While the latter days of the Bush administration have seen a seismic shift with respect to governmental intervention, the actions taken have been characterized as being too little, too late and lacking in conviction and direction.

It remains to be seen whether the new administration will be equally perplexed as to the scope of the role of the federal government and the manner in which it is to be implemented.

This past week presented no exception to the confusion that prevails. The only consensus which has emerged was confirmed with the economic news of the week. Reports across the board removed any doubt that the U.S. economy is in the throes of a deep recession which is likely to get worse before it gets better.

The tools available to those who favor wholesale governmental intervention are diminishing. Credit continues to be scarce, even for the most credit-worthy, jobs are hard to come by and are now becoming more difficult to keep and businesses and consumers are exercising unprecedented restraint in the purchase of equipment, goods and services.

Among the rare pieces of positive credit market news of this past week was the first significant upward spike in the issuance of corporate debt. Companies issued $41 billion in new corporate bonds during the week, the largest volume in 8 months. The spread to treasuries for investment grade corporate narrowed to 567 basis points, the lowest since October 15, but still high by historical measures. Optimists also pointed to the TED spread, which is the difference between what banks and the Treasury pay to borrow money for three months. The TED this last week narrowed to 1.2% indicating a willingness of banks to lend.

The news late in the week on the job market dampened any spark of enthusiasm emanating from the pick-up in activity on the corporate bond front. Equity markets gave up the gains of Thursday and the debt markets pushed benchmark treasuries yields to their lows for the week on Friday. Off to the worst start since 1981, treasuries have dropped in yield by 1.1% for the first 9 days of the year.

Significant economic releases for the week included:

• Construction Spending (-0.6%)
• Factory Orders (-4.6%)
• Initial Jobless Claims (467K)
• Consumer Credit (-7.9 billion)
• Rate of Unemployment (7.2%)

Reports to be released this coming week include:

• Retail Sales (expected to be down 1.1%)
• PPI (projected to be down 1.9%)
• CPI (-1%)
• Capacity Utilization (-0.8%)

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com. James F. Dlugosch contributed to this article.