Today's Headlines

Bloomberg:   

• Schaeuble Says ‘Over’ for Greece Unless Aid Program Accepted. German Finance Minister Wolfgang Schaeuble doused expectations of a positive outcome for Greece at an emergency meeting with its official creditors tomorrow, saying there are no plans to give the country more time. Speaking to reporters in Istanbul after a two-day meeting of finance chiefs from the Group of 20, Schaeuble said “it’s over” if Greece doesn’t want the final tranche of the current aid program. Greece’s creditors also “can’t negotiate about something new,” Schaeuble said. Greek government bonds had risen today for the first time in five days on optimism there might be room to move toward an agreement that will help ensure the nation isn’t left short of funds. That had come after Greece had offered compromises in a bid to push for a bridge plan to stave off a funding crunch and to buy time for negotiations to ease austerity demands.
• Bond Vigilantes Gone AWOL Boost Greek Risk of Expulsion. The threat Greece poses to Europe may be gaining force through investor complacency. Money managers are accepting rates on Italian and Spanish government bonds at close to record lows. They’re rejecting the notion that the euro area’s higher-yielding issuers -- the so-called peripherals -- can be infected by Greece’s negotiations for a new deal on its more than 300 billion euros ($340 billion) in debt. The cues investors are giving to European policy makers may end up backfiring. “Someone says something that sounds cheerful, and the market assumes that the situation is therefore moving toward resolution,” Stephen Lewis, chief economist in London at ADM Investor Services International Ltd., said in a Feb. 6 telephone interview. “That may not be the case at all. Abandoning austerity in the case of Greece would be abandoning austerity for the euro zone as a whole.”
• Osborne Sees Rising Danger of Bad Outcome in Greek Crisis. (video) International finance ministers urged Greece and its creditors to resolve their fight over austerity and aid, warning against an impasse that might splinter the euro region. As a meeting of economic policy makers from the Group of 20 concluded in Istanbul, U.S. Treasury Secretary Jacob J. Lew cautioned against “casual talk” that Greece could leave the euro and recommended “a pragmatic approach in which the parties can agree on terms that are mutually agreeable.” “Here at the G-20, we are urging all parties to this dispute to find some common solutions,” U.K. Chancellor of the Exchequer George Osborne said in a Bloomberg Television interview. “A Greek exit from the euro would be very difficult for the world economy and potentially very damaging for the European economy.”  
• Ukraine Begins Offensive Against Rebels While U.S. Weighs Arms Aid. Ukrainian troops began a new offensive and their main eastern headquarters suffered a rocket attack before European diplomats gathered in Belarus for a peace summit in a bid to stem 10 months of bloodshed. Government forces broke through rebel positions near the eastern port city of Mariupol, with Ukraine blaming the pro-Russia militants for shelling its command post. The new fighting erupted after President Barack Obama and German Chancellor Angela Merkel said Russian aggression is boosting the resolve of the U.S. and the European Union to make President Vladimir Putin pay for violating Ukraine’s sovereignty.
• Sleep-at-Night Bank-Debt Buyers Seen Cool on TLAC Bonds. Douglas Flint, chairman of HSBC Holdings Plc, wants to know who’s going to buy the trillions of dollars of loss-absorbing securities that regulators plan to force the biggest global banks to have on their books. The interest at this stage from traditional consumers of bank paper, such as pension funds and insurers, is lukewarm at best. While the securities, designed to be written down in a crisis, would offer higher yields than senior debt, the risk of bail-in may be more than some buyers can tolerate. That could leave the banks struggling to meet regulatory requirements. 
• European Shares Advance Amid Optimism of Greek Bailout Agreement. European stocks advanced amid investor optimism that Greece can reach an agreement on bailout terms with its euro-area creditors. The Stoxx Europe 600 Index added 0.6 percent to 372.94 at the close of trading, after earlier rising as much as 0.9 percent. Greek Finance Minister Yanis Varoufakis faces his euro-zone counterparts on Feb. 11 at an emergency meeting in Brussels. He said his government will neither tear up the existing bailout deal, nor allow the budget to be derailed, while Greece will implement about 70 percent of reforms included in the accord.
• Fewer Small Businesses in U.S. Plan to Raise Worker Compensation. Fewer U.S. small companies plan to raise wages in coming months after a net 25 percent said they recently boosted compensation for their workers. A net 12 percent of managers said in January that they will be increasing pay, according to the seasonally adjusted results of 1,663 responses in a survey by the National Federation of Independent Business. That’s down 5 points from December, when 17 percent said they planned higher salaries and 25 percent said they had recently increased compensation. The group’s index of small-business optimism declined to 97.9 in January from 100.4 a month earlier.

ZeroHedge:

• The REAL Greek Negotiations: Situation Is “Berserk", "There Is No Plan", "Greeks Digging Own Graves".
• Europe's Greek Showdown: The Sum Of All Statist Errors. (graph)
• Halliburton To Cut Up To 6,500 Jobs As Crude Carnages To Crucial $50 Level.
• What Do Stocks Know? (graph)
• The Reason Why Trading Currencies Is Now The Most Difficult Since Lehman.
• Why Bank Of America(BAC) Is Stumped: Despite "Lower Gas Prices" US Consumer Spending Has Plunged.
• As Seen On The Ground In Eastern Ukraine. (pics)
• The Coup Is Complete: US Embassy In Yemen Shutting Down, Ambassador To Leave By Wednesday.
• How Dan Loeb Thinks The Greek Crisis Plays Out.
• Wholesale Inventory Growth Slowest Since May 2013, Sales Tumble - Worst Ratio Since Lehman. (graph)
• Small Business Optimism Tumbles, Misses By Most In Over 2 Years. (graph)
• Invasion Imminent: Jordan Stations "Thousands" Of Troops On Iraq Border.

Fiscal Times:

• Fed's Williams Says Rate Hike Getting 'Closer and Closer'. Economic conditions are "getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization," Williams told the FT in an interview. In the interview, Williams made clear he felt the inflation-dampening impact of falling oil prices and a strong dollar would fade over time. "Those influences will wane and this basic fore of a strong labor market, strong economy, will ... become the dominant theme, and to my mind push wages up to 3-3.5% and push inflation back to 2%," he said.
  
  conomic conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization,” Williams told the FT in an interview.
  The newspaper said Williams said the Fed might have to hike borrowing costs "much more dramatically" than otherwise if it waited too long, saying it was better to move sooner and raise rates "gradually, thoughtfully." - See more at: http://www.thefiscaltimes.com/latestnews/2015/02/10/Feds-Williams-says-rate-hike-getting-closer-and-closer-FT#sthash.8HLK2bPs.dpuf
  Economic conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization,” Williams told the FT in an interview.
  The newspaper said Williams said the Fed might have to hike borrowing costs "much more dramatically" than otherwise if it waited too long, saying it was better to move sooner and raise rates "gradually, thoughtfully." - See more at: http://www.thefiscaltimes.com/latestnews/2015/02/10/Feds-Williams-says-rate-hike-getting-closer-and-closer-FT#sthash.8HLK2bPs.dpuf

Telegraph:

• Greece's last minute offer to Brussels changes absolutely nothing. Greece has escalated its demands while seeming to offer concessions, but at least it is smiling again. 
• Greek finance minister: be prepared for a clash. Yanis Varoufakis says policymakers should prepare to "contemplate breakdown" of the eurozone if better deal for Greece can't be reached, as German finance minister says "it's over" unless country backs down.

Focus:

• Every Second German Wants Greece to Leave Euro-Area. 48% of Germans want Greece to leave euro, citing INSA poll. 29% want Greece to stay in euro-area. 23% have not decided.