Today's Headlines

Bloomberg:

• Berlusconi Closes Bersani Gap to Error Margin, Poll Shows. Former Italian Prime Minister Silvio Berlusconi narrowed the lead of front-runner Pier Luigi Bersani to within the margin of error of an opinion poll for the first time before Feb. 24-25 elections. The gap between the two narrowed 0.3 percentage points from yesterday to 3.7 points, according to a daily tracking poll by Tecne institute for SkyTG24. The survey has a margin error of 4 percentage points. Tecne had Bersani leading by 14 percentage points on Jan. 2.

• Euro Falls Toward One-Week Low Versus Dollar Before ECB. The euro fell toward a one-week low versus the dollar as European Central Bank policy makers prepared to meet tomorrow amid political and banking turmoil that threatens to renew the region’s sovereign-debt crisis.

• European Stocks Drop on Concern Over Italian Austerity. UniCredit SpA and Intesa Sanpaolo SpA led a drop in Italian shares. Vinci SA, Europe’s biggest builder, slid 3.3 percent after posting a decline in 2012 profitability. ArcelorMittal climbed 1.1 percent. Volvo AB jumped 4.2 percent even after fourth-quarter profit fell as the company predicted its North American and European markets will improve this year.

• Boehner Opposes Delay in Spending Cuts Without ‘Reforms’. House Speaker John Boehner said he will oppose any delay of $1.2 trillion in automatic U.S. spending reductions set to begin March 1 unless Congress replaces them with other “cuts and reforms.” Boehner said it’s time for Senate Democrats and President Barack Obama to come up with a plan to replace the spending cuts. He said he is “more than willing” to work with them as he reiterated his opposition to tax-revenue increases in such a proposal. “At some point, Washington has to deal with its spending problem,” Boehner, an Ohio Republican, told reporters at a Washington news conference today. “I’ve watched them kick this can down the road for 22 years that I’ve been here. I’ve had enough of it. It’s time to act.”

• Gun-Plagued Chicago: Won’t You Come Home, President Obama? As gun violence plagues Chicago, an editorial and a news story in President Barack Obama’s hometown newspapers this week have called on him to come home to help address the city’s shootings and murder problem. An editorial in today’s Chicago Sun-Times suggests Obama hasn’t paid enough attention to the violence in his home city. “Two days after the mass murder at a school in Newton, Conn., President Barack Obama flew there to console the families and call for stricter gun control,” the editorial says. “How many more children must die in Chicago before the president does the same here?” In yesterday’s Chicago Tribune, a news story reported on a growing chorus in the community for the president to come to Chicago to speak about the violence in his city. “What began as gentle pleas for a little attention from the White House has turned into demands that the president hop on Air Force One,” the story said. “In African-American communities where gun violence is rampant, people want something extra from the first black president. They want him to say publicly to young men, as one black man to another: Put down your guns.”

• Buffett’s Moody’s Stake May Have Fallen on S&P Lawsuit. Warren Buffett’s Berkshire Hathaway Inc., owner of the largest stake in Moody’s Corp., may have lost almost $300 million on the holding this week as shares of the credit-ratings company plunged. Moody’s, the second-biggest provider of credit ratings, dropped 19 percent through yesterday after larger rival Standard & Poor’s said on Feb. 4 that it could face a U.S. lawsuit over inflated mortgage-bond ratings. Omaha, Nebraska-based Berkshire held 28.4 million Moody’s shares, or about 13 percent of the firm, as of Sept. 30, according to data compiled by Bloomberg.

• Geithner to Join Council on Foreign Relations, Publish Book. Timothy F. Geithner, who ended his term as U.S. Treasury Secretary in January, will join the Council on Foreign Relations this month and plans to publish a book. Geithner, 51, will work for the council as a full-time distinguished fellow in New York, where the organization is based, the group said today in two separate emails. He was previously a senior fellow there in 2001.

MarketWatch.com:

• Insiders now aggressively bearish. Commentary: Insider selling pace now fastest in several years.

CNBC: 

• Delivery Cuts Only 'One Step' To Fix Finances: Postmaster General. Ending the Saturday delivery of mail is "just one step in a plan to resolve our finances," Postmaster General Patrick Donahoe said in an interview on CNBC. "Going forward we still need legislation to address a number of things." Donahoe said that this move is necessary due to dropping use of first class mail service. The U.S. Postal Service announced Wednesday that it will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion annually.

• Recent Libor Settlements Are Just Tip of the Iceberg. The web of Libor conspirators is growing. Deutsche Bank has suspended five more traders in conjunction with a widespread investigation into interest-rate rigging that took place during the financial crisis and beyond, according to a person familiar with the matter. The five suspensions come in addition to two traders claimed by previous iterations of the review, the person said.

Zero Hedge: 

• Japanese Stocks: Highest Since 2008 Or Lowest Since 1984. (graph)

• Italian Bond Yields Spike To 6 Week Highs On Surge In Monte Paschi Loss Expectations.

• The United States of Debt Addiction. 

• The Great Lie Of The Great Rotation. 

• Is This Why Gold (And Europe) Is Underperforming US Stocks (For Now)?

Business Insider: 

• What It Looks Like When A High Frequency Trading Algo Bombs A Stock With Fake Quotes. 

• China's Growing Legion Of Single Males Will Make You Feel Sad And Worried. 

• A New Government Ban Is Going To Hit China's Growing Luxury Retailers Hard. 

• Some Trader Has Made A Very Big Bet That Something Very Bad Will Happen Within The Next 60 Days. 

• KRAUTHAMMER: House GOP Should Force Obama's Hand On The Sequester. 

• French Government Fears 'Social Implosions Or Explosions'.

Reuters:

• Monte Paschi loss could be up to a billion euros. Board members at Monte dei Paschi are expected to say on Wednesday that Italy's third largest bank may have lost up to 1 billion euros on opaque derivatives trades, far higher than the initial estimate. The trades are at the center of a probe into former management of the bank which has deepened questions about the role of banking supervisors and the influence of local politicians ahead of Feb 24-25 parliamentary elections. A source close to the situation said the final loss, set to be announced after the market close on Wednesday, should be somewhere between the preliminary estimate of around 720 million euros ($974 million) and 1 billion euros.

• Fitch: Lackluster outlook for U.S. casino operators. The 2% payroll tax cut expiration provides another headwind for an already lackluster outlook for U.S. casino operators, according to Fitch Ratings. Operators also face cannibalization from new openings in select markets against a difficult macroeconomic backdrop.  

• US-based stock mutual funds gain for 4th week -ICI.

• 
  Italy's Bersani faces choice between Monti and leftist ally. The leader of Italy's centre-left Democratic Party is facing pressure to ditch his leftist allies and seek a pact with outgoing premier Mario Monti as a resurgent Silvio Berlusconi threatens to spoil an election victory that once seemed assured.
  

Financial Times:

• Miller maintains an appetite for Apple(AAPL). Investors have Apple all wrong, according to Bill Miller. The best performing mutual fund manager last year thanks to big bets on unloved stocks, he says the world’s largest listed company could be worth 50 per cent more.