corn contracts equal to his crop (each corn contract equals 5,000 bushels). When harvest time comes he delivers his corn to the appropriate delivery point designated by the Chicago Board of Trade exchange (CBOT) where the contracts are traded. It should be noted that if the price of the futures contract goes above $3.30 per bushel, the farmer may be called for margin money until he makes delivery, at which time his account is settled out.

There are two competing positions on consumer sentiment right now. One is that it turned south last week, as people worried about their jobs – always a bad sign for spending. The other is that consumer sentiment didn't crap out in July: it fizzled in May. So, it's not a question of whether consumers aren't confident in the U.S. economic machine, it's just a matter of when the collective mood changed.

The July camp is set up around the Reuters/University of Michigan Surveys of Consumers, which makes now the weakest point for consumer sentiment since March. Those who favor May look to domestic demand for foreign goods, which went soft two months ago, bringing the monthly trade deficit to its narrowest since 1999. The U.S. trade gap unexpectedly tightened to $26 billion in May, with exports up 1.6% and imports down 0.6%, according to the U.S. Department of Commerce.

This morning, Citigroup (NYSE: C) began its $58-billion stock swap, a move that could leave the government with a 34% stake in the bank. The country's third-largest bank plans to swap common stock for (up to) $33 billion in preferred shares and convert as much as $25 billion of preferred shares held by the U.S. Treasury into common stock.

The bank believes that the swap could (emphasis on could here) make Citigroup one of the world's best-capitalized banks. The action could add up to $61 billion of tangible common equity and $64 billion of Tier-1 common equity. Citigroup had planned to take this action back in April.

TheStreet.com's Jim Cramer says it's not too much to ask that banks have enough money to loan to customers and to pay back TARP.

Bankers who complain about having to raise more money to pay back the Troubled Asset Relief Program ought to be real careful here about their insistence that the rules have been changed.

Never did Treasury say, "If you raise this money, you can pay TARP back." What it did say was, "If you raise this money, you can stay in business."

Given that most of the banks that raised the $85 billion probably could have gone by the wayside, I don't think there's all that much to be said about the government demanding that the banks have enough money on hand to loan to customers and to pay back TARP. Is that really too high a price to pay?