Today's Headlines

Bloomberg:

• Europe Welcomes Greek Vote; Bailout Nears. Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days. The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. “I’m confident that the other conditions, including for instance the identification of the concrete measures of 325 million euros ($430 million), will be completed by the next meeting” of finance ministers. Euro-area finance chiefs will convene in Brussels on Feb. 15 for their second extraordinary meeting on Greece in a week. Frustrated after two years of missed budget targets, ministers declined to ratify the 130 billion-euro package in a special session on Feb. 9, demanding that Greek officials put their verbal commitments into law. “It’s important for now to complete this program -- and the passage in the Greek parliament yesterday was very important,” German Chancellor Angela Merkel said in Berlin. “The finance ministers will meet again on Wednesday to undertake the work on this, but there can’t and the won’t be any changes to the program.”
• EU Vows to Keep Airline-Emission Levies as China-India Opposition Mounts. The European Union will press ahead with emissions levies for international airlines, putting the bloc on course for a trade spat with countries including China, India and the U.S. “The EU will not suspend the legislation,” Siim Kallas, the European Commission’s vice president for transport, said today in Singapore at an airline conference. “It’s a very high- profile environmental issue.”
• Toronto Condo Bubble Risk Topping New York. A sliver of land wedged between Toronto’s elevated expressway and an off-ramp that pumps traffic into downtown may become the epicenter for a Canadian housing bubble. In four years, this site that’s now used as a parking lot and police impound near the shores of Lake Ontario will be home to Ten York, a 75-story glass building that would be the country’s third-tallest condo tower. Toronto has more skyscrapers and high-rises under construction than any North American city -- almost three times as many as New York -- stoking debate on whether the condominium market in Canada’s largest city is headed for a U.S.-style correction as prices rise and household borrowing hits a record. Canadian lenders including Toronto-Dominion Bank last week raised mortgage rates to cool off the housing market. “Condo construction has always been rather prone to boom and bust cycles, and this one seems particularly strong,” said Sheryl King, an economist with Bank of America Merrill Lynch in Toronto. “Builders seem to overestimate how much demand is going to be out there, and that’s when you tend to see some abrupt pull-back.” Canada’s housing market is about 10 percent overvalued, with inflated prices primarily in Vancouver, Montreal and Toronto, King said in a telephone interview. “We would call it a bubble,” she said.
• Apple(AAPL) Says Fair Labor Association Began Foxconn Inspections. Apple Inc. (AAPL) said the Fair Labor Association started audits of supplier Foxconn Technology Group (FOXCGZ)’s factories in China, the first inspections of a larger effort to respond to criticism of conditions of workers making its gadgets. The iPhone maker, which became the first technology company to join Washington-based FLA in January, said labor-rights inspectors started today at a Shenzhen, China, plant known as Foxconn City, Apple said today in a statement.
• Obama Budget Proves Unique Source for $3 Trillion. President Barack Obama’s budget outlines his ideas for how the government may spend $3.8 trillion in fiscal 2013. There’s no similar document accounting for where taxpayers’ money actually goes. At least three federal sources tally spending, each following its own rules to produce a different total. For the 15 Cabinet-level agencies and Social Security, the White House Office of Management and Budget put expenses at $3.18 trillion in fiscal 2010, the last year for which data are complete. Ask the Census Bureau, and the amount rises by $13.1 billion to $3.19 trillion. USASpending.gov, a website Obama championed as a senator, accounts for $2.23 trillion of spending. (For an interactive graphic, click here.) The nation’s budget has more than doubled in the past decade, pushing the annual deficit to more than $1 trillion and the national debt to $15.2 trillion.
• Pentagon May Oust Troops Involuntarily Under Budget Cuts. The Defense Department may have to force soldiers, Marines or other members of the military out of the services for the first time since the aftermath of the Cold War to achieve the spending reductions in its budget proposal. The Pentagon plans to cut 67,100 soldiers from active and reserve Army units and the Army National Guard in the five years starting Oct. 1, as well as 15,200 from the active and reserve ranks of the Marine Corps.
• Oil Advances as Greek Approval of Austerity Bolsters Economic Optimism. Crude oil for March delivery increased $1.61, or 1.6 percent, to $100.28 a barrel at 1:10 p.m. on the New York Mercantile Exchange. Futures are up 17 percent from a year ago. Brent oil for March settlement rose 65 cents, or 0.6 percent, to $117.96 a barrel on the London-based ICE Futures Europe exchange.
• U.S. Farm Income May Fall on Bigger Crops, Increased Expenses. U.S. farm net income probably will fall 6.5 percent in 2012 from last year’s record as the biggest crop acreage in a generation and rising costs trim profits, the Department of Agriculture said. Income will total $91.7 billion, down from a revised $98.1 billion in 2011 and the second-highest ever, the USDA said today in a report. The value of crops will rise 3.1 percent to $204.9 billion, while revenue from livestock sales will increase 0.6 percent to $165.7 billion, the USDA said. Expenses such as diesel fuel and animal feed will increase 3.7 percent to $235.1 billion, eroding profits.

Wall Street Journal:

• Fed Watchers See Risks in Rate Plan. Many economists believe the Federal Reserve risks making a big mistake if it sticks to its recent guidance about keeping interest rates super low for the next three years. The Fed said last month that it expected to keep short-term interest rates near zero until at least late 2014 to bolster the slow recovery. Among 49 economists who participated in the latest monthly Wall Street Journal survey, the vast majority—33 respondents—said moving to raise rates then would be too late. Just three said it would be too soon, 11 said it would be right on time and two didn't answer.
• 'Co-Co' Debt Finds Favor in Euro Zone. Spanish, Portuguese Governments See Debt as Tool to Aid Lenders, Without Direct Bailouts. A new breed of bank debt that turns into equity if a lender hits trouble is becoming the instrument of choice for some Southern European governments as they prop up their ailing banks. The instruments, known as "contingent convertibles," began to get attention following the financial crisis and have been issued by a few banks. "Co-cos," as they are called, are sold as interest-bearing debt that has to be paid back. But they convert to equity in the event that a bank's capital ratios fall below certain levels.
• DBJ Chief Says Japan Needs Consumption Tax Hike.
  

MarketWatch:

• Regeneron(REGN) Loss Widens But Sales Forecast Raised. Regeneron Pharmaceuticals Inc. REGN +12.87% said sales of its new eye-disease treatment were off to a fast start, causing the company to boost its 2012 sales forecast for the drug by roughly 80%.
• Volcker, Others Clash On Speculative Trading Rule.
• Death Tolls Passes 600 in Europe Cold Snap.
  

CNBC.com:

• Greece Still to Convince Skeptical Euro Zone. Europe gave Greece until Wednesday to convince skeptical international creditors that it would stick to the punishing terms of a multi-billion-euro rescue package, endorsed by parliament as rioters torched downtown Athens.
  
• A Secretive Hedge Fund Legend Prepares to Surface. It’s a humbling time for Louis Moore Bacon. The 55-year-old founder of the $15 billion Moore Capital Management — and one of the premier hedge fund investors of the past two decades — just weathered his second down year in the past four after a particularly ragged run in the markets.

Business Insider:

• The Most Overpriced Housing Markets In The Developed World.
• Check Out The New Tax Hikes In Obama's Budget. Even for people making less than Warren Buffet. The Obama Budget is going to mean tax-increases. Notice how he can't just call them tax and revenue increases, they are "American Values" about "fairness." You see, even budget documents are campaign documents:
• Chinese Authorities Are Removing iPads From Store Shelves.
• Israeli Embassies Attacked in Three Countries, Netanyahu Blames Iran.
  

Zero Hedge:

• Athens - The Morning After: 48 Buildings On Fire, 150 Looted, Hundreds Arrested.
• Samaras Pledges To "Renegotiate" Bailout Pact After April Elections.
• LTRO Stigma Becomes Acute Days Ahead Of Second Operation. (graph)
• European Financials At Worst Levels In Two Weeks. (graphs)
  

New York Times:

• Chinese Official Brushes Aside Calls to Buy European Debt. The head of China’s $410 billion sovereign wealth fund has brushed aside a call by the German chancellor, Angela Merkel, to buy European government debt, saying Monday that such investments were “difficult” for long-term investors. “For European bonds like the government bonds of Italy and Spain, only central banks with certain responsibilities can invest,” he said. But it was more “difficult for long-term investors like us” to make such investments, he said at the annual meeting of China Economists 50 Forum, a club of government officials and economists. Xia Bin, an adviser to the Chinese central bank, echoed Mr. Lou’s harder line on buying European government debt. “We may be poor, but we aren’t stupid,” Mr. Xia said on the sideline of the forum. “We must follow commercial principles in making such investments. That means we want returns.” Mr. Lou, who predicted that Europe would “inevitably” fall into recession, said Mrs. Merkel had asked the sovereign fund to look at French and German government debt.

Forbes:

• Greek Optimism Severely Misplaced: Huge Risk of Political Failure.

MortgageOrb:

• Fitch: Office and Retail CMBS Delinquencies Hit New Highs. Delinquencies for office and retail loans have hit their highest-ever levels while overall U.S. commercial mortgage-backed securities (CMBS) delinquencies fell for the sixth straight month, according to the latest index results from Fitch Ratings. CMBS late-pays declined five basis points (bps) in January to 8.32% from 8.37% a month earlier. The improvement was driven by multifamily loans, which saw a 165-bp plunge in their rate month-over-month to 12.77%. The delinquency rates for office and retail rose to all-time highs of 7.30% and 7.21%, respectively. January marked the first time post-recession that the office delinquency rate surpassed that of retail.

Seeking Alpha:

• 7 Rallying Semi Stocks Hedge Funds Are Buying Up.

TheStreet.com:

• Bank of America(BAC), Citigroup(C) Face Debt Downgrade: Moody's. Moody's Investors Service is expected to announce downgrades to large global banks that play an outsized role in the capital markets, due to "Eurozone weakness and elevated economic and market uncertainties," according to a research report published Monday by CreditSights.

Reuters:

• Copper Falls as Euro Trims Gains, Demand Concerns Weigh.
• Obama Seeks Big Hike Is Dividend Taxes On Wealthy. President Barack Obama's 2013 budget plan calls for significantly hiking taxes on dividends for the wealthy, a change from prior proposals that will raise the ire of dividend-paying companies. Obama's proposal, released on Monday, would raise the taxes investors pay on dividends to the top income tax rate, now at 35 percent, but scheduled to rise to near 40 percent next year. In prior proposals, Obama sought to raise the current 15 percent dividend tax rate to 20 percent for the wealthiest Americans.
• Obama Unveils Big Spending Election-Year Budget. President Barack Obama called on Monday for aggressive spending to boost growth and for higher taxes on the rich, laying out an election-year vision for America in a budget that was criticized sharply by Republicans for failing to curb the deficit.

Telegraph:

• Debt Crisis and Greek Bailout: Live. German leader Angela Merkel states that there won’t be any changes to Greek rescue measures despite riots in the debt-stricken country, as Barack Obama unveils his Budget for 2013.

Der Spiegel:

• European Doubts Growing Over Greece Debt Strategy. 'The Troika's Policies Have Failed'.