Today's Headlines

Bloomberg:

• Soaring Target2 Imbalances Stoke German Risk Angst: Euro Credit. German angst is growing as an entry on the Bundesbank’s balance sheet swells to a sum worth about 20 percent of economic output, a sign of the extent to which Europe’s largest economy is funding the region’s laggards. The European Central Bank’s Target2 system, which calculates debts between the euro region’s central banks, shows the Bundesbank is owed 489 billion euros ($656 billion), up almost 65 percent from a year earlier. German central bank President Jens Weidmann wrote to ECB President Mario Draghi last month to warn about growing systemic risks, Frankfurter Allgemeine Zeitung newspaper reported Feb. 29. “The Germans are very much justified in their concern,” said John Whittaker, an economist at Lancaster University Management School, who drew attention to the growing imbalances in papers published last year. “The Target2 liabilities are just as risky and just as real as holding the government bonds of Greece and other peripherals.”
  
• Greek Yield Curve Inverted on Bets Debt Control Effort Will Fail. Greece's bonds due in 2023 yield more than securities maturing in 2042 following a restructuring of the nation's debt, showing investors remain concerned the government will fail to control its finances. Yields on shorter-dated bonds climbed more than those on longer-term debt in the first full day of trading of the new securities today, inverting the so-called yield curve. Bondholders last week agreed to write off more than 100 billion euros ($130.6 billion) on their investments as Greece struggled to meet its target of cutting outstanding obligations to about 120 percent of gross domestic product by 2020, from 160 percent last year. "Greece still has problems, in spite of the debt swap and restructuring," said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. "It needs to meet its targets. Debt sustainability remains a key concern, and that's reflected in the prices and the shape of the yield curve."
• Paulson's Lacoursiere Said to Leave to Start Own Hedge Fund. Robert Lacoursiere, the Paulson & Co. partner who oversaw the $23 billion hedge fund’s financial investing, quit after four years to start his own fund, according to a person with knowledge of the matter. Lacoursiere, 49, plans to start an equity hedge fund within six months that will focus on financial companies, said the person, who asked not to be identified because the information is private. Founded by billionaire John Paulson, the firm suffered record losses last year as his bet on a U.S. recovery went awry. The hedge fund last quarter sold entire stakes in Citigroup Inc. and Bank of America Corp., which it had built up in 2009 as part of that wager, before the shares rallied this year.
• Crude Rises as Retail Sales and Equities Gain, Signaling Economic Growth. Oil for April delivery rose 80 cents, or 0.8 percent, to $107.14 a barrel at 12:17 p.m. on the New York Mercantile Exchange. The price is up 8.4 percent this year. Brent crude for April settlement on the London-based ICE Futures Europe exchange gained $1.11, or 0.9 percent, to $126.45 a barrel.
• U.S. Insider Stock Sales Turn Less Favorable: Technical Analysis. The number of insider sellers averaged about 43 a day in the 30 days through March 5, the highest level since at least 2004, according to Bloomberg data for S&P 500 companies. The last two peaks of insider selling, in March 2010 and March 2011, both came before market tops the next month.
• Syria Mines Borders With Turkey, Lebanon as Thousands Flee Assad's Forces. Syrian forces are sowing minefields along the border with Turkey and Lebanon even as thousands of refugees flee a widening crackdown by President Bashar al- Assad’s military. The landmines are already causing civilian casualties, Human Rights Watch said today in a statement on its website.
• Retail Sales in U.S. Rose in February by Most in Five Months. The 1.1 percent advance followed a 0.6 percent increase in January that was larger than previously estimated, according to Commerce Department data issued today in Washington. Sales rose in 11 of 13 categories, including auto dealers and clothing stores, showing gains in demand were broad based.
• Business Inventories in U.S. Expand More Than Forecast on Auto Stockpiles. Businesses in the U.S. increased inventories in January at a faster pace than projected, led by the biggest jump in automobile stockpiles in more than a year. The 0.7 percent rise followed a revised 0.6 percent advance the prior month that was larger than previously reported, Commerce Department data showed today in Washington. The median projection in a Bloomberg News survey called for a 0.5 percent gain. Sales climbed 0.4 percent.

Wall Street Journal:

• Apple(AAPL) Accuses Proview of Misleading. Apple Inc. elaborated on its claims to the iPad trademark in China, saying that the Chinese company on the other side of a lawsuit over the name is "misleading Chinese courts.
• El-Erian: Greece May Need Another "Messier" Restructuring - FT. Greece's debt reduction deal last week only provides a bit more time before another "messier" restructuring may be needed, Mohamed El-Erian, chief executive of the world's largest bond investor, Pacific Investment Management Co., writes in the Financial Times Tuesday.
• Faulty Wells, Not Fracking, Blamed for Water Pollution. Some energy companies, state regulators, academics and environmentalists are reaching consensus that natural-gas drilling has led to several incidents of water pollution—but not because of fracking.
• Greece Lenders Warn of Deeper Cuts Ahead. Greece's economy will remain in severe recession this year and activity will "at best" stagnate next year, forcing the country to make additional spending cuts of 5.5% of gross domestic product over the next two years to meet fiscal targets, a report by the country's lenders said.
• JPMorgan(JPM) Halts Fund Raising for Real-Estate Vehicle. J.P. Morgan Chase & Co. has ceased efforts for now to raise a new $750 million real-estate fund because of lack of investor interest in the type of high-risk, high-return deals that it was planning to do, according to people familiar with the matter.
• For Romney, South Offers Opportunity.
  

Barron's:

• Dell(DELL) Buys Firewall Firm SonicWall.

MarketWatch:

• Former CFTC Chief Sees Lack of Swaps Preparedness. Many companies that use swap contracts to hedge financial and commodity risks remain unprepared for pending regulations that will tighten practices in the market, a former member of the Commodity Futures Trading Commission said Tuesday. "I'm appalled at the lack of readiness" among so-called end users, said Michael Dunn, a commissioner from 2004 until last October. He said regulators share some blame for not yet detailing key aspects of the planned swap-market overhaul.

Business Insider:

• Striking Pictures of US Troops Serving Around The World.
• Art Cashin: The Experts I Talk To See Some Major Problems In The Latest Jobs Reports.
• Apple(AAPL) TV Production Starts In May, Goes On Sale At Year End, Says Jefferies.
• Why Everyone is Freaked Out About Portugal in One Huge Slide.
• SocGen: We're Getting Close to a Global Oil Tipping Point, And Manufacturing May Be Stalling.
  

Zero Hedge:

• A Visual Simplification of the CDS Market.
• FOMC Does Nothing, Notes Inflation Threat - Full Redline Comparison to January.
• Market Fisher Accused by CFTC of Pulling an MF Global, Depositing Customer Funds Into Non-Segregated Account.
  

New York Times:

• Is MF Global Getting a Free Pass?

Washington Post:

• US Job Openings Declined in January; Figures Suggest Hiring May Level Off. The Labor Department said Tuesday that employers posted 3.46 million job openings in January. That’s down from 3.54 million advertised in December. There were still 12.8 million unemployed people in January. That means an average of 3.7 people competed for each open job that month, the lowest ratio in three years. Still, the ratio is usually around 2 to 1 in healthy job markets.
  

American Banker:

• OCC Probing JPMorgan(JPM) Chase Credit Card Collections. JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say. The process flaws sparked a regulatory probe by the Office of the Comptroller of the Currency and forced the bank to stop suing delinquent borrowers altogether last year.

Dealbreaker:

• If Citi’s(C) Ex-Hedge Fund Chief Had To Do It All Over Again He’d Still Invest Like No One Was Watching.

FINalternatives:

• Hedge Fund Launches Return To Pre-Crisis Levels in 2011. Hedge fund launches in 2011 totaled 1,113, the highest calendar year total since 1,197 funds launched in 2007, reports Hedge Fund Research. Fund liquidations were up slightly for the year at 775 compared to 743 in 2010. Those figures include 270 launches and 190 liquidations in the fourth quarter. The total number of funds rose to 9,523 in 2011, while total hedge fund industry capital rose by 3% to $2.02 trillion. In terms of strategy, 479 of the funds launched in 2011 were equity hedge (the highest total since 2006) and 265 were macro (the highest total since HFR began keeping track in 1996). Equity hedge funds also recorded the highest number of liquidations, with 293 such vehicles shuttering operations in 2011. That’s the highest figure since 2008 when 651 equity hedge funds liquidated. The fund of hedge funds sector saw liquidations decline to pre-financial crisis levels in 2011, with 215 funds of funds closing. Geographically speaking, more funds were launched in the United States than in Europe, and liquidations were higher in Europe.

Rasmussen Reports:

• Texas GOP Primary: Romney 32%, Santorum 30%, Gingrich 19%, Paul 9%.
  

Reuters:

• U.S. Asks Saudis To Lift Oil Output From July. The United States is pressing Saudi Arabia to boost oil output to fill a likely supply gap arising from sanctions on Iran, Gulf oil officials said, adding that an increase in production is unlikely to be needed before July. Saudi Arabia is the only producer with spare capacity and oil importers will rely on Riyadh to fill the gap should Iranian output drop. Saudi Arabia has made clear it will only raise output if it sees additional demand for crude and does not want its oil policy implicated in efforts to disrupt Iran's atomic programme which the West says aims to develop a nuclear weapon. "There were talks held between Saudi and the U.S. and the U.S. asked if Saudi could be accommodating once the sanctions take effect in July. And the Saudi response was that it was ready to meet demand in the market if required, but would not like to take part in the politics," one Gulf official said.

Telegaaph:

• EU Leaders are Using the Financial Transaction Tax to Hide a Spanish-Led Revolt Against Germany.
  

Financial Post:

• Greece Credit-Default Swaps Stripped From Sovereign Risk Index. Greek credit-default swaps were stripped from a benchmark measure of European sovereign debt risk after traders ruled that contracts on the nation can be paid out. The new version of the Markit iTraxx SovX Western Europe Index linked to credit-default swaps on 14 governments was trading at about 230 basis points at 11 a.m. in London, according to BNP Paribas SA. The gauge closed at 353 basis points yesterday before Greece was removed. Greek swaps will be settled following an auction March 19 after it was ruled last week that the use of collective action clauses to force all investors to take part in the nation’s debt restructuring was a credit event. The sovereign swaps index will roll into its seventh series on March 20. A conference call will be held at 5 p.m. in London today to agree the terms, Sproehnle said, and the final membership list will be published at 8 p.m.

Shanghai Daily:

• Shanghai Home Prices Viewed as Too High in Survey. NEARLY 80 percent of respondents think housing prices in Shanghai are still too high despite government tightening measures being in place for more than one year, according to a latest industry survey. Almost 90 percent of them said they could buy a home that's equivalent to a maximum 10 times their annual household income, revealed the online survey conducted by Soufun.com, which collated responses from over 3,600 people during the week between March 6 and Monday.