Today's Headlines

Bloomberg:

• Egypt Will Allow Iran to Send Two Naval Warships Through Suez on Way to Syria. Egypt approved a request from Iran to send two naval ships through the Suez Canal on their way to Syria, a move that has ratcheted up Middle East tensions and driven oil prices higher as Israel calls it a “provocation.” The U.S. is “monitoring” Iran’s plan to send warships through the Suez Canal, White House press secretary Jay Carney said today. Iran doesn’t show “responsible behavior in the region, which is always a concern to us,” Carney told reporters traveling on Air Force One to an appearance by President Barack Obama in Portland, Oregon.
• Saudi Prince Says Protests May Move to Kingdom, BBC Arabic Says. A member of Saudi Arabia’s royal family warned that the Arab world’s largest economy may see protests unless King Abdullah Bin Abdul Aziz introduces reforms, according to BBC Arabic TV. Prince Talal Bin Abdul Aziz told the London-based broadcaster in an interview aired last night that “unless problems facing Saudi Arabia are solved, what happened and is still happening in some Arab countries, including Bahrain, could spread to Saudi Arabia, even worse.” Necessary reforms include developing the Shoura Council and implementing human and women’s rights, BBC Arabic reported on its website, citing Prince Talal. King Abdullah is the only member of the ruling family who believes in such reforms and is able to carry them out, according to the prince. Prince Talal also supported turning Saudi Arabia into a constitutional monarchy, the BBC added.
• Saudi Arabia Default Swaps Jump on Bahrain Contagion Concerns. Credit-default swaps on Saudi Arabia surged on concern political unrest in neighboring Bahrain will spread to the world’s biggest oil exporter. Swaps on Saudi Arabia, used as a measure of confidence in the country although they reference no debt, jumped 11.5 basis points to 138, the highest since July 2009, according to CMA. Contracts on Bahrain rose for a fifth day, climbing 21 basis points to 307, the highest in 19 months. Tension is building throughout the Middle East. Credit- default swaps on Dubai increased 13 to 436, Abu Dhabi was up 6 at 107 and Qatar rose 3 basis points to 105, all the highest since Jan. 31. Egypt increased 5 basis points to 355 and Israel was up 5 at 152, the highest since July 2009.
• China Raises Bank Reserve Ratios to Counter Inflation. raised reserve requirements for lenders 10 days after boosting interest rates as Premier China’s central bankWen Jiabao tackles accelerating inflation and the risk of asset bubbles. Reserve ratios will increase half a percentage point starting Feb. 24, the People’s Bank of China said on its website today in a one-sentence statement. Central bank Governor Zhou Xiaochuan said policy makers may also use means “including rates and currency” to tackle inflation, in an interview in Paris after the reserve-ratio announcement. “China has a profound liquidity and inflation problem that is, even with this latest tightening, getting further ahead of policy makers,” said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong. “This is just the start from China and they will continuing tightening lending and raising interest rates, doing their utmost to contain this,” saidPhilippe Gijsels, the Brussels-based head of research at BNP Paribas Fortis Global Markets. “If the Chinese start to take out the liquidity that’s been so important, it’s got the potential to be a disturbance for the world’s stock markets.” In Paris, Zhou said raising reserve requirements is just one way to fight inflation. “We can’t really say that it’s the only method that we’ll use to battle inflation, it’s about using all means including rates and currency,” he said. “One method doesn’t exclude the other,” said Zhou, who’s attending a gathering of Group of 20 finance ministers and central bankers. Inflationary pressure “is still building up and it has become chronic for the medium term,” Shen Jianguang, a Hong Kong-based economist with Mizuho Securities Asia Ltd, said in a note on Feb. 15, citing rising labor and raw-material costs.
• Treasury Bill Rates Close to Eight-Month Lows as Unrest Spurs Haven Demand. Three-month Treasury bill rates are close to the lowest levels in eight months as unrest in the Middle East bolsters the refuge appeal of the securities while investors ponder the direction of longer-maturity debt yields. The rate on U.S. government debt maturing in three months traded at 0.0862 percent after slipping to 0.0821 percent yesterday, the lowest level since June 17. One-month bill rates were little changed at 0.0659 percent. “Anytime there is civil unrest anywhere people will flock to Treasury bills,” said Michael Franzese, head of Treasury trading at Wunderlich Securities Inc. in New York. “Also investors feel they can wait out in bills the uncertainty with regard to what is going on with Federal Reserve monetary policy and the direction of long-term Treasury yields.”
• Citigroup(C) Given Havens, Three Executives $11.9 Million of Incentive Awards. Citigroup Inc., the third-largest U.S. bank by assets, gave four top executives a total of $11.9 million in profit-sharing awards payable beginning in 2013.

Wall Street Journal:

• A Have and Have-Not Venture World. Top venture-capital firms including Accel Partners and Kleiner Perkins Caufield & Byers are riding the frenzy around companies like Facebook Inc. and Groupon Inc. to raise billions of dollars in new funds, even as the rest of the venture industry struggles to gather money. The new funds stand out in what is a bleak environment for most venture firms. Hit by the financial crisis and poor returns over the past decade, just 119 new venture funds were raised in the U.S. last year, totaling $11.6 billion in assets, according to research firm VentureSource.
• Human-Rights Groups Says Dozens Have Died in Libya. Human-rights and opposition groups monitoring clashes in Libya said the army has deployed to the restive, eastern city of Benghazi, while security services and regime supporters have killed dozens of protesters in recent clashes, as unrest in the oil-rich North African country escalates. U.S.-based Human Rights Watch, citing multiple witnesses, Friday said at least 24 people have died in attacks on peaceful protesters across the country. Other expatriate Libyan groups say deaths exceed 50.
• Iran Upgrades Nuclear Technology. Iran is redoubling its efforts to enrich uranium by upgrading the equipment at its nuclear facilities, after its enrichment program was severely disrupted by a computer virus, according to diplomats familiar with a new assessment by the International Atomic Energy Agency. The IAEA, the United Nations' nuclear watchdog, believes that Iran is seeking to replace thousands of centrifuges it has been using to enrich uranium with more modern, carbon-fiber centrifuges that can enrich nuclear fuel at about five times the speed of Iran's previous equipment, these diplomats say.
• Wisconsin Senate Fails to Vote on Union Law. The Wisconsin Senate failed to muster enough members to vote for a second day Friday, holding up legislation that would strip state workers of most collective-bargaining rights and prompting Republicans to criticize their absent Democratic colleagues. Republican Senate Majority Leader Scott Fitzgerald said in a press conference after the brief session that he had asked state troopers to go to Democratic Minority Leader Mark Miller's home because he understands he is there. "I'm starting to hold Sen. Miller responsible for this," Mr. Fitzgerald said. Mr. Miller later told CNN that he was out of state, not at his home in Wisconsin.
• House GOP Pushes to Derail Health Law. House Republicans pushed Friday to derail the Obama administration's health-care overhaul, preparing to bar the federal government from spending money on the plan. Rep. Denny Rehberg (R., Mont.) put the ban in an amendment to a budget bill funding the federal government through the remaining months of fiscal 2011. "We wanted to create jobs. You wasted time on the health-care reform," Mr. Rehberg said on the House floor, addressing Democrats. A vote on the amendment by the Republican-led House was expected later Friday.

MarketWatch:

• Bernanke Defends QE2 on Global Stage. Fed is not cause of destabilizing capital flows, he says.
• Morgan Stanley(MS) Lays Out China Doomsday Scenario. Clients ask: What if Chinese economy suffers a hard landing?

CNBC.com:

• Rivals Consider Hostile Bid for NYSE(NYX).

Business Insider:

• The Battle of Madison, Wisconsin. Walter Mead, one of the shrewdest political commentators on the web, looks at what is happening in Madison, Wisconsin (and elsewhere) and argues that the foundations of what he calls "the blue social model" are crumbling before our eyes. Mead writes:
• The Bahrain Army Just Started Firing Machine Guns Right Into The Protesters.
• Check Out Live Photos of Nissan's New All-Electric Tesla(TSLA) Killer.
• Is This The Resort Where The Wisconsin Dems Are Hiding? (pics)
• Left and Right, The Soft Commodity Bubble is Popping.
  

Zero Hedge:

• Libyan Protesters Hang Two Policeman in Al Baida, As Sermons Urge Locals to Ignore "Imperialist, Zionist" Attempts to Stir Revolution.

AppleInsider:

• Apple(AAPL) CEO Steve Jobs Photographed at Dinner With President.

The Hill:

• Obama Administration Asks Judge to Tell The States That Healthcare Law Isn't Optional. The Obama administration is asking a federal judge who struck down the healthcare reform law to clarify that states must still implement the overhaul as the appeals process plays out. Some states are saying the Jan. 31 ruling relieves them from implementing the sweeping reform law because the federal judge in Florida found it to be unconstitutional. The Obama administration, in a Thursday evening filing in a Northern Florida federal court, is asking the court to clarify that the 26 states who successfully challenged the law are still required to comply with it.

Reuters:

• JPMorgan(JPM) Says Lehman Called Assets "Goat Poo". Lehman Brothers and Barclays deceived JPMorgan Chase & Co with bad assets that the failed investment bank's own employees dubbed "goat poo," according to new court papers that escalate a legal battle between the financial firms. JPMorgan filed new court claims in the case, contending that Lehman left it with $25 billion in unpaid loans secured by undesirable assets like those left out of the sale to Barclays.
• 'Flash Crash' Panel Calls for US Market Overhaul. U.S. regulators should stem the growing tide of anonymous stock-trading and consider charging high-frequency traders for their disproportionate amount of buy and sell orders, said a panel of experts advising how to avoid another "flash crash." The panel's 14 recommendations for U.S. securities and futures regulators contained some bold ideas that, taken together, would overhaul the high-speed electronic trading market. The advisers on Friday told regulators that today's markets can easily breed uncertainty among investors, and asked them to move urgently on the suggestions.
• Developed Market Equities Shine Again - EPFR. Investors pushed further into developed market equities in the week ended Feb. 16, focusing on the brightening prospects for economic growth and robust corporate earnings, data-trader EPFR Global said on Friday. "Investors are, for the first time since 2007, seeing more opportunity in developed market equities than in emerging markets," Brad Durham, EPFR Global managing director said in a statement. Overall, equity funds posted collective inflows of $8.39 billion compared with $1.16 billion for bond funds. Money market funds recorded outflows of $3.73 billion for the week, EPFR said. Emerging market equity funds had net outflows of $5.45 billion in the latest week for the fourth consecutive reporting period, while emerging-market debt funds had their worst week since late in the fourth quarter of 2008. According to EPFR's data, investors have put a net $47 billion, year-to-date, into developed market equity funds. That contrasts with the net redemptions in the same periods of $28 billion in 2009 and $17 billion in 2010. U.S. equity funds have inflows so far in 2011 above $29 billion, "with retail investors committing fresh money for the seventh week in a row."

Financial Times:

• ECB Buys Portuguese Debt as Yields Soar.

WirtschaftsBlatt:

• Commodity speculators and not market demand is behind the rising price of food, Poland's Agricultural Minister Marek Sawicki said in an interview. Current price developments don't accurately reflect what is happening in agricultural markets, Sawicki said.