Wednesday, February 18, 2015

Today's Headlines

  • Ukraine Truce in Peril as Government Troops Abandon Rail Hub. The cease-fire in Ukraine was on the brink of collapse on Wednesday as the battle for a transport hub came to a head, with the government withdrawing its forces after weeks of fighting to hold on to the strategic location. The clash for Debaltseve, a key town on the road that connects Donetsk and Luhansk, is a “massive violation” of the truce reached last week, said German Chancellor Angela Merkel’s chief spokesman, Steffen Seibert. The European Union urged implementing the truce agreement within hours
  • Lew Urges Greece to Reach Debt Deal to Avert Immediate Hardship. U.S. Treasury Secretary Jacob J. Lew urged Greece to reach a deal with international creditors, warning that failure to do so would bring immediate hardship to Europe’s most indebted-state. Lew encouraged Greece to find a constructive path forward in partnership with Europe, the Treasury Department said in a statement after a call Wednesday between Lew and Greek Finance Minister Yanis Varoufakis. Greece will submit a request for a six-month loan extension to the euro area Thursday, a day later than originally planned, according to a government official. 
  • European Stocks Advance Amid Speculation of Greek Loan Agreement. European stocks rose to a seven-year high amid investor speculation that Greece will reach a compromise agreement on its bailout terms with euro-area creditors. The Stoxx Europe 600 Index added 0.9 percent to 380.37 at the close of trading. Of 18 western-European markets, 16 gained, with the U.K.’s FTSE 100 Index little changed. The Stoxx 600 traded at its highest level since November 2007.
  • SEC Sees Pervasive Bad Behavior in Complex Debt: Credit Markets. After stunning mortgage-bond traders by seeking to put one in jail, U.S. investigators see more inappropriate behavior that needs to be addressed in the market for such complicated debt. Investigators are finding signs that dealers are still lying to clients and striking improper deals such as parking debt, according to Michael Osnato, head of the complex financial instruments group in the Securities and Exchange Commission’s enforcement division. Traders or investors park bonds by selling them to accomplices with an understanding that they’ll repurchase the securities at a later date, in an attempt to skirt capital or internal rules. The opacity of the market “just creates an atmosphere where people feel they can get away with things -- and they largely have for a long time,” Osnato said in a telephone interview. “It’s more pervasive than we would like,” he said. “Lying to your customer, parking bonds for improper reasons, crossing bonds for improper reasons that aren’t in the clients’ best interest -- those are all things that we see.” 
  • Einhorn Is the Latest Investor to Say Stocks Are Getting Expensive. Hedge-fund manager David Einhorn said he’s scaled back wagers on stock gains after markets climbed and as a stronger dollar threatens to limit earnings of U.S. companies from operations overseas. Bets on rising assets exceeded short wagers by 38.9 percentage points as of Dec. 31, Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where Einhorn is chairman, said in a filing Tuesday. That compares with net-long exposure of 40 percent on Sept. 30 and 53.9 percent at the end of 2013
  • Wall Street’s Buying Less of Those Risky Junk Bonds It’s Selling. Credit trading just isn’t paying like in the old days. That’s why Wall Street dealers are putting less money at risk to broker the debt, and instead are matching buyers and sellers as much as they can before making trades. Dealers are only acting as middlemen for about 60 percent of high-yield bond transactions bigger than $2 million, moving securities between two sides they already have lined up, according to data compiled by financial-research company Tabb Group LLC. Before the 2008 financial crisis, such trades accounted for an estimated 25 percent of their business.
Wall Street Journal:
  • Greek Bailout Meeting Hinges on ‘Credibly Worded Request’. Bailout request to be submitted Thursday. Eurozone finance ministers have tentatively scheduled a meeting on Friday to discuss a request from Greece to extend its bailout, but they will only meet if the request eases their concerns about policies of the new left-wing government, European officials said. A Greek government spokesman said Wednesday it will submit the extension request on Thursday morning...
  • Russia sanctions 'do not have a deterrent effect'. A few days after Europe's leaders announced a ceasefire in Ukraine, the European Union issued a new list of sanctions this week against separatists in the region as well as Russian military leaders and politicians. But experts who spoke with CNBC cast doubt on how hard the new measures will hit Russia's economy
  • Crude falls $1.39 to settle at $52.14 a barrel. (video) U.S. crude settled at $52.14 per barrel on Wednesday, falling $1.39 per barrel, or 2.6 percent. Crude oil futures were unable to build on more than 1 percent gains in the previous session as rising inventories continue to curb rallies.
Business Insider: 

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