Today's Headlines

Bloomberg: 

• European Recovery Path in Danger as Politics Menace Growth. The euro region’s path to recovery is facing a new challenge from Italy’s political stalemate. The election highlights the risk that Europe’s recovery turns into a slog lasting years, especially if voters continue to stream toward anti-austerity populists such as Italy’s Beppe Grillo, said economists from ABN Amro Bank NV to Daiwa Capital Markets. With European Central Bank interest rates already at record lows, officials may have little choice other than to let Europe grind its way out of the slump.
• Hollande Is Most Unpopular French Leader Since 1981 on Economy. President Francois Hollande’s popularity slipped this month as France’s economic slump rendered more people jobless, leaving him the most unpopular leader since 1981, a poll showed. After nine months in office, Hollande’s approval rating fell five points to 30 percent, the poll for Figaro Magazine weekly by TNS-Sofres showed today. His predecessor Nicolas Sarkozy had a 37 percent rating at the same point in his presidency in March 2008. The small bump in popularity Hollande got from France’s military intervention in Mali has evaporated, the pollster said. “Already at the start of Hollande’s presidency, there was little confidence in him, especially from opposition parties’ supporters,” Carine Marce a political analyst at TNS, said in an interview. “The positive effect of the war in Mali has vanished and news of low growth, high deficits and unemployment are accelerating the fall.” 
• Euro Declines as Cooling Inflation Gives ECB Scope for Easing. The euro fell versus the dollar, extending its first monthly drop since July, amid Italian political wrangling about forming a government and as cooling regional inflation opens the door for central bank stimulus. The 17-nation currency weakened against most of its major peers as European Central Bank President Mario Draghi signaled at an event in Munich late yesterday that the bank has no intention of tightening monetary policy anytime soon. The U.S. economy barely expanded in the fourth quarter, erasing a previously estimated contraction.
• Obama-Congress Paychecks Safe From Automatic Budget Cuts. While hundreds of thousands of U.S. government employees may be furloughed due to federal spending cuts, President Barack Obama and members of Congress won’t need to worry about their paychecks.
• Climbing Student-Loan Delinquencies Hurt Young Homebuyers. More people borrowing for education are failing to pay off their loans. Almost a third of student-loan borrowers in repayment were delinquent at the end of last year, up from about a quarter in 2008 and 20 percent in 2004, according to a report on household debt and credit by the Federal Reserve Bank of New York. The amount of educational debt, which includes federally backed and private loans taken out by students and parents, has almost tripled in the past eight years to $966 billion, the bank said. With costs to attend college continuing to outpace the inflation rate, more borrowers are struggling to pay. That makes it harder for people — especially those between 25 and 30 — to secure other types of credit, including home mortgages. About 44 percent of student loan borrowers aren’t repaying their loans, because of deferments, forbearances or they are still in school.

Wall Street Journal:

• Euro-Zone Slump Set to Continue. The euro-zone economy seems unlikely to emerge this quarter from a contraction that has already lasted for nine months, despite a low rate of unemployment in Germany, its largest member. The Centre for Economic Policy Research and the Bank of Italy Thursday said their Eurocoin indicator—which is intended to estimate quarter-on-quarter growth in gross domestic product—showed the euro-zone economy shrank again in February, although at a slower pace than in recent months.

MarketWatch:

• Danger as stock-market ‘Greedometer’ flashes red. (graph)

CNBC:

• Distressed Homes Still Drive Sales. The housing market appears to be surging ahead suddenly on all cylinders, but that does not mean it is free of the remnants of its recent downfall. The number of distressed home sales, either bank-owned or short sales, may be shrinking, but it is still making up a significant share of the overall housing market. Foreclosure-related sales made up 21 percent of all U.S. sales in 2012 and short sales, when the home is sold for less than the value of the mortgage, made up 22 percent, according to a new report from RealtyTrac. Add it up and 43 percent of all 2012 sales were of distressed properties.

Zero Hedge:

• Negative Q4 GDP Revised To Barely Positive, Misses Expectations. (graph)
• Extended Claims Jump 8.5% As Initial Claims Continue Sideways Crawl. (graphs)
• Chicago PMI Offsets Chinese Weakness, Prints At 11 Month High. (graph)
• Why Central States/Banks Inflate Asset Bubbles, And Why They Implode.
• "The Great American Housing Rebound". 
• Japan Food Prices Set To Soar As Government Hikes Wholesale Wheat Prices By 10%.

Business Insider:

• India's New Budget Plans Won't Bring The Economic Growth The Country Desperately Needs. 
• A Day In The Life Of Star Bloomberg TV Anchor Stephanie Ruhle. 
• The Biggest Lie They Keep Telling Themselves In Europe. 
• KANSAS CITY FED MANUFACTURING PLUNGES, CONTRACTION ACCELERATES. 
• Democracy Has Become The Biggest Threat In The Eurozone. 
• Panic In Greek Pharmacies As Hundreds Of Medicines Run Short. 
• The Nasdaq Sentiment Index Is Sending A Dotcom Bubble Sell-Signal. (graph) 
• Gas Prices Have Set Two Ugly Records In February.

Reuters:

• METALS-Copper slips on weak China demand, mixed U.S. data.
• Higher cancer risk after Fukushima nuclear disaster-WHO. 
• Kohl's(KSS) gives soft sales, profit forecast for 2013. Kohl's Corp reported a lower fourth-quarter profit on Thursday, hurt by markdowns during the holiday season, and forecast full-year earnings that fell short of Wall Street expectations.

Telegraph:

• EU 'Troika' rule in Ireland worse than British Empire. Ireland's trade union chief has accused the EU-IMF troika in charge of Irish austerity policies of tipping the economy into downward spiral and acting as an imperial oppressor. 
• Spain's economy shrinks 1.4pc in 2012 as Bankia posts biggest ever loss. Spain's ongoing recession was confirmed on Thursday after official figures showed that the economy shrank by 1.4pc in 2012. The eurozone's fourth largest economy contracted for the seventh straight quarter in the final three months of 2012, shrinking by 0.8pc as the recession worsened by more than previously estimated. Output shrank by 4.7pc, due to a fall in domestic demand, while exports grew by 2.8pc over the quarter, Spain's National Statistics Institute said on Thursday. Economists had expected output to decline by 0.7pc in the three months to the end of December. 
• Just one in 14 believe economy will pick up. Just one in 14 Britons believes the country’s economy will be in better shape in six months’ time, making them more pessimistic than Spain and Italy. 

Handelsblatt:

• Germany is liable for EU134b of bailout money, citing Finance Ministry calculations it obtained. Liability risk for credits paid out to Greece, Ireland, Portugal and Spain amounts to EU112b.

Ansa:

• Italy's Democratic Party Rejects Broad Coalition, Official Says. Nicola Stumpo, the PD's chief of staff said the Democratic Party "is against any form of broad coalition". PD leader Bersani still candidate to lead the government, Stumpo said.

Economic Times:

• Italy Faces Worst Six Months in 50 Years: Giorgio Squinzi. The head of Italy's main business federation warned in an interview today that the next six months will be the worst for the country in 50 years as the economic crisis reaches its peak. "The next six months will be terrible, the worst in 50 years," Giorgio Squinzi, the head of the Confindustria lobby, told La Repubblica daily. "The situation is very serious," Squinzi said. "GDP ( gross domestic product) has shrunk 8.1 percent since 2007 and 3.2 million people have been out of work," he said. "Politicians have to create the conditions for growth. This is a last chance," he warned. Asked about the political situation, Squinzi suggested a grand coalition government to deal with urgent issues. "The real economy cannot wait for political machinations," he said. Squinzi called for "shock therapy" for Italy, with tax cuts and immediate payment of debts that the state has accrued with the private sector. He also dismissed the idealistic economic proposals made by the anti-establishment Five Star Movement led by former comedian Beppe Grillo, which had a shock electoral success. "If we applied Grillo's programme, Italian industry would be finished. We would become a rural and bucolic country," he said.