- OSCE Seeks Truce for Debaltseve Exodus, Reports Cluster Bomb Use. The OSCE called for a truce to evacuate civilians from the crossroad town of Debaltseve and said two people were killed in a strike with cluster bombs last week in the rebel-held city of Luhansk. “On humanitarian grounds” the group called on “all actors in and around the Debaltseve area to establish a local temporary truce for a minimum of three days, taking immediate effect,” Ivica Dacic, the chairman of the Organization for Security and Co-Operation in Europe, said in a statement on Tuesday. Debaltseve, a strategic transport hub on a road connecting the rebel-held areas of Donetsk and Luhansk, remained under heavy fire from separatists, Ukrainian military spokesman Leonid Matyukhin said Wednesday. Nearly 2,000 civilians were evacuated from the area at the end of January, according to Ukrainian military officials.
- Greece May Run Out of Cash as Early as March. (video) As Greece’s creditors line up to oppose the country’s demand for a debt restructuring, Prime Minister Alexis Tsipras’s refusal to accept more bailout loans may result in a cash crunch as early as next month, two people familiar with the country’s financial position said. Unless the 15 billion-euro ($17 billion) limit on short-term borrowing set by Greece’s troika of official creditors is raised, the government may run out of cash on Feb. 25, said one of the people, who asked not to be named because the figures are confidential. Three weeks ago, international officials reckoned Greece could hang on until mid-year.
- Merkel Says Greek Diplomatic Offensive Is Failing. German Chancellor Angela Merkel indicated that a diplomatic offensive by newly elected Greek Prime Minister Alexis Tsipras to ease his nation’s bailout-aid requirements is failing to win over converts. “I don’t think that the positions of the member states within the euro area with regard to Greece differ, at least in terms of substance,” Merkel told reporters in Berlin on Wednesday. Later in Paris, Tsipras was told by French President Francois Hollande that “respecting the rules is necessary for all, for France too, and it’s not always easy.” While Tsipras has retreated from demands for a writedown of Greece’s debt, yielding to virtually unanimous opposition in the 19-member bloc, his pledge to increase spending threatens to collide with conditions of aid commitments totaling 240 billion euros ($275 billion).
- Greeks Spooked by Debt Clashes Put Cash Under Bathroom Tiles. Withdrawals from Greek banks may have exceeded 15 billion euros ($17.2 billion) in the run-up to the elections that catapulted Alexis Tsipras and his anti-austerity Syriza party to power, including at least 11 billion euros in January, according to four bankers citing preliminary data. Tensions between the new government, which won on a platform of debt relief, and Greece’s creditors, including Germany, may keep up the pressure. “Talks with the creditors is going to be a protracted process so you can’t rule out more pressure on deposits,” said Wolfango Piccoli, managing director at Teneo Intelligence in London. “There is plenty of uncertainty and that can make depositors nervous again.”
- North Korea Rules Out Any Talks With U.S. ‘Gangster’ State. North Korea said it won’t agree to talks with the U.S. and is now focused on its ability to destroy the country with conventional, nuclear and cyber-warfare attacks. Kim Jong Un’s regime accused the U.S. of “inching closer to the stage of igniting a war of aggression” by stepping up its sanctions, holding military drills with South Korea and predicting the future collapse of the administration, the official Korean Central News Agency said, citing a statement from the National Defense Commission.
- Rajan Says U.S. Must Accept Strong Dollar as Fed Normalizes. India’s central bank chief said the U.S. will have to accept a stronger exchange rate as the Federal Reserve turns toward raising interest rates for the first time since 2006. “The Fed will have to start at some point normalizing interest rates,” Raghuram Rajan, 52, said in an interview with Bloomberg TV India at the Reserve Bank of India headquarters in Mumbai. “Unless the Fed starts doing it, others aren’t going to follow suit. And the Fed, when it does that, will have to accept some appreciation of the dollar simply because it’s the first one out of the box.” He also warned Indian firms against borrowing in dollars, likening it to “Russian roulette.”
- European Stocks Rise Third Day as Drugmakers, Greek Shares Gain. European stocks climbed for a third day, as an increase in health-care shares and Greek companies outweighed a drop in energy producers. The Stoxx Europe 600 Index rose 0.5 percent to 372.1 at the close of trading, reversing losses of as much as 0.3 percent.
- Oil’s Surge to Bull Market Viewed as Temporary Bounce. Oil is back! Or maybe not. After suffering its longest rout in history, crude rebounded Tuesday, entering a bull market after soaring 24 percent from a six-year low reached in January. Behind the gain was speculation that curbs in investment will cut production. For all the optimism among traders, firms from Barclays Plc to Societe Generale SA and UBS Group AG say the rally is just temporary because less spending won’t eliminate a glut overnight. Instead of heading back to $100 a barrel, oil could fall as low as $30 because supply surpluses won’t disappear overnight, said Miswin Mahesh, a commodities analyst at Barclays. “We don’t think we’ve seen the bottom yet,” Giovanni Staunovo, a commodities analyst at UBS in Zurich, said by e-mail on Tuesday. “We expect U.S. commercial crude oil stocks to hit a new 84-year high on Wednesday, while U.S. oil production is likely to stay strong in the near term.”
- No Bust Seen as Dakota Oil Firms Keep Staff Amid Price Drop. A plunge in global energy prices that has put some North Dakota oil rigs in a deep freeze has yet to chill the state’s hiring climate. By almost any metric -- the jobless rate, payrolls, claims for unemployment benefits -- there is scant evidence to indicate the state at the epicenter of the U.S. shale-oil boom is about to stumble.
- Fed’s Mester Says Rates Should Rise ‘Soon’ Amid Labor Gains. Federal Reserve Bank of Cleveland President Loretta Mester said interest rates should be raised “soon” amid mounting economic momentum, “significant improvement” in labor markets, and the boost consumers will get from cheaper fuel. The improvement in the world’s largest economy is likely to be sustained as headwinds that held back the expansion abate, she said today in a speech in Columbus, Ohio. Mester said she would be “comfortable with liftoff in the first half of this year” and she sees inflation gradually rising back to the Fed’s 2 percent target.
- Ralph Lauren(RL) Falls After Currency Woes Weigh on Its Forecast. Ralph Lauren Corp., the upscale apparel company known for Polo and other brands, fell the most in more than 16 years after third-quarter earnings trailed analysts’ estimates and the company cut its sales forecast. Net income dropped 9.3 percent to $215 million, or $2.41 a share, from about $237 million, or $2.57, a year earlier, the New York-based company said Wednesday in a statement. The average of analysts’ estimates compiled by Bloomberg was $2.50. The company said revenue may gain about 4 percent this year, down from a previous projection of as much as 7 percent.
ZeroHedge:
- There Are No "Tailwinds". (graph)
- Services PMI Worst New Order Growth Since Financial Crisis, ISM Weakest Employment Since Feb 2014. (graph)
Washington Post:
- Defense nominee Carter ‘inclined’ to provide U.S. arms to Ukraine. Ashton B. Carter, President Obama’s choice to become his fourth secretary of defense, said Wednesday that he was “very much inclined” to provide arms to Ukraine to fend off Russian-backed rebels, something the White House so far as resisted. “We need to support the Ukrainians in defending themselves,” Carter said at his Senate confirmation hearing.
- Greece seeks ECB funds, Germany rejects austerity roll-back. Greece's new leftist government appealed to the European Central Bank on Wednesday to keep its banks afloat as it seeks to negotiate debt relief with its euro zone partners, but Germany rejected any roll-back of agreed austerity policies. Finance Minister Yanis Varoufakis said after meeting ECB President Mario Draghi in Frankfurt he believed Athens could count on central bank support during the short period it would take to conclude talks with international lenders.
- European Commission Worried About Possible Greek Bank Run. European Commission is concerned that bank clients in Greece may start withdrawing funds in large volumes in coming days, citing people close to the commission.
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