Today's Headlines

Bloomberg:

• Ireland Discusses Bailout as EU Struggles With Debt Crisis. Ireland was in talks over a financial rescue as European Union leaders battled to shield Portugal from the resurgent debt crisis and doubts surfaced over Greece’s economic health. “We are in a survival crisis,” EU President Herman Van Rompuy said at the European Policy Centre in Brussels today. “If we don’t survive with the euro zone we will not survive with the European Union.”
• Greece Leads Jump in Sovereign Debt Swaps After Austria Says Aid Withheld. Greece led a surge in the cost of insuring European government debt after Austria threatened to block its next transfer of European Union funds because the nation isn’t meeting tax revenue and deficit-cutting targets. Credit-default swaps on Greece soared 86 basis points to 944, the highest since June 29, according to data provider CMA. Contracts on Ireland rose 22 basis points to 515, Portugal climbed 13 to 426, Italy increased 7 to 188 and Spain was up 8 at 259. The Greek budget deficit for last year was revised to 15.4 percent of gross domestic product from 13.6 percent by the EU yesterday, just six months after it agreed a bailout with the EU and International Monetary Fund. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments was 7 basis points higher at 168.
• China Stocks Plunge on Concern Inflation May Spur More Controls. China’s stocks fell, driving the benchmark index to the lowest in a month, on speculation the government will intensify measures to curb accelerating inflation including higher interest rates and price controls. PetroChina Co. and Jiangxi Copper Co. plunged more than 6 percent on concern further tightening will curb oil and metals demand. China Vanke Co. slid to the lowest since September, pacing declines by real-estate developers, after the government ordered first-time foreign homebuyers to show proof they don’t own other properties. China Construction Bank Corp. and Agricultural Bank of China Ltd. dropped more than 2 percent on the prospect higher borrowing costs will cut loan growth. “Speculation that the central bank will tighten monetary policy continues to dog the market,” said Wang Cheng, a strategist at Guotai Junan Securities Co. in Shanghai. “The market will be under pressure for the coming three to 12 months from the threat of measures to cool inflation.” The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, tumbled 119.88, or 4 percent, to 2,894.54 at the close, the lowest since Oct. 14. The index has plunged 8 percent in the biggest loss for a three-day period since Sept. 1 on speculation policymakers may raise rates for the second time in two months to curb gains in consumer prices.
• BofA(BAC) in 'Hand-to-Hand Combat' Over Mortgages, CEO Says. Bank of America Corp. Chief Executive Officer Brian T. Moynihan said resolving investor demands for refunds over faulty mortgages is a battle that will last at least several more quarters. “It’s a day-to-day, hand-to-hand combat,” Moynihan said today during an investor conference held by the lender in New York. “It’s manageable in the context of who we are, but we’re not going to spend your money unwisely.” Moynihan’s comments highlight the tensions between Bank of America, the biggest U.S. lender, and clients who bought its mortgages or bet on securities backed by home loans. The Charlotte, North Carolina-based company faces demands to repurchase almost $13 billion of loans that may have failed to document required data such as income and home values.
• Macau to Tighten Control of City's Casino Industry. Macau Chief Executive Fernando Chui said the Chinese city will tighten control of the number of new casinos, gaming tables and slot machines, Xinhua News Agency said, citing Chui’s annual policy address. Regulators will also enhance supervision of casinos, especially in auditing of financial records, Chui said, as cited by Xinhua. The city will also seek to optimize gaming laws and regulations to stabilize industry development, he said. Macau will exclude casinos from allowed uses for land newly filled in from the sea, instead earmarking it for public housing and industries that will help the economy expand beyond gambling, Chui said.
• An announcement of an Irish rescue package may offer only temporary relief for the euro because investors may turn to other so-called peripheral countries in the single-currency region, according to Barclays Plc.
  
• A surplus of supertankers competing for 2 million-barrel cargoes of Middle East crude oil expanded as this month's bookings were concluded, potentially hindering owners' ability to secure better freight rates. There are 9.5% more very large crude carriers, or VLCCs, for hire over the next 30 days than there are cargoes, according to the median estimate of six shipbrokers and two owners surveyed by Bloomberg News today. A week ago, the excess stood at 7%.
• The Baltic Dry Index, a measure of commodity-shipping costs, fell for a 14th day as rents for grain-hauling vessels dropped the most in two months. The gauge lost 42 points, or 1.9%, to 2,219 points today. The index has declined 20% in the current run to a three-month low. Rents for all vessel classes retreated, led by a 3.4% slide for panamax ships that carry coal and iron ore as well as grains.
• Commodity Speculation Should Be Restricted, EU Commissioner Barnier Says. Michel Barnier, the European Union’s financial services commissioner, said he would seek to limit “risk exposures” derived from “agricultural products.” Commodity speculation “can only lead to further disasters,” Barnier said in a speech in Brussels today. The European Commission, the 27-nation EU’s executive, has targeted excessive market speculation in commodities which it blames for making prices more volatile.
• Copper Futures Drop on Concern China May Take More Steps to Slow Growth. Copper fell to the lowest price in almost two weeks on concern that demand will wane in China, the world’s biggest metals user. Global stocks slumped and the Shanghai Composite Index tumbled to a one-month low amid speculation that China will take steps to rein in inflation and curb growth. Copper has rallied fivefold since 2002 as growth in emerging markets boosted demand for the metal used in buildings and electric grids. “Copper is down again after Chinese equities took another pounding,” Alex Heath, the head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London, said in a report. “The potential for Chinese monetary-policy tightening continued to weigh on investors.” Copper futures for March delivery dropped 11.35 cents, or 2.9 percent, to $3.811 a pound at 10:18 a.m. on the Comex in New York. Earlier, the price touched $3.8005, the lowest level for a most-active contract since Nov. 3.
• Senate's Corker Favors Ending Fed 'Dual Mandate' to Focus on Stable Prices. A Republican member of the Senate Banking Committee called for the Federal Reserve to focus solely on price stability rather than its “dual mandate” to fight inflation and maintain full employment. Tennessee Senator Bob Corker released his statement a day after House Republican Mike Pence introduced legislation to restrict the Fed’s activities to inflation fighting.
• Top-Rated 10-Year Muni Bond Yields Climb to Highest in Four Months. Yields on top-rated tax-exempt bonds due in 10 years climbed to a four-month high as the market absorbed the highest weekly issuance of municipal debt in at least seven years. Ten-year AAA general obligations jumped 0.04 percentage point to 2.67 percent at 11:07 a.m. in New York, the highest since July 9, according to a BVAL municipal benchmark index. States and local governments are selling $16.3 billion in debt this week, the most on record, according to data compiled by Bloomberg dating to 2003. “We’re going to need a bigger boat,” Tony Shields, a principal in the public-finance department at Williams Capital Group in New York, said in an e-mail. “New supply is close to unmanageable.”

CNBC:

• Government Employees Owe Billions in Delinquent Taxes. Deficit cutters struggling to make ends meet in Washington are eyeballing an unusual pot of potential revenue: back taxes owed to the government by federal employees themselves. According to an IRS study last year, those employees and federal retirees owed a staggering $3.3 billion dollars in delinquent tax payments to the government.
• China Behind Chilling Drop in Commodity Prices.
• Tepper Sold Financials as He Gave His 'Everything Will Go Up' Speech.
• FHA Auditors Predict Further Home Price Declines.
  

Business Insider:

• Commercial Real Estate: The Slow-Motion Cliff Dive Gathers Speed.
• The 60-Second Guild to What Hedge Funds are Buying and Selling Right Now.
• Here's That Hilarious Video Explaining The Absurdities of Quantitative Easing. (video)
• 10 Charts That Every Internet Exec Must See Right Now.
  

MarketWatch.com:

• Global Fund Managers at Most Bullish Since April.

New York Times:

• As Payouts Rise, New Tactics by the U.S. Pension Insurer. Even though the government pension agency made sharply higher payments to retirees of bankrupt companies last year, it is using new legal tools to make hobbled companies carry more of the burden and protect itself. The Pension Benefit Guaranty Corporation, which insures corporate pension plans, disclosed on Monday that it paid about $5.6 billion to retirees in its last fiscal year, about 22 percent more than in 2009. The number of retirees it pays each month rose to more than 800,000, as 172 more pension plans collapsed, including those at Crucible Materials, Fraser Papers, Hartmarx and Saint Vincent Catholic Medical Centers.
• Europe Fears That Debt Crisis Is Ready to Spread. European officials, increasingly concerned that the Continent’s debt crisis will spread, are warning that any new rescue plans may need to cover Portugal as well as Ireland to contain the problem they tried to resolve six months ago.

Boston Globe:

• Massachusetts Foreclosures About 1 Home an Hour.

American Thinker:

• George Soros's Next Target: Your State.

Politico:

• Charles Rangel Guilty on 11 Ethics Charges. Rep. Charlie Rangel (D-N.Y.) has been found guilty on 11 ethics charges, ending a two-year investigation into his personal finances. A special eight-member panel of the House ethics committee, after deliberating for roughly six hours, found that there was "clear and convincing evidence" that Rangel had violated House ethics on 11 of the 13 charges he faced heading into a rare public ethics trial.

Reuters:

• Groups Urge US Senate to Pass China Currency Bill. A coalition of U.S. steel manufacturers and other business groups urged the Senate on Tuesday to pass legislation in coming weeks to pressure China to raise the value of its currency.

Kathimerini:

• Greece's government will make final decisions on additional measures for 2011 tomorrow as this year's deficit will be 9.4% of GDP following Eurostat's revision of 2009 data. The extra measures may amount to 4 billion euros. The Finance Ministry has suggested spending cuts of 2 billion euros at hospitals and pension funds, as much as 600 million euros at state organizations, 500 million euros in other operating costs and 500 million euros from improved tax collection and a crackdown on tax evasion.

Caijing:

• China should form a U.S. dollar-denominated bond market to absorb "hot money inflows," citing a report by the Chinese Academy of Social Sciences.

Oriental Morning Post:

• China may resume a 10% consumption tax on vehicles with engines no larger than 1.6 liters next year, citing an executive with an automaker.